Financial Necessity Is the Mother of Business Invention (Issue #7)
Launching a new business can save your bacon if you lose your job
Losing your job can feel like the end of the world. That’s especially true in a tight job market like the one we are experiencing right now. Several thousand people in tech have been laid off in the last few months, and more layoffs are coming.
I’ve been through it before, and I can tell you it’s a frightening feeling. It’s downright terrifying if you’ve been living at the edge of your income without a significant financial cushion to tide you over until you land your next job. Unfortunately, it is taking people much longer to find one now.
Here’s some data from a recent Harris poll:
71% of those looking say the job search is more complicated than expected (it often is).
63% say they’ve searched for a new job for over 6 months.
48% report applying to over 50 positions (I know someone who applied for 100 positions before finding a job).
72% of job seekers say that companies are acting like they don’t want to hire anyone (e.g., slow response times, canceling interviews, ghosting people).
Now, you could keep interviewing and hoping your next job is right around the corner, week after week and month after month. Or you could take advantage of this push “out of the nest” and turn lemons into lemonade (I’m mixing my metaphors a bit). Quickly launch a solopreneur business, start talking with potential clients, and get some income flowing in right now while you’re interviewing for a full-time position.
“When one door closes another door opens; but we so often look so long and so regretfully upon the closed door, that we do not see the ones which open for us.”
― Alexander Graham Bell
You might discover that your new business can support you, so finding a new job is suddenly not a burning necessity.
You may also realize you’re tired of leaving your career and life stability in the hands of an employer who can abruptly eliminate your job when the company needs to cut expenses.
You may enjoy being independent so much that you actually don’t want to return to a 9-5 job.
Finally, you might be surprised by how much you grow when you leave the comfort zone of a job that narrowly defines what you can and cannot do.
This has happened to me a couple of times during my career. I started my first solopreneur business in Silicon Valley right after my first layoff. I built it in less than a day, and it doubled my annual income from what I had been earning from an earlier employer. I talked about that in this article.
I started my second solopreneur business when I left my last corporate job over 12 years ago. Originally, I had only intended to do some consulting while I was looking for my next leadership role. But, as the months went by, I decided to stop interviewing for full-time jobs. As the years went by, I realized I was never going back to the 9-5 world. The freedom is addictive, and I simply can’t give it up to be put back into an employee box.
If you’ve lost your job, I’m not saying you must give up searching for a new one. It is nice to have an employment option in your back pocket, just in case your new business isn’t quite meeting your financial needs.
However, if you’re reading this and subscribed to Invincible Solopreneurs, escaping the 9-5 is what you want, anyway. Right? In an ideal world, you would rather not be working for someone else. But you’ve probably been reluctant to make the big leap and go all in on your business.
Well, now’s your chance. If you’ve already lost your job, this is your opportunity to see if you can make a go of it on your own. If you can give it a few months, be patient with fully replacing your previous income as an employee. It takes a little time.
With my first business, I was lucky enough to land a full-time client immediately and replace my income completely.
With my second business, I landed a retained client within a week or so. It didn't fully replace my income, but it was enough to support my family.
With my current business, it took about 6 months to generate a decent revenue flow. I didn’t feel comfortable with my sales pipeline for about a year, so I had to be more patient.
If you can’t seem to make it work this time, there’s no shame in returning to an employer. I have several friends who flow back and forth between jobs and running their own businesses. Work is more elastic than we think, or at least how I used to think.
Ok. Let’s talk about what it takes to spin up a business and start making some money from it. The good news is that this process is way faster and much easier for a solopreneur vs. an entrepreneur who needs to secure funding, hire employees, find office space, etc.
I previously wrote about starting a business in 30 days, but that assumes you have a job and can build your business in parallel while you feel secure with your employment income. But, if you’re out of work, you need revenue ASAP.
The focus is different. The timeline is tighter. You don’t have much time to explore and experiment. You need to get your solopreneurial business up and running as quickly as possible and land clients to get some income flowing. Here are 10 steps to making that happen.
1. Define a simple business model
Time is of the essence, so you can’t spend months defining your new business, exploring various products and services, and testing ideas. If you already have a product or service unrelated to your old job, great! But, if you don’t, I highly recommend you use your old job description to define your new business model and the services you provide.
Your pricing model can be based on factors such as:
Your desired annual salary.
