The fantastic business opportunity that is... Redundancy!

Posted by Claire White ¦ 18th October, 2012 ¦ Business Skills

In truth, in such dire economic times, we've probably been lucky to have avoided the situation before now but I'm a big believer that redundancy (once come to terms with) can be a huge opportunity to take stock and make some positive changes.

In my research I came across a great article from the Nat West on how to turn the negative experience of redundancy into a life-changing decision to build your own business.  Being your own boss - in control of your future, master of your own destiny - is many people's dream, and redundancy can be the catalyst that helps you achieve it.

Read on...

Almost 8% of the UK population is unemployed - and the figure has been that high for more than a year. The labour markets might be starting to pick up according to our newspapers, but jobs in almost every industry are worryingly scant if you ask anyone who's trying to find one. Searching for a new employer isn't your only option though. Starting up a business might seem like a far flung dream, but there are plenty of others who are doing it - and once you get your confidence back on track, you can too.

Why start up a business when you've been made redundant?

For Sue Acton, redundancy became an opportunity - albeit one realised after an emotional wrangle. She'd been working for Barclays for 11 years when she was made redundant in 2007. It was the only company she'd worked for since leaving uni. "You find your identity is tied to what you do. It's like a badge in a professional environment - then suddenly you don't have that anymore." She found the identity recalibrating 'a big challenge'.

But she'd been toying with an idea for her own business in the back of her mind for a few years - and suddenly those half-baked dreams of starting a fairtrade soap company solidified into a real possibility. "I just thought, what's the worst that can happen? I could lose my house - could I cope with renting again and getting another job? And I realised yes, I can do that." She says it helps that she doesn't have any dependents at the moment either. "If I don't do it now I'm never going to do it. And which is worse: getting to 40 and regretting it, or giving it a try and failing?"

Bubble and Balm was born, and in its first year has already won multiple awards, as well as becoming the first 100% fairtrade bodycare business in the UK.

For many, starting a business isn't so much a choice as a necessity. When there aren't jobs available, you simply have to find a way to support yourself.

Older age and disability can work against job-seekers too, making it doubly necessary for them to go self-employed. Such was the case for Venka de Rooij, who was made redundant from her sales role at Bloomberg after suffering from acute RSI for two years. Her affliction was so severe she needed rehabilitation to learn to walk again. "I knew nobody would give me a job in the city anymore, so I started up with the help of a £5,000 Prince's Trust loan." She launched online design retailer Dutch by Design in 2003. "I thought at least if I start up I can manage my time better, as that's what I need for my condition."

De Rooij now disputes the idea that being self-employed is riskier than working for someone else. "You could lose a job at any moment. This way you have more power and control. You know where you stand."

Rebuilding your confidence

For most people, being made redundant gives their confidence a battering, to say the least. So the first step towards starting a business after redundancy is reasserting your self-belief. It's that renewed sense of worth and ability that will propel your idea forward and make it a reality.

David Bailey was pushed out of the company he'd helped build and had previously owned, after 23 years of working there, by new management. "I got the letter saying I'd been made redundant on my 50th birthday, thinking it was a birthday card. It came completely out the blue - and it was enough to kill anybody. A real smack in the teeth." He fought the dismissal in the employment tribunals and won, but the process took four months. "That's a long time when you're fighting for survival and you don't know what's going to happen. It's like being on a life support machine."

Bailey knew his age would inhibit his ability to get a new job. "You're going to get depressed by doing 400 applications a week and not getting a reply for 399. I thought: I'm not going to depress myself. I'm going to look for something I can do myself." His belief that he deserved better than the way he'd been treated hardened into a powerful 'I'll show them' mentality - and that made him determined to succeed.

"Emotionally I was angry for a long while. But you've got to look forward. If you're going to focus your energy you might as well focus it on something you have control over."

Bailey recommends 'doing something, anything' to help stave off depression and rebuild your confidence - "even if it's digging a hole for some charity, that's better than doing something negative. Because if you don't step forward and do something, you're going to end up eating too much, drinking too much, putting weight on, getting short-tempered and losing your friends."

Surrounding yourself with positive people is crucial too. For Bailey, that ray of sunshine came in the form of his wife - and now business partner - Patti. "It's very important in that situation to not be surrounded by whingers," he says. "Talking to other redundant people doesn't necessarily help."

Sidestepping that emotional black hole by starting a business has worked out pretty well for Bailey, by the by. His company Motormouse, which makes computer mouses modelled as sportscars, launched in 2008. It now dispatches to more than 50 countries and recently won £120,000 investment from James Caan after appearing on Dragons' Den.

Adjusting to the change

Of course, working for yourself is very different from working within someone else's business. Many of those differences are huge benefits, and help explain why 500,000 people start up their own business each year. But you need to be prepared for the tougher times. The reality is, as Bubble and Balm's Acton neatly puts it, 'every job has its highs and lows - but when you're running your own business, everything is amplified'.

"You have days when, especially at 2am, when you just think: I must be insane, I should get a job," Acton explains. She says adjusting to no longer having the impressive 'Barclays' name to drop in when she calls people up is tough. "And there's nobody to bounce things off, to see if something is a good idea. You've got to trust your own judgement all the time. You haven't got that ready-made team, so you have to work really hard at building up a network of people." She also points out that on the more practical side of things, she's realised 'the stationery cupboard doesn't magically stock itself!'

On the flip side, you get 'very instant feedback from customers - it's much more direct, without all the politics of the corporate world'. "And there's something really nice in saying I run my own business. And in creating a product." She says the first time she saw Bubble and Balm soaps on the shelves of Waitrose, she burst into tears of joy. "It's hard to describe what a lovely feeling it is."

Possibly the greatest challenge for new start-ups and self-employed people is loneliness, which we at Smarta hear cited as a difficulty time and time again. There are more social networks and offline business networking groups and events than ever before, which help hugely. And Dutch by Design's de Rooij says if you struggle with daytime isolation, 'the best thing is to go to a shared office environment where people are in exactly the same circumstances'.

Worth the risk?

A word of caution, though: running your own business isn't for everybody. You take on more responsibility than you probably ever have before, and you'll be working long hours. We'd be lying if we said this route is fail-safe: five in six businesses fold in their first five years.

But even if this business doesn't work out, you will, hopefully, feel more fulfilled than had you not at least given it go. In our humble opinion, it's far better to come out fighting than to hang around feeling sorry for yourself and getting worn down by rejected job applications. Plus, how good will your cv look if you can say you were founding and running a business rather than just trawling job sites all day?

"You don't realise how far you can go when life is comfortable," Motormouse's Bailey explains. "You get scared of stepping outside your parameters. You only step outside them when something makes you. Then you realise: there is life after this. There is something else out there."

De Rooij says she would now 'never' work for someone else again. "I've learnt so much more than I could have done in any job, and met so many interesting people. I love my life."

Why not use this redundancy as an opportunity to try out the idea you've been daydreaming about for years? You might just end up happier and more fulfilled than you could have ever imagined. And, if worst comes to worst, you will have learnt a lot more from the experience than just how to write a cover letter.

Was your business born out of redundancy? We'd love to hear your story.

 

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