Starting a Company while Laid Off

So what do you do if you’ve lost your job? I know a lot of people are in this situation right now, including myself, so I will offer what I’ve experienced. I know my situation may be different from yours, but use what you can.

At first, I experienced some feelings of being lost. What do I do now? How do I pay for X? What are my options?

Along with being lost came the two F’s: fear and failure. With responsibilities, comes the fear of not being able to meet those responsiblities. Other people may depend on you or your salary and so perhaps you’ve let them down now. I’ve come to realize though that this is not true. The situation that led to your layoff was likely beyond your control and the only thing you can do now is control the present situation.

Coincidentally, in this case the two F’s brought along their friend the third F: freedom. Believe it or not, you are more free now than you were when you had that steady paycheck. So why not take advantage of it?

A couple of days ago, I received a card during a party celebrating my 25th birthday and the release of a project a friend and I had completed. It had a quote in it that went:

Success is… doing what you can do well and doing well whatever you do. —Longfellow

So what is it that you do well? Figuring that out is job one. If you are prepared to forgo your old ways and to use your new time to tackle what you do well, your newly acquired mastery will make this world a better place. I know this type of thing isn’t for everyone, but if you think it may be for you, read my steps below to take action. Don’t worry if you think you can’t afford it right now.

  1. Cancel all subscriptions (cable, mobile phone, magazines, etc) and payments (car, boat, etc) that is not essential to your life. Then add up how much all the essential things cost you each month. This is how much money per month you need to keep moving.
  2. Limit your discretionary spending. This means no restaurants or fast food. You want or need fast food? Ramen noodles, a can of beans or instant rice is fast and perhaps even healthier than fast food.
  3. Calculate how much money you have saved up including how much, if any, severance pay you received. This number divided by your costs in #1 will be how many months you can survive on your own without another job.
  4. Get to work. Being laid-off is not free time, set your alarm and wake up as early as you can to start your day. Figure out a routine that produces your best work and stick to it as many days per week as possible. The key is Work! Your money is running out and you may need to get a job soon, but during this time you are free to follow your routine.
  5. Get a job. If you’re running into your last month of savings, it is probably time to start looking for a job in parallel. One month should be sufficient in this economy if you just need a job to pay for the expensis in #1 while you do your work. Definitely leave yourself more time if you are in a tough industry or if you’d prefer to land a great job that exceeds the expensis in #1.

That is it. Following this formula will teach you a lot about yourself. Here you are at the bottom, with all the cards stacked against you. It’s time to rise up and create your own path to follow. You’ve never been more free or ready to do what it is that you love to do. So do it.

Here’s what my friend and I are doing for ourselves: http://tofuapp.com