Bouncing back: starting a business after redundancy
The people who've been there and done it explain how to turn redundancy into an opportunity.
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
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
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
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'
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
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
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,
worst comes to worst, you will have learnt a lot more from the
experience than just how to write a cover letter.
Find out more about Bubble and
Balm, Dutch by Design and Motormouse
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