Redundancy to Ownership : Employee to Employer

The UK economy is in no mood to advertise its imminent direction and if you put a group ‘experts’ into one room, they'd be certain only of their uncertainty. What we can (probably) predict is that the forthcoming cull of public sector jobs and with that, the knock-on effect into private sector employment, will confront a large swath of the population with unprepared change and uncertain income.

So what’s the next step after redundancy? You could stash your redundancy cheque into a zero interest savings account, celebrate escape from your line manager’s symphonic flatulence and put your feet up to watch daytime TV. The redundancy package might fund a trip to the dandenongs or part ownership of Liverpool FC however, an alternative route is to become your own boss.

If the thought of becoming your own boss appeals then where do you start? You might think that now is the right time to launch that ‘great idea’ you've been boring on about for 5 years but, unless you’re a genius who’s invented the cure for Piers Morgan, starting a business from scratch is extremely challenging. It could be a case of frying pan into fire.

A much safer bet is to buy an existing business that provides you with an established product or service, a trading legacy, established customers and supply chain, incumbent employees and perhaps a reputation for great Christmas parties. OK, Christmas party is not crucial in the decision making criteria but time vs. risk will be and the established business allows you to leapfrog some of the high risk challenges inherent with start ups ie most fail.

You’ll need to invest some of your own money as a finance down payment signal of commitment to other stakeholders, however in the event there is a price or funding gap then various mechanisms can help make the deal less reliant on cash or lending (both difficult to find). For example, you might have a vision for the selling business that enthuses the vendor enough from them to retain a stake and help reduce your initial outlay and risk. If you prove your ability to deliver and transform – by bringing your own contacts, expertise or experience - then vendors are often prepared to negotiate on the basis of a retained stake. In the current climate there are numerous well valued opportunities and whilst you need to be realistic about the type and size of your target business, don’t limit your search by what you think might or might not be required financially. Understand your market place, speak to experts and gauge what might be possible.

“today is the first day of the rest of your life” so, grasp the nettle of redundancy and take the sting out of that process by thinking about business ownership. The current market has lots of opportunity and value available so consider taking that first step towards becoming your own boss.