What you think your billable hours will be (don’t forget to account for vacations, holidays, etc.).
What competitors typically charge.
What a fully-loaded employee would cost a potential client to do what you do (e.g., base salary, bonuses, stock options, insurance, other benefits, equipment, software, office space, etc.).
A high end of your range that you think you deserve based on value delivered.
A low end of what you need to survive (i.e., it’s not even worth your time if you can’t get paid this rate).
Your estimated total expenses to run the business.
Your profit margin (e.g., 20%) that you will use to reinvest in growing your business.
How you want to sell your goods or services (e.g., hourly, project-based, monthly retainer, packages, etc.).
Don’t worry about creating the perfect business model and pricing right now. You can course-correct and improve things later. As you serve more happy customers, gain experience, improve your offering, and feel more confident, you can raise your prices appropriately.
2. Update LinkedIn with your new business
I often recommend to my career coaching clients they add a consulting business to their LinkedIn Experience section (with no end date). Doing this eliminates any employment gaps, plus it can be a nice source of side hustle income.
Since you’re actually launching your new business, update your LinkedIn to list it and include a few bullet points about the services you provide (or goods sold). Time is of the essence, so don’t worry about coming up with some fancy name, applying for a trademark, etc. Just use your name (e.g., Miller’s Software Consulting) or whatever you want right now. You can come up with a more polished business name later.
LinkedIn also provides a guide to getting started as a service provider. You can create your Service page, add info about your services, and get listed as a provider. I receive new client project requests almost every day from LinkedIn.
3. Put your business out there
Don’t be shy and don’t wait too long. The sooner you launch and get your first client, the sooner you’ll generate revenue. You’ll also learn and improve your business marketing and offers as you get customer feedback.
Believe it or not, I announced one of my new businesses on the day I resigned from my last corporate job. I wasn’t 100% sure what I was going to do with it, but I leaped off the cliff and built my wings on the way down. The story linked below includes the actual blog post I published that day.
You don’t have to have everything figured out ahead of time. And you can change your mind later as you learn more and evolve your business. Nothing is set in stone or permanent. Go and flow!
4. Connect and ask for testimonials
Testimonials are essential for a small business owner. People need to feel like they can trust you and you’ll deliver what you promise.
As a solopreneur, your personal and professional reputation transfers to your business reputation. Using your professional reputation helps you overcome the “cold start” problem every business faces.
Before you leave — or lose — your job, connect with your coworkers on LinkedIn and social media. It’s a lot easier to do this while you’re still connected through work.
If you enjoyed working with some of your colleagues (and managers) and you had a great relationship, ask for a testimonial. They’re called “Recommendations” on LinkedIn, and I suggest you ask for one there. It provides more credibility than text on your website.
5. Engage your network
I’m always talking about using the power of your network to find a new job. Well, your network is also a powerful resource for your business. When you light up your connections, you’ll turn up more opportunities.
A significant number of my clients are people I used to work with in my past corporate jobs. It’s been really cool to keep the connection going and still be helping people with their careers.
I also receive a lot of referrals from past clients, colleagues, friends, and acquaintances in my network. I just recently spoke with someone about her upcoming job interviews and offer negotiations. A mutual friend referred her to me.
Referrals are the lifeblood of any business, but especially for a solopreneurial business running on a lean marketing budget. So, don’t be shy about talking with the folks in your network. Be clear about what you’re doing, what you offer, the clients that benefit the most from your business, etc.
You can keep it fairly casual. Here’s an example:
“Hi Toni! I don’t know if you’ve heard, but I’m no longer with Cooper and Associates. I recently launched my own accounting practice, and primarily work with small business owners to provide bookkeeping services. If you know of anyone who might benefit from my 12 years of accounting experience, I would appreciate it if you could send them my way. Thank you — and we still need to have that lunch soon (on me)!”
6. Find your circle of advisors
Your employed friends are going to say you’re crazy to leave the security of having a job (which is funny if you’ve just been laid off or fired). Some will actively discourage you and try to scare you back into the arms of an employer.
In the best case, your employed friends simply won’t understand what you’re doing because they aren’t experiencing it. They can’t give you advice, commiserate, or fully support your endeavor since they aren’t walking the same walk.
One of the most valuable segments of my network is my circle of self-employed friends. They were the ones who helped me when I launched my first business. They’re the people I could turn to when I had questions, faced issues, doubted myself, and was struggling.
