By
Ann-Maree Moodie
You've
been retrenched. You're no spring chicken. You're a bit dazed.
What next? Most people like you don't go back to corporate life,
they start their own small business. How? There's a lot of help
out there.
Engineer,
Mark Ganley, was retrenched at the age of 41, from his job as
a general manager for a multinational air-conditioning company.
He had no idea what he would do next.
"It was like
a marriage going bad," Ganley says. "Being retrenched is never
such a total shock as people profess because the signs are always
there. As a general manager I knew there was the possibility that
my position would be made redundant. But no matter how mentally
prepared you try to be, it can be quite disturbing and you find
yourself asking, 'what do you mean you no longer need my services?'."
As a senior employee, Ganley was offered outplacement services.
This gave him access to expert advice to help him explore options
for his future, including starting a small business.
"I had been
working 50-60 hours a week and I could have taken a holiday -
after all, it was probably the last chance I'd get to have an
extended break," he says. "But instead I viewed outplacement as
a job. I had an office to go to, something to do, and people to
talk to. It was much better than trying to find another position
from my dining room table."
Ganley was
offered several new jobs, two of which were more highly remunerated
that his previous position. But something wasn't right. "The jobs
were almost exactly the same as what I had just left, although
they were better compensated," he says. "I just couldn't get excited
about it." The idea of starting his own business became increasingly
attractive. "I thought that if I was going to do something like
this, now was the time when I was in my early 40s, rather than
wait another 10 years."
Two years
on, Ganley is co-partner in a thriving manufacturing business
that supplies components for manufacturers of new cars, mobile
telephones and appliances. Cubic Pacific employs 20 staff and
is enjoying a positive cashflow.
So, life
after retrenchment for Mark Ganley is rosy, but is small business
necessarily the best option for people who find their job has
been made redundant?
The
SME Way
Regular surveys of its clients by outplacement firm, Right Management
Consultants (RMC), show that 15-20% of retrenched workers who
go through outplacement services decide against returning to corporate
life and instead pursue a career in small business. The surveys
consistently find that the older you are, the more likely it is
that you will start or buy a business following retrenchment.
The biggest group who decide on this route are 55 and over, the
second largest group is 45-55 years.
"The first thing our clients do is career evaluation in order
to work out what they would like to do with their career over
the next three to five years and that usually encompasses two
jobs," says Nick Plummer of RMC. "In order to do that, you look
at the candidate's background and determine their key competencies
and work values. We also do some psychological profiling to find
out the psychological needs of the client and of the people around
them. And we look at how they fit work into the rest of their
life.
"At the end
of that exercise, the candidate should be fairly clear of their
target. If it's back to corporate life, it's usually a two-job
process - the job they'd like to have three to five years down
the track and, therefore, the job they need to get now in order
to get there."
Plummer
says the fact that many start their own business rather than returning
to corporate life is not a case of not being able to get another
job. "They are usually pretty clear that this is what they want
to do, sometimes because they've wanted to do it for a long time,
or the driver is that they've had it up to the back teeth with
corporate life and they just don't want to be part of a political
situation anymore. But if that's the only driver it's not usually
a good thing."
New
Fields
The most popular small business option for retrenched workers
is contracting or starting a consulting business. The most recent
survey by RMC of its outplacement clients found that of 218 people
- 188 men, 30 women - who chose to start their own business, 24%
started a consulting business, 24% went into contracting, 37%
started up a new business, 5% purchased an existing business,
4% purchased a franchise and 6% did portfolio work. "Purchasing
an existing business is one of the safest options but a lot of
people don't want to do that because of the capital investment
involved," says Plummer. "But this shouldn't necessarily be the
reason why you'd close off this option. There are quite a lot
of good buys on the market because there are a lot of people reaching
retirement age who want to sell a small business. But when you've
lost a job and you've got some retrenchment money in the bank,
you're loathe to spend it."
Consulting
- starting a business that relates to the skill-base of the individual
- and contracting - using one of the contracting firms or contracting
yourself out to organisations - is clearly the thing people enjoy
doing most. But, be warned. If you're contracting you must not
have more than 80% of your income coming from one client. Otherwise,
you'll attract the attention of the Australian Taxation Office.
"The portfolio
option is for people who have reached that stage in their career,
usually when they're in their late 40s or 50s and 60s, where they
don't want to do just one activity any more," says Plummer. "So
they set up a portfolio of activities, one of which is commonly
their own business."
In order
to ensure that a client understands what they're getting in for,
they can attend a two-day seminar on small business practice,
where they are asked questions such as:
