How to start your own small business after being laid off
In today's ever tightening economy, many people are facing difficult job prospects. Faced with continuing unemployment, many laid off workers, have begun to consider starting their own business. This has provided another opportunity, since being unemployed in a tight job market, offers very few opportunities even for talented individuals. While this may seem like the perfect solution, there are many factors that an individual should consider before moving forward.
It is important to clearly realize that the road to entrepreneurship is rocky at best even during good times. The path to small business ownership should be cautiously viewed, with honesty and introspection. In order to make the best decision possible here are some tips that you should know about how to start your own small business after being laid off-
- Take some time to make a plan: Keep in mind that the day you receive your pink slip, is often not the day to start a new business. One of the biggest reasons being that the emotional toil, of being new to the unemployment scene, is not a time for big decision-making. You need to take a few weeks to adjust to your new circumstance, and clear the emotion, for some logical decisions of your life path. This is the time to focus on making the decision that will carefully carry you into the next phase of your life. Taking time to make plan is not a waste of time, but a careful use of your resources.
- Honestly assess your skills and experience-One of the first steps you should take is to carefully review your skills, experience, and passions, to see if your business idea fits with your current situation. It is crucial to realize that if your small business idea is in a new area where you have little background, the learning curve and expenses will be greater. Remember that a job in your business industry will shorten the learning cycle and preserve start-up cash.
- Carefully evaluate your market-One of the most important considerations to make is that when transferring experience and skills, to become an independent owner, requires an honest look at the health of your industry. Prospective small business owners need to realize that large corporations often rely on outsourcing work functions, that aren't a core part of the business. You can contact associations for your business, to gauge the level of outsourcing activity. In addition, don't forget to look at the over growth of the industry.
- Check your bank account-Another important step that should be done early on in the process, is to set up a business and personal budget, to see if you can cope with a six to twelve month loss of income. It is far better to begin your operation with funds, from a severance and savings, and then you can talk to family and friends, for seed capital. Keep in mind that a last resort is borrowing cash, because of the increased risk. Remember that many businesses can be started with limited money, especially service or consulting companies.
- Develop a business timeline: If you decided to proceed you need to set a realistic timeline, to start the company. For people who tend to be planners, start before you have all the information and don't get caught up in paralysis analysis. For the take action types, don't run and start, but spend more time in the planning phase.
- Remember being laid off can often be a blessing in disguise. As a test to determine if you are ready, consider this-if these tips overwhelm you, then the timing isn't right. If you feel strongly motivated, you can take this as an opportunity, to set your own independence and do what you always wanted to do.