Top 5 Mindset Shifts to Start a Business After a Layoff
Ben Gran, The Motley Fool
5 min read
Image source: Getty Images
Getting laid off from a full-time job can be painful, stressful, and sad -- but it can also be an opportunity to start a business. Many people with professional "knowledge work" skills that are useful for full-time corporate jobs can also make a living as freelancers and consultants.
I recently offered advice to a friend who got laid off from a tech startup and is interested in starting a business as a solo entrepreneur. Anyone who has recently been laid off from the corporate world might want to try something new -- and starting a business is not easy or stress-free, but it can unlock a whole new way of life that's better for you (and your bank account).
I want to give you the same advice I gave my friend. Starting a business after a layoff doesn't always require a lot of money; it might just require you to make a few entrepreneurial shifts in mindset. Here are a few.
1. Replace one big paycheck with lots of smaller paychecks
Having a steady job with a reliable paycheck feels fantastic. Losing that sense of security can be stressful and disorienting for the newly laid-off.
But here's the thing about starting a small business: Instead of getting one "big" paycheck from one full-time job, your business has the opportunity to attract lots of little paychecks that add up to even more income.
Let's say you had a corporate job that paid $5,000 per month. What if you could get five consulting projects that paid $2,000 per month each -- that would double your income! Imagine making $10,000 per month, or $120,000 per year! Starting a business canunlock life-changing money for your family and your bank account.
2. Your salary was a ceiling, not a safety net
Full-time jobs typically pay what they say are "competitive" salaries. Companies don't want to underpay you, because then you'll quit. But they don't want to overpay you either.
As good as it feels to get that corporate paycheck and health insurance and paid vacation, the company is not your friend. They want to keep you working for them. They'll pay you just barely enough not to quit.
Big corporations have entire analytics teams and HR departments that are constantly crunching the numbers on this. (And yes, sometimes people get rewarded for star performance with big promotions and pay raises, but lots of people work hard and still feel frustrated by how little money they make.)
If you start a business, you no longer have the safety net of a steady paycheck. But you also no longer have the ceiling of a corporation putting artificial limits on how much money you can make each month or each year. You might be surprised at how much you can make as a small business owner, especially if you have in-demand job skills. Work hard. Hustle. Fly!
3. Create your own forward momentum
Before I became a freelancer, I never considered myself to be entrepreneurial. I didn't know what "business" really meant, or what it took to make money out in the world beyond a full-time job.
As a business owner, you have to design your own job. You have to set up your own structure. You have to be your own sales team.
There are lots of opportunities, if you just keep pursuing them. Go in the direction of the projects and clients that are most inspiring and energizing. Over time, you can find more of the right clients and opportunities that are the best fit for your talents and energy and personality while weeding out the ones that aren't the best fit.
4. Your productive capacity is unlimited
In a typical full-time job, the work hours are set: 9 to 5 (or more likely nowadays: 8 to 6...or 7, or 8). One of the most inspiring things about starting a business is you can be productive any hour of the day. You can make money seven days a week.
You can work as much as you want, or as little as you can get away with. The absolute flexibility and expansive possibilities of starting a business are incredibly exciting -- and you're less likely to get burned out when working long hours because you get to keep all the profits for yourself and your loved ones.
5. Diversified income is better than all your eggs in one basket
Here's another great thing about starting a business: You can build up a diversified income. Just like you don't want to invest your life savings in a single company's stock, why should you rely on just one company for 100% of your income? Especially when that income (and your health insurance) can be taken away from you at any moment, for reasons beyond your control, or for no reason at all?
Self-employment is often thought of as risky or uncertain, but if you can get well-established as a business owner with repeat clients and referrals, you can have a strong foundation of diversified income. Getting your money from lots of different people -- instead of just one boss who can fire you at any moment -- feels more resilient and less risky to me.
Bottom line
Not everyone is cut out to be an entrepreneur. If you've recently been laid off, ideally you can find another job soon, if that's what you want.
But if any of the ideas in this article sound inspiring to you, you might be better suited to start a business than you think. Turn this layoff into the start of a new lucrative way of life.
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