Giving up on regular employment and turning to self-employment has been a growing trend, accelerated by the Covid pandemic.
The generation before the 'Boomers' lived in the era of the Great Depression and WWII; the men probably had only two jobs in their working lives: the generation before them perhaps only one. A university degree would have been rare. A Boomer may have had as many as eight jobs, and maybe 2% have a degree. In Britain, the Gen Y or Millennial generation had the government aspiration where 50% should aim for a degree level qualification and are probably already into their fourth or fifth job. Over just a few generations, the number of employers a British male has worked for has progressively grown. The taboo of 'not holding down a job for life' has gone.
For a Boomer in their early career, ongoing professional development was expected, with courses paid for by the employer. The implied contract of supporting that continuous professional development has been breaking down. In part this may be because the employers no longer had the budget to do so.
These two trends have now collided with the Covid-19 pandemic. In February 2021, the number of people furloughed peaked at 4.7 million: that is in the context of a total UK population of about 66 million. According to an ONS report 21% of the working age population had 'depressive symptoms'. Companies House records show that in 2020-Q3 new company registrations peaked at 221,000. The average was about 146,000 per quarter in the previous decade: new registrations have continued at over 200,000 per quarter since.
The big shift in British 'employment' is already underway. Sadly, most of these new companies are liable to fail to survive long enough to report their second annual accounts. In the decade to 2019, dissolutions averaged about 101,000 per quarter. In 2020-Q4 & 2021-Q1 the average was 166,000.
My advice for people considering their own personal Big Shift, resigning, and setting up their own business, is:
- Prepare: spend time contacting 'weak connections'. Do not say anything about your intentions yet: just say hello, with perhaps some topical personal news like "I've just had my second covid vaccination." Somebody from my distant past, who I had regained contact with through LinkedIn, asked me to do some work for their client. It may be a short engagement, but paying all the same.
- Prepare: think through your legal status options; sole trader, partnership with peers, limited company. What are the implications of each? I approached two banks where I had long term personal accounts, in good standing, to open a limited company business account. Both refused on the basis there was more than one shareholder. The third bank I approached did not find that a problem.
- Prepare: think about what you want to do, but be open to alternatives. Be ready to 'pivot' to a slightly different position. I pivoted repeatedly during lockdown, and neither engagement I have now is what I set out to do.
- Prepare: have your finances so your new enterprise can survive for a year without any paying engagements. Expect to waste money; expect other people to gladly take your money and deliver little or nothing in return. At the end of the first year of trading my own little limited company was £11,000 in debt. Since then, that Director's Loan has been repaid and I need to pay some Corporation Tax on the second years' trading.
- Prepare: who are your prospects? Where can you find them?
- Prepare: who can be a support network for you? Who will listen to your suggestions and not be afraid to ask penetrating questions? You will need three people like this, not your partner, family nor friends. Who can you meet just to get out of the house? Are there groups of other solopreneurs that meet up: a ready-made network for you? I was actively involved in three, with two others as 'weak connections'. One has already restarted, Walk while you Work on your Business: I am so looking forward to the others starting again soon.
- Prepare: keep your mind ticking over. Use the dog days of summer to write 700-word articles on LinkedIn.
- Prepare: in the current circumstances, be ready for a launch whatever you are planning in September. The English lockdown has just been extended to 19 July, with Wales and Scotland expected to follow suit. Then we are into the school summer holidays and factories closing for a two-week maintenance period. If not September, try to focus on a specific target date.
- Be ready for people to like your idea, but for there to be an embargo on any in-person business contact outside their company even after government restrictions are lifted.
- Be ready for black swans and grey rhinos. My marketing plan in 2019 was to gradually build up a reputation by giving free presentations at an event organised by somebody else. Overall, that was working well: I'll admit to one disaster. I intended building up to organising events myself, drawing in peers to support each other and make a more viable proposition to prospective clients. In March 2020, the shutters came down on that, with a booked presentation cancelled. I'm just starting to get back to marketing, with a full day event in September 2021,on Business Continuity.
- Black Swan: a catastophic low probability event that could not be predicted.
- Boomer: The generation generally defined as people born from 1946 to 1964, during the post–World War II baby boom.
- Companies House: the registry of limited companies in England and Wales.
- Grey Rhino: a danger that’s initially slow moving, obvious, and yet is ignored as it charges.
- ONS: The Office for National Statistics, which reports directly to the UK Parliament.
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