Starting a business after a period of unemployment can seem intimidating at first. However, this venture can pay off greatly when done right. It’s not uncommon for individuals in the UK and Europe to start their own business following a period of unemployment. Such situations teach them how to utilize their skills and channel them towards productive ventures.
Let’s examine the steps involved with starting a business after unemployment.
Set Your Goals
If you aren’t actively seeking work during unemployment, you will likely have plenty of time to come up with a business idea. The first step in this process is to set definable goals. These goals should be specific, such as setting a particular revenue target for your first year. Vague goals can be more difficult to achieve. They are also less likely to keep you motivated.
It may also help to differentiate between long term goals and short-term goals. In fact, many long-term goals can be broken down into several short-term goals. For example, you can set a goal of earning €200,000 over the next five years. You can then break this down into multiple short-term goals of earning €40,000 per year.
Create a Business Plan
The next step is to create a business plan. A great business plan should discuss who you are as well as describe your business. This is vital, as this plan will be important when you are seeking funding or a new partner for your business.
Start by creating an executive summary that describes who your target audience is, what the current problem is, and how your products or services provide a solution to the aforementioned problem.
You can then include a company description with a mission statement as well as a brief overview of your background. This section can include information about your employment history and the skills that make you well-suited to run a business.
Some business owners may also describe their activities during their unemployment period in their business plan. This serves as a great opportunity to talk about the things that inspired you to start your own business.
Get Funding
Some entrepreneurs may choose to fund their new business idea themselves. However, this can be tricky to do when you have limited resources due to unemployment. A better strategy is to seek funding from elsewhere.
Many banks in the UK and Europe offer loans for unemployed individuals who have good credit histories. Some countries also have special institutions that provide business funding for unemployed individuals. For example, unemployed individuals in Ireland can get support for their business under the Back to Work Enterprise Allowance (BTWEA) and the Short-Term Enterprise Allowance (STEA). These schemes offer grants for market research, training, and loans for purchasing equipment.
Prospective business owners and entrepreneurs can also seek out funding from investors. You can try pitching your business plan to angel investors. These are high net worth individuals who possess the resources to help you get your business off the ground. However, securing funding from these individuals requires a great business plan that makes you and your business sound size a viable investment.
Register Your Business and Obtain Licenses
The next step is to register your business with the appropriate governing body. If you intend to start your business inside the UK, you will need to register it with the Companies House within one month of starting it.
If you intend to start a business in Germany, you will need to register as a tradesman or a freelancer. You may also need to obtain a specific trade license before submitting your registration with the local tax office.
You may also need to secure a minimum level of capital before registration, depending on the country your business will be in. For example, business owners in Denmark must have a minimum capital investment of DKK 40,000 when registering their business.
Select an Outlet and Hire Employees
The next step is to select a location for your business. This location will depend on many factors such as rent, population density, availability of utilities, as well space requirements. Prospective business owners should ensure their proposed business location aligns with their goals and offers them room to grow and expand.
You can then start hiring employees for your business. Some start-ups use recruitment firms to source employees for their operations. This strategy is especially useful if you do not already have HR staff or are unfamiliar with the employee selection and hiring process.
Market Your Business
Marketing is vital in the early stages of any business. You can promote your business online using Google ads or business pages on social media. Similarly, you can use influencers to help spread the word about your business. You should note that marketing strategies can be expensive, so it is vital to plan out a proper strategy instead of spending money endlessly on promotion.
Final Thoughts
Starting a business after a period of unemployment comes with many hurdles and challenges. However, these can be overcome with the right planning and implementation. Prospective business owners and entrepreneurs can seek assistance with the business setup process by reaching out to Open a European Company.
At Open a European Company, we have assisted numerous clients in the UK and Europe with opening their own businesses. Our specialists are familiar with the various business laws and regulations across Europe and can help you each step of the way. Please contact us to learn more about our European company formation services.