by Suzanne Caplan
Losing a job is never easy, no matter what the cause. A large recession may get you a lot of company but that never solves the problem of how you can get back on the path to work and a steady income. Coming from the formerly heavily industrial city of Pittsburgh, you probably won’t return to that steady income by waiting to be called back to work. And really, the key word here is work; that is what you are looking for — the system to turn your labor into money. Maybe now is the time for you to work for you.
I am not talking about building an empire — starting with a small idea and growing it into a major force employing many. That may happen, but it is very rare and accomplished by those who have a real entrepreneurial drive. You do not need a major venture order to earn a living by being self-employed. This article offers five smaller ideas to work on.
- Become a contractor to the company that you just left. If your employer had work but needed fewer hours or people, you may be able to come back as a subcontractor. You do the work when it is available and find something else when business is slow. This technique works in only some industries — building contracting, IT services, graphic design and professional services, home healthcare, and more — as you must be a true independent employee to comply with the current tax laws, which means you control your own schedule and your own tools.
The value to the employer is that the extra employees do not become overhead when business is slow, and the value to you is that you will make more money for fewer hours if all of your time is spent on productive work.
- Do the same work for several companies. If you have been a valuable asset to your former employer and can provide the same value to others in the same industry, set up a single-member limited liability corporation (LLC), the easiest way to form a corporation, and market your skills to all businesses that may need them. Your projects will be shorter, but your payments will be higher. The key to success here is in the marketing.
- Look for a small company to buy. By small, I am talking about fewer than five employees. Owners looking to retire may be willing to finance the purchase, and then you can pay for it out of increased cash flow as it grows. Some businesses just need new energy to drive them on to better results.
- Consider a franchise. The prepackaged business startup comes in many sizes and many price ranges — from consulting programs to full-scale restaurants. You will get assistance in all phases of the business and ongoing support. Lenders sometimes are more comfortable making loans to a franchise because of the existing track record of the other similar operations.
Remember that you will have to follow a prescribed business path which may keep you from exploiting some of your personal strengths, and you will have ongoing royalties to pay. Make sure that you are getting value in terms of corporate marketing for those fees.
- Look for Strategic Partners. If the skills you have at not quite enough to cover all of the bases, you may be able to find someone whose strengths are complementary. For example, you have the technical skills but weak sales and marketing skills, or you could sell virtually anything but don’t do well with details. Find someone who is compatible and consider various forms of joint work. You may form a business together or may function only as a joint venture. The main difference between the two is one is permanent, and the other has a timeframe and a goal; when the goal is reached, the venture ends.
An economic downturn is a great time for all kinds of creative collaborations, building virtual businesses that operate to meet the current level of demand. With little overhead, you can be very flexible and make comfortable profits.
Final Thoughts on Becoming Self-Employed
At a time when companies are reluctant to hire, we all need to get out of our comfort zone and find new answers. Self-employment may be a temporary solution or a permanent change of direction.
Review our sidebar feature: Economic Downturn Can Give Birth to Innovation and Entrepreneurship.
See also our no-cost Entrepreneur & Business Start-Up Tools and Resources.
Questions about some of the terminology used in this article? Get more information (definitions and links) on key college, career, and job-search terms by going to our Job-Seeker’s Glossary of Job-Hunting Terms.
This article is part of Job Action Day.
Suzanne Caplan is a lifelong entrepreneur and author of 13 books on the topic. The latest is Start Your Own Business and Hire Yourself (JIST 2009). She lives in Pittsburgh, and recently founded WomenEtcetera!, an online social network for women over 50.