Recently, it seems that every week brings another report of companies laying off a percentage of their workforce. If you’ve been impacted by the recent string of layoffs, you know that being laid off hurts, regardless of whether or not you loved your job. Between the financial implications, and leaving unfinished projects and close colleagues behind, closing that door is hard. But as they say, it’s possible that, when one door closes, another door opens.
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Look for Opportunity
This new “door” can open to numerous possibilities. For some, it’s a new job. However, if your industry is suffering more than others, you might want to explore other options.
Another possibility? Try leveraging your existing skill set to start a side hustle. If the demand for your skills is there, your side hustle might end up thriving beyond your expectations. It’s not easy to make the leap from a steady job to being your own boss. But if you’re looking for some sort of silver lining, perhaps a layoff can be unexpected motivation.
Transition from Unemployed to Entrepreneur
Maybe you already have a business idea. You might also have no idea where to begin. No matter where you are in the process, we’ve got a few ways you can explore the transition from losing your job to becoming an entrepreneur.
Check Your Unemployment Benefits
As excited as you might be to start a business, avoid tapping into your savings right away. It’s important to take advantage of unemployment payment checks and any potential healthcare benefits for as long as you can. For example:
File a claim for unemployment benefits — you may qualify for up to 26 weeks of compensation.
Explore healthcare options — you can look at government plans, or search for other private options more similar to what your former employer offered.
Consider extended benefits when you near the end of your 26 week unemployment compensation. In some states, you can add anywhere from 13-20 weeks of additional compensation if your circumstances qualify. While this isn’t an option for everyone, it doesn’t hurt to check and see if you could benefit.
Take full advantage of any severance benefits or payments you might’ve received from your previous employer as a result of the layoff.
Research the Earned Income Tax Credit (EITC) to determine if you qualify for tax credits.
It can be overwhelming to keep track of everything, so we’ve outlined more steps you can take to help alleviate the stress and confusion around being laid off.
Evaluate Your Existing Skills and Resources
After getting laid off, answering questions might feel daunting when you’re not even sure what’s next. But with the right questions, you might end up uncovering that next step. Consider these questions and answer freely — there’s no right or wrong answer here.
What are you already good at? What comes naturally to you?
What do you enjoy doing with your time?
What are some ways you could take what you were doing in your old role and adapt that into a new venture?
Your new business doesn’t need to rival Google or make a big splash with a new app. If your old role was in HR and you’ve got the right certifications and skills for similar roles, consider launching a consultancy or becoming a recruiter. If your passion is something like cooking and owning your own restaurant, consider starting an in-house service that caters to the local community while you build toward opening a restaurant. Remember — small steps are still steps forward.
Formulate a Business Plan
Before you start bringing on customers or incurring any costs, it’s crucial to take the time to write a detailed business plan. A business plan is meant to be dynamic, and will likely change as circumstances or the market fluctuates, but it’s important to think through the details of your business. These can include, but aren’t limited to, things like:
Your primary customer audience
The competition and industry players
The specific and unique niche your product or service fulfills
Your pricing structure
The mission and values of your business
A forward-thinking future business structure
The specific business goals you want to achieve
Not only will a business plan help keep you on track, but it can also help you gain access to funding from investors. For more resources on the ins and outs of getting started, check out our guide on Becoming a Founder.
Build Your Network and Market Your Business
Once you know what your business actually is, and you’ve got a plan to get it started, it’s time to let others know! Lean on your circle of friends, family members, previous colleagues, and any other contacts you’ve gained in your career to help spread the word.
Now is also a great time to utilize your network for introductions to even more people. This can lead to having more prospective customers in your pipeline, getting more market and industry insights, or even potential partners who want to help you get your business off the ground.
Connecting with other founders can be incredibly impactful, too. Hearing about their experiences and learning from their mistakes can help you set your business up for success in a very unique way. By building a community of fellow entrepreneurs, you might find even more opportunities for growth and development. Plus, you’ll have peers who just “get it.” And, during the founder journey, that can be more valuable than you realize.
How Justworks Can Help
Being unemployed is far from easy — it can feel scary, defeating, and overwhelming. But finding your motivation and using your extra time to begin a new and exciting venture can reinvigorate your career in ways no other opportunity will. While starting a business isn’t simple, it can be immensely rewarding (and perhaps better than working to achieve someone else’s goals).
Re-framing unemployment can help you turn that closed door into an open one. And when you're ready, Justworks has your back with the tools and support to help your business thrive.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.