So, create your trusted circle of solopreneurial advisors. If you can’t make one, join one. That’s the point of this newsletter and my Invincible Solopreneurs community.
Share your issues.
Ask for feedback.
Receive and provide support and encouragement.
Return your value to the group, too.
You don’t have to do this alone!
7. Create an online presence
I shared a lot of details about domains and website hosting in the past article. When you have the time, you should definitely invest in a decent website to promote your business (note: decent doesn’t mean expensive).
However, when you’re in a hurry to get your business up and running, keep it simple and move fast. For example:
Set up a free one-page website on Carrd.
Publish a free website using Wordpress.com.
Use Substack to create a free website and get a free newsletter and podcasting hosting with it!
Basically, you just need a site to describe your business, its goods and services, and a way to sell, take payments, schedule time with you, etc. Speaking of payments…
8. Set up payments
Getting paid is the whole point of launching your business and making enough money to support yourself. When I first started a business, I had to mess around with invoicing and waiting weeks (or months) to get paid for the consulting work I provided.
Now, I prefer to sell my services up front, which ensures you get paid and are not left hanging later (e.g., some of my old startup clients went bankrupt before they paid my final invoices). People can retain me for monthly coaching engagements, purchase coaching calls, and subscribe to premium experiences and communities.
Some easy ways to get paid online:
Venmo - 1.9% + $0.10
Stripe - 2.9% + $0.30 per successful charge
Paypal - 2.99% to receive money for goods and services
Gumroad - 2.9% to 9%
+30¢ on each transaction
Bank transfers - Fees vary
9. Set up your social media
Over the years, I’ve changed my mind about social media. I used to set up new social media accounts for every new business I launched. But, you know what? People don’t enjoy following most businesses on social media.
As a solopreneur, you are the business. Now, I simply talk about what I do and offer my thoughts on social media from my personal accounts on Twitter, Facebook, LinkedIn, Instagram, etc. I link to my newsletters, free coaching calls, and services.
I post a mix of personal and professional stuff, which may turn some people away. So be it. I’m a solopreneur, so the lines between my personal and professional lives are a bit blurred. But it gets way more engagement than my business social media accounts ever did.
10. Market consistently
Most small business owners suck at marketing. When I first started running a business, I didn’t like to do it. It felt strange. I guess it was because I had always relied on a sales and marketing team when I was an employee.
However, as a solopreneur, it’s all you! I would say I spend most of my time doing some sort of marketing and lead development. Some of it is active (e.g., engaging with people online), and some of it is “passive” through content marketing that I published years ago.
People need to know that you exist! They need to know what your business offers and how you can help them. People can’t hire you if they don’t know who you are, what you do, and why it matters to them.
How can you improve their lives?
How will you solve their pain?
You must keep your sales pipeline full. Too many small business owners market and sell in bursts of activity. They land clients, start working on projects with them, and ignore their marketing and sales until they need a new client. But it takes a while to spin things up again, which causes a gap in your revenue stream.
Find ways to scale and automate so you can handle more clients. If you truly have overflow and can’t serve everyone, consider partnering with another solopreneur, hiring contractors, or sending referrals. We all send business to each other, which is one of the additional benefits of maintaining a circle of trusted business peers.
Bonus: Have some fun!
Losing a job is never enjoyable. But look for the silver lining in this push to finally do your own thing and never work for a boss again.
This is your chance to build a business around your life instead of living your life around your job. Losing a job and launching your new business is your opportunity to:
Do more of the work you love (and less of what you hate).
Work with the people you enjoy spending time with.
Set your own working hours.
Own your calendar and how you spend your days.
Work as much — or as little — as you want.
Get paid what you’re worth.
Work where you want.
Work how you want.
I know this article is just the tip of the iceberg of what it takes to launch and run a business. But that’s why I created the newsletter and community.
I’m a solopreneur too, and have been running my most recent business for over 6 years now! We’re on this journey together. Don’t be shy about reaching out to talk with me.
Larry Cornett is a leadership coach and business advisor. If you’re interested in starting your own business or side hustle someday (or accelerating an existing one), check out his “Employee to Solopreneur” course (launching later this year).
Larry lives in Northern California near Lake Tahoe with his wife and children, and a gigantic Great Dane. He does his best to share advice to help others take complete control of their work and life. He’s also on Twitter @cornett.