Bouncing back from start-up life: why a return to employment is anything but failure
I’m not very fond of the word ‘failure’ – at least, not in the context of business start-ups. Yet the media is constantly peppered with warnings that you are likely to hit trouble when embarking on a new business venture, with more than half of UK businesses failing in their first five years.
There is certainly a lot that can potentially go wrong when you go it alone in business. Yet even if the worst does happen, while the company may have been unsuccessful you will almost certainly have learned a great deal about the business world. Should you decide to return to the workplace, you will be equipped with an array of valuable skills that make you a very attractive proposition to many employers.
Create success from failure
As an example, one of my clients recently had to plan the closure of his business within its first 18 months of trading. Ploughing his efforts into finding new employment, he quickly secured a permanent role at an even higher level than before. My client’s new employer was impressed with his entrepreneurial attitude, and the initiative it had taken for him to head out and start a new business on his own.
Protect your start-up with forethought
Heading up Rickard Luckin’s Small Business Unit, I speak every day with entrepreneurs looking to turn their long-held business dreams into reality, channelling their hopes, their fears and their cash into the new venture.
This is always an exciting and energising time, and with forethought you can certainly help to avoid common start-up pitfalls, such as a lack of competitor research or bad financial planning.
It is also important to remember that starting a business doesn’t have to be a complete ‘all or nothing’ approach. A lot of clients I meet worry about managing the transition between secure employment and running their own business, and I advise them that many people choose to work part-time at the beginning. This means they are able to cover basic living costs…and of course, I also advise them to ensure they have appropriate tax planning in place!
Get the right advice and support
Whatever the plans for your start-up, before they are put into practice it is important that they are properly reviewed and challenged by people with the skills and experience to advise you on their potential success.
As another example, I once met with a client who had plans to open an internet café. They had already chosen their location and signed the lease before coming to see me, which was a shame, as we discovered that four other cafés had previously opened and closed there in quick succession.
When we sat down to look at their basic running costs – something they hadn’t done prior to signing their lease – we found that they needed to sell around 300 cups of coffee every day just to break even. Unfortunately, the café closed within its first year.
Closing a business isn’t as difficult as you may think
If, like these example clients, your business does not progress as you had hoped, the process involved in closing it down is relatively simple. Once the accounts and tax returns have been completed for your trading period, all you need to do is settle your outstanding creditors and then apply for the company to be struck off.
Within two to three months the company will be officially closed, and throughout this period you will be free to search for employment – newly armed with all the experience and insight that being brave enough to go it alone in the business world brings.