Many people think about starting their own business. Most, however, get comfortable with the salary coming in and regard it as madness to give that up on a gamble. So the loss of a job might actually represent an opportunity to make that long lost dream a reality.
Career and Staffing: Laid-off? There may be no better time than the present to develop that product you’ve been daydreaming about or launch that consulting firm. Here are some tips to get you started.
Of course, there is always the fact of having to pay the bills. That causes most people to engage in a frantic search for something, anything to get some money coming in. But why take some poorly paying IT gig when you could be running your own show and possibly making more within a year?
Divide and Conquer
For those lucky enough to have a supportive spouse or partner, one good strategy could be called divide and conquer. The concept is this: One person (who is still employed) agrees to support the home, pay the bills, and so on, while the other attacks the establishment of a new IT business with vigor.
In some cases, this is easily manageable. In others, severe cutbacks in expenses will be required. But the sacrifice could be worth it in the end.
For this to work, it is best to set a timeline of around a year (i.e., you have a year to give it your best shot). Without that deadline, the years can drift by and the amount of money poured into the business can just keep multiplying. A year also provides enough time to see how well you do and adds some necessity level to get into gear rapidly.
Arranging Your Time
If you don’t have the luxury of having a partner who can support you while you launch your idea, there are other options. Your parents may help, for example, or you can get a job and spend time on the new business during your off-hours.
That can only succeed, though, if you apportion your time. If you have a day job, set a clear-cut schedule to work on the business plan — perhaps 7 pm to 10 pm Monday to Friday and all day Saturday. If you are doing software development to launch a new application, such a schedule can certainly make sense. But if your new activity requires interfacing with clients, potential clients and suppliers during office hours, you are going to run into a time constraint that will likely cripple the embryonic venture. In that case, take a job evenings or weekends, and leave the days to your chosen career path.
Whatever you do, don’t fall into the trap of sleeping in until noon and dabbling at it. Set your clock early, get started by 9, no fail, and put in a full shift. That’s the only way to pull it off.
Types of Business
Maybe you already have a firm idea in mind. Good. Go ahead, plan it out and execute your plan. For those with no idea beyond a general urge to run your own show, here are three suggestions:
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1. New Product
Developing a new product is one way to go. Those with software or web development skills have this option. Or, perhaps you have a great idea for a product but don’t have the technical savvy to put it together. Share your vision with a friend who has the skills required, and see if she or he would be willing to put it into action. Don’t wait too long, though. Many people have thought up a great concept but didn’t act, only to see others bring them to market some months later.
Consulting is another option. It’s best to focus on a specific niche like Oracle, SQL, SAP, Windows, QuickBooks or Web 2.0. Alternatively, a specific vertical with which you are familiar would work as well. Pick an area you know you are good at and promote your services. Be alert for opportunities as you do this, and be prepared to revise your original concept to fill an obvious need. What you think the market needs and what is actually in demand are often poles apart. The money is made by fulfilling what is most in demand.
Tip: While your old company may have fired you in a hurry a few months back as a knee-jerk reaction to appease shareholders, they may be desperate for your talents and would be willing to take you on as a freelancer or sub-contractor. Check it out. Such a gig is often a good foot on the consulting ladder and opens further doors.
3. Project Management/Marketing
Maybe technology is not your forte. You excel in the administrative, project management or the PR/marketing side of IT. Plenty of possibilities exist there, too. Define what it is you do and look around at the market. Who needs such services? There are plenty of openings for people who can get things done.
There can be a wide gulf between IT departments and outsourcing firms, for example. The role of facilitator is often well rewarded. Similarly, PR and marketing present plenty of avenues. A technology-based PR or marketing firm could work if you focus it on a specific niche or vertical. Government, startups, education, financial services — whatever area you worked in before, leverage that experience in whatever you start.
Overhead and Investment
Caution: Don’t spend your retirement nest egg, savings and all the equity in your house in a poorly conceived hunch. Time and again, people think they have an idea, dump hundreds of thousand into it and never get it to bear fruit.
Yes, you may need a few supplies and some promotional materials to get going, but don’t be silly about it. Spend within your means, forget about venture capital money (almost nobody is getting it these days) and decide to make it pay within a limited budget. If you are onto a winner, it will be able to turn around a profit in its early stages. Consulting, for example, doesn’t need much to get going. Neither does software development. So forgo swanky quarters that nobody is likely to visit. Avoid investing hundreds of thousands in new gear initially — use eBay and pick up what you can for next to nothing and make do with that until you can afford the equipment you really want.
Keep costs down and necessity level up.
Lastly, a note on loneliness. Some people love the life of a freelancer, a lone consultant or a home-based business owner. Working from home and being alone all day doesn’t bother them at all. They stay motivated, crank out work all day and do well.
Others, however, suffer badly from the lack of camaraderie. They can’t seem to get along without those hourly chats around the water fountain. Some even pine away the working days despite earning really well. I knew one IT consultant who quit a lucrative gig and took a significant cut in pay to rejoin the ranks of the employee.
Another caution: if you don’t like responsibility, avoid being self employed. Being on your own, there is no one else to blame. It’s up to you to generate work and keep a steady supply of new business to stay afloat. If it terrifies you to think of having absolutely nothing lined up for the coming month while the bills are mounting, don’t start your own business. In most cases, however, one does get used to the cyclical nature of it after a while, and it loses its terror.
On the plus side, it’s great to be your own boss, to have no ceiling on your income and be free to take the entire day off midweek to take your kids snowboarding. But it takes a little time to get there. Give it a year and see how you do. At the very worst, you can get a salaried job in IT and be better for the experience. At best, you might create a hot new product or land a dream contract that secures your future.