5 tips for starting a business after retrenchment
Retrenchment is a word that can strike fear into the hearts of even the most seasoned veterans of the corporate world. In fact, the longer you’ve been with a company, the more daunting retrenchment can seem. Will you ever be able to find another job as good as, or better than, this one? Will you end up in a job you hate, through no fault of your own? And during a global pandemic and economic downturn, prospects look even bleaker.
But what if there is another alternative? What about being your own boss? What about taking your years of experience, knowledge, network, and starting your own business, rather than entering the recruitment merry-go-round? You might have something to offer the marketplace, and taking ownership of your own future is empowering and rewarding in a way a salaried job usually isn’t.
Starting your own business after retrenchment, however, isn’t just a matter of changing your job title to “Entrepreneur” on LinkedIn.
Here are my top five tips to set yourself up for success.
1 - Figure out what you want to do
This may sound obvious, but often, people fall into familiar patterns that they don’t actually enjoy - becoming a freelancer in their particular career, for instance. That doesn’t mean that’s not a viable option for you, of course. Being a freelancer might be the perfect answer for you. But maybe you’ve had a small side-hustle for years that could be expanded to full time career. Perhaps you have a hobby that, with a little bit of business training, could turn into a lucrative enterprise.
Consider all your options, weighing up the pros and cons, until you decide on something that makes sense for you. Some of the pros and cons you could consider include: financial viability; level of enjoyment; level of job satisfaction; potential income; time to market; setup costs; and also, whether the market wants or needs your product or service. Which brings us to...
2 - Test your market
Just because you might think that a girls-only version of a popular party game is the next best thing, doesn’t mean your market agrees with you. At the same time, just because you were highly respected in your previous career doesn’t mean the market can support more freelancers or consultants in your field. This is why market research is incredibly important for any entrepreneurial endeavour.
There are many market research techniques you can use, from direct approaches to social media and many more. Pay attention to this part of the process, because it will really help you understand what your potential customers or clients want and need. If you are able to fill that niche, just by adjusting your ideas a little bit, you will be halfway to success already. Once you have a clear idea of what direction you are heading in, and how your clients will respond, it’s time to...
3 - Develop a business plan
It is never a good idea to try and start a business without a plan. You need to have various things in place to ensure you are operating legally, and having a business plan will help you manage that. It will also help you lay out the finer details of how you will operate; this is the foundation on which you will build a successful career and business.
A business plan is also vital if you want to attract investors or apply for a business loan, enterprise development programme, or venture capital support. Without a clear business plan, including income projections, you will struggle to access these support measures that exist to help small businesses get off the ground. While developing this business plan, remember to...
4 - Consider your finances carefully and budget well
Of course you want to do something you are passionate about and enjoy. But let’s be honest, you need to make money, otherwise you wouldn’t be trying to figure out how to turn it into a business. The old adage “it takes money to make money” is true to an extent - you will need to put in some time, money and effort into getting your business running. As you are starting a new business post retrenchment, you will hopefully have some capital to get started with, but that isn’t always the case.
However, much of what you get from a severance package, investment pay outs and savings, usually comprises the sum total of what you have to start with, until you are able to start bringing in a profit, or secure financial support. That’s why planning is absolutely critical. You need to plan your expenditure carefully so as not to waste money, or spend it in the wrong places.
5 - Learn to run and market your business
One of the places entrepreneurs often go wrong is in marketing and advertising themselves. However, as an entrepreneur, you often don’t really have the budget you would like for marketing, at least not at the start. Another mistake they make is assuming that, just because they know their product or service well, they won’t have trouble running a business. However, running a business is complex, and you will need the necessary skills.
Fortunately, both of these problems are solved in a similar way - learning! There are multiple online tools available that can teach you everything you need to know about running a micro enterprise, and how to manage growth. You can also just as easily learn how to effectively market yourself and your company, product, or service. Investigate free or low-cost online short courses or entrepreneurship workshops to help you get to grips with running and marketing a business
Considering tackling something new and challenging as a post-retrenchment entrepreneur? Consider upskilling yourself in a new career. ManpowerGroup’s powerYOU courses help you learn and broaden your range.
Lyndy van den Barselaar is the Managing Director at ManpowerGroup South Africa