As we are still traveling back from Indiana, this is a guest post by Dan Holt, a former personal finance blogger who has recently written a book.
The following article contains condensed excerpts from $100K to Nothing – Layoff: My journey from a six figure income to the unemployment line in the worst economy of our time by Dan Holt. You can find out more about the book at www.100ktonothing.com.
I was laid off earlier this year, and like the 14.5 million other unemployed Americans, am having a tough time finding a new job; any job, let alone one that compensates me as well as the one I lost. I’ve read Mrs. Micah’s articles since December 2007, and watched as she grew her income by working part-time in a hospital, a library gig, freelance writing, editing and quilting, and later expanding into freelance blog design. Now, as she has a full-time job, she is cutting back on those side projects to balance her life.
I am at the opposite of the spectrum. I just lost my job, so I need to balance my life by adding a little more work, preferably unrelated to my job search. Since I had entrepreneurial ideas when I was working that I didn’t have the time to fully implement, I immediately thought: should I start a business now that I have the time to devote myself fully to it? Should you? The answer hinges on your thought process.
If you are starting a business that utilizes the skills you have, and which you have researched the market for, then perhaps the answer is yes. If you are starting a business because you can’t find or get a job and you want to make some money (preferably a lot of money,) the answer is definitely not.
A major consideration in your decision-making is money. In fact, money is the major consideration for anything you do in unemployment. Do you have money to cover the start-up costs? Do you have money beyond that to live on for a year or more until the business becomes profitable enough to provide for your family? If you don’t, then get a job and save up that much money and then decide if you want to leave your job for the world of the self-employed.
Even when I was working, I wanted to be an entrepreneur. That desire has increased exponentially since the corporate world decided to eliminate my job to boost quarterly profits. I am pursuing some business ideas I have, and I’m exploring others. But, I have not stopped searching for a job. One reason is that I don’t want to lose my unemployment check. A more important reason, the most important, is that I have saved up enough of an emergency fund to survive unemployment, but not enough to cover my household expenses for enough time to bring a business to significant profitability.
I provide, or used to, the sole income for a family of four, and I am not ready to bet their future on a business yet. I either need a better business idea, or I need to get a job and save up enough money to start my business and devote myself to growing it without having to worry about it providing enough income to feed my wife and sons.
What would you do?
If you’re interested in reading the full book, you can find it on Amazon or check out your local library.
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Fortunately, I already have my own business. I work from home as a freelance writer! I think that it is easier to start a business when you have a skill that allows you to provide services to others with relatively low overhead to yourself.
Miranda’s last blog post: What to do When Your Minimum is Raised
Great post, Dan! Good point, too, Miranda. It’s definitely “safer” to start a side business while you’re “working for the man” (or woman, as the case may be), and then build it over time, pulling the trigger when you’re ready to quit your day job. It’s difficult to do well, though, because there are only 24 hours in the day.
But it’s certainly possible. We can all deal with an impossible schedule for a year while building up our side businesses.
Bill’s last blog post: Wealth-Building Wednesday — June 30, 2009
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