Four top tips for starting a business following redundancy
If you’ve found yourself in the position of having been made redundant recently, could starting your own business be the answer to where your career goes next?
It may come as a surprise to anyone unfamiliar with startups to hear that up to 30% of new businesses have been founded in response to being made redundant, or long-term unemployment, according to the AXA research on Startups.co.uk, between 2011 – 2016.
Of those, 80% had turned their hobby into their business.
So, while being made redundant can naturally feel like an overwhelming experience, having to navigate it mentally and physically equips you with survival skills to deal with the ups and downs that entrepreneurialism will bring.
Give yourself a moment to deal with that emotional shock and follow these steps to start your own business.
Use your time and money wisely
Redundancy is typically accompanied by a notice or leave period and it is never too early to start researching your business idea, as long you feel mentally prepared to do it.
You may even find that jumping straight into your new venture prevents you from slipping into a negative state of mind caused by your situation.
Developing your business and marketing plan is no speedy task and is imperative to starting your business successfully, as we discuss over in this article. Your research may highlight areas you may need additional training in or resources which you can complete in the comfort of redundancy pay.
If you’ve received an enhanced severance package, depending on the amount, you may also find yourself able to pay for things like qualifications, equipment or marketing, alongside your household bills.
By investing your settlement into your business instead of extravagant items, you start off in a really positive position, instead of spending before profit comes in.
Explore alternative sources of funding
Whether you received a lump sum at the end of your employment, or you’re starting from scratch, it is worth checking if there are any relevant funding sources available to support your new business.
With so many funding programmes out there, it can prove highly beneficial to speak to an expert to discuss what option and when is most suitable for your business, rather than try to fathom it on your own.
Some funding streams depend on the type of business you have started – freelance, sole trader or a limited company – and this is something you should consider when you start out.
This doesn’t mean paying a consultant for advice, as your local authority’s business arm, such as our own Business Durham, will be able to guide you in the right direction. Alternatively, you could apply to our incubator programme where we not only deliver a workshop on this subject, but you also have easy access to contacts you may not have gained on your own.
Build a professional network
Getting yourself out there and meeting people from both the same industry and also like-minded entrepreneurs will likely prove positive for your mental health.
We talk more about sustaining positive mental health here, but ultimately by having access to people in the same boat, or that have gone through something similar, will allow you to both offload and absorb information and experiences that are sure to be more successful than trying to work it out on your own.
If you’re daunted by the thought of starting this journey, joining an established incubator like our own hands you this on a plate, by working in a group of entrepreneurs at a similar stage, access to mentors and a direct “in” to relevant networks.
Find your balance
It isn’t easy, starting your own company. In your previous employment, you may have been responsible for a certain aspect of the business, a team even. But now as a business owner, you suddenly find yourself responsible for everything, and this can take its toll on your time and energy.
It can be tempting to work every hour of the day and night to get things done, but this will ultimately leave you burned out, unmotivated and under-performing.
By allowing yourself a positive balance between your work and personal life – which includes putting down your phone – you will retain your positive, motivated mindset. Meeting with family, having a lie in or enjoying your favourite hobby are all easy examples of how you can incorporate this into your life.
Should you find yourself suffering burnout, you can find our tips on overcoming it over on this blog. These tips will help you if you’re first starting out, following unemployment. But if you’d like a more indepth support structure, apply to our next incubator programme; you can find out what we offer here, or you can contact us to discuss how you might fit in.