During the mortgage crisis of 2008, I was laid off from my job in investment banking. This was the second time in my investment banking career that I had been laid off – the first had been a few years after I graduated from college when the technology bubble burst.
After the second time, I knew I didn’t want to continue to weather the storm of financial market booms and busts. I was also tired of having someone else determine the fate of my job. So, I created my own job as a freelance consultant.
Since we’re in a period when many companies are looking at their annual budgets, re-assessing the size of their workforce and announcing layoffs, I thought I’d share what I learned about getting started as a freelancer after being laid off.
Assess Your Finances
Assessing your financial picture after being laid off can be difficult, but it is critical to keeping your stress in check. Take a look at your household’s monthly spending in the context of any severance package and unemployment benefits, and determine where you can cut back on expenses. This will help you identify how long you have to test out being a freelancer before you have to resort to finding another employer.
For me, this is the first time I had really sat down and created a budget for myself since college. I always had a sense for where my bank account stood, but now I needed to be more diligent. I noticed that I spent a lot of money on dining out because I didn’t have much time on my hands as an investment banker. Since I had more time, I could reduce my expenses by cooking for myself again.
Take Care of Yourself
Whether you liked your job or not, being laid off is a major life transition and can leave you feeling uncertain about yourself. It’s important to take care of yourself, otherwise you may not be able to step into your next opportunity. You have some time right now to clean the slate. If you have the means, take some time off and go away. Don’t worry if you can’t afford to do that because there are other inexpensive ways to take care of yourself – get some sleep, eat healthy, exercise, and reconnect or take on some new hobby, artistic endeavor, or volunteer work that inspires you.
Since my hours in investment banking were long, I took advantage of getting more sleep and eating healthier. The extra time also gave me a chance to explore yoga and meditation through free classes, which sparked a regular practice that I carried into my new lifestyle as a freelancer.
Recognize That You Have Marketable Skills
Just because you got laid off doesn’t mean you lack skills. Most layoffs are not about you, but about the employer – the economic situation may be grim, the company you worked for might not be doing well or the decision was made that your position wasn’t needed anymore. I recommend you take a step back and look at your work, education and other experiences. Create an inventory of your knowledge, talents and skills, and assess what you are interested in sharing as a freelancer.
One thing I did was reread the employee evaluation forms from my former employers to see what people said about my work. I saw some patterns in what former bosses and colleagues said I was good at doing. Then, I asked myself if I enjoyed doing that work and what I liked or didn’t like about it. I found out that I actually liked some of the work I was good at in investment banking, such as helping companies assess their strategy and analyze financial implications.
Determine Who You Want to Work With
After you’ve determined what kind of work you want to do, think about who you want to work with. Perhaps it’s not the type of people or organizations you worked with at your previous job, but other types of people or organizations that could really use the knowledge and skills that you’ve developed over the years.
Even though I liked the technical aspects of the work I did, I didn’t find the clients that we work with to be fulfilling. I had a lingering desire to work with clients that had a social justice impact. Education was at the top of my list – I felt it was my education (and of course my family) that laid the foundation for my success. I wasn’t qualified to become a teacher then, but I could support educational organizations in a different way, by using my knowledge and skills in strategic planning and finance to help them get started and become sustainable.
Admittedly, when I started freelancing, I didn’t know anything about organizing materials to market to and follow-up with potential clients. I thought all I had to do was update my resume and LinkedIn profile. Despite previous business experience, I didn’t think through the scenarios where potential clients would ask for sample work, my pricing, a project proposal, my standard contract or a W-9. I also didn’t think through the process for bringing on board a new client, including how much back and forth that might take.
I ended up stumbling through it okay. In hindsight, I would have been more professional and efficient if I had established a process and organized all these materials before I started approaching potential clients. It might have saved me a client or two who questioned my ability to make the transition from a corporate employee to a freelancer. So, I recommend that you spend some time learning about and organizing your processes, pricing, contracts and taxes as a freelancer – talk to your freelancer friends, read up on the Internet, or take a class like our Freelancer Accelerator.
Spread the Word
There is no shame in being laid off! Don’t be afraid to tell your family, friends and former colleagues that you were recently laid off and are now looking to deploy your skills as a freelancer. They can be a great source of support and connections as you get started.
I began by looking through my contacts in LinkedIn and creating a list of people who I thought might be willing to offer advice and connections. Each day, I sent out a handful of emails letting them know that I was recently laid off and looking for my next opportunity, and asking if they would be interested in catching up over a cup of coffee or by phone. I felt very supported by family, friends and former colleagues. Within a month, I landed my first freelancing client with an education startup through a connection from a former colleague.
For me, getting laid off opened up a whole new world of opportunity. It gave me the freedom to be my own boss and create the lifestyle I want. If you were recently laid off, consider it as an opportunity to explore your freedom and passions, and whether or not you’d like to move in a new direction and be your own boss.