The Upside of Layoffs: They Can Lead to New Business Creation
Layoffs are never a good thing, but they do have one positive aspect: They can lead to creation of new businesses -- and new jobs.
New research shows that 15 percent of small businesses were established following a layoff. That's not a huge number, but at least it provides a little hope.
And it's not as if you have to come up with a brilliant and creative new idea to start a successful new business after you've been laid off. The survey conducted by business insurance company Hiscox found that the majority of start are not original ideas, but are based on new approaches to existing businesses.
The research also revealed that most small business owners are happier once they're on their own payroll. Some interesting facts about their businesses include:
- Being your own boss and living the dream: Half of small business owners cited either being their own boss or living their dream as the reason for taking the risk and starting their own business, with 29 percent wanting to be their own boss and 21 percent wanting to live their dream.
- Not new, just better executed: 80 percent of small business owners and operators surveyed said that their business idea was not new, but an improvement on existing offerings. Just over half reported that offering a higher quality of service or product than their competition was key in setting their business apart -- rather than lower prices -- while 20 percent said that they differentiated themselves by investing time in meeting clients face-to-face.
- Million dollar idea: Nearly a quarter believed they had a "million dollar" idea when founding their business. After taking the leap, more than two-thirds now feel confident or very confident that their business is indeed the "million dollar" idea.
"Starting up can be scary," said Kevin Kerridge, a small business insurance expert from Hiscox. "But if you work harder than the competition, understand your risks and keep believing in your idea, you can succeed,"
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