How Layoffs Can Inspire Entrepreneurship


After being laid off more than once in your lifetime, you know it’s coming: The closed door meetings…the awkward glances and chit-chat from higher-ups… the silence… the tap on the shoulder…

“Could I see you for a moment?”

You walk into the room, and the door shuts behind you.

“We’re going to have to let you go.”

You sign off on the final check tallies. You pass by the sad disappointed faces as you partake in the walk of shame to your cubicle. You pick up the white box and collect your magnets, photographs, flower pens and heart-shaped sticky notes. As you make your way to the automatic sliding glass doors, you calculate in your head if you can make it until that first unemployment check comes. You wonder what you will tell your family and friends.

For most jobseekers, the usual protocol is to make a job search an 8-to-5 occupation. But what if there is something more you want out of your life and career than just another job? What if you are a creative person who wants to put your ideas to good use to make a living and make a difference in the lives of others? What if you are a hardworking person with leadership skills who just hasn’t had the chance to show the world what you are made of?

In this case, you may see yourself leaning towards taking the entrepreneurial leap.

It’s not easy running a company and this is by no means a guide on how to startup a business, nor will I detail the potential pitfalls of starting a business (for that you should check out a previous post on the Caypen website 3 Reasons Why You Shouldn’t Start a Company). But here are some reasons why being laid off may just help in your future career as an entrepreneur:

1. Company Culture

The #1 direct impact to a company after layoffs (other than the loss of talent) is the company culture. Whether you experienced a layoff and/or witnessed layoffs, you might have a good sense of how the company culture can affect the company during hardtimes and vice versa.  Was it top talent that was laid off first to save money? Were there other ways the company could cut down on costs? Did you notice a fracture between management and employees based on lack of structure and guidelines? Was a fraternity-type setting killing the productivity and motivation of the people around you? Were employees hired because they were friends of management? Were there ways the company could have taken their time to learn new technologies for improved organizational efficiency?

These are just some of the questions an aspiring entrepreneur can ask themselves so they can learn from their experiences. In the end, the cultural glue of the company is just as important as returns and profit. This is something many entrepreneurs who don’t have your kind of experience will learn MUCH later down the line or, perhaps (sadly) never.

2. Financial & Personal Management

Again, it’s not easy running your own company. However, bad economic forecasts and financial setbacks can hit you like a freight a train. Depending on the actual reasonings behind layoffs, using your experience at a company during hard times can be helpful for when you find yourself in a similiar situation. People make mistakes, but oftentimes personal issues of a founder/CEO can significantly impact the budgeting of a small business. Look back on your experiences and think about the type of entrepreneur YOU want to be.  Always strive to be better. The best entrepreneurs are constantly working everyday to improve their role as a founder and for their company, even when things are going swimmingly. The best bosses I’ve had take responsibility and treated everyday like its the first day of their company. Remember: As a founder/entrepreneur, there will never be a moment where everything is going fine without your hard work going into it because it is YOUR dream and YOUR sole responsibility to keep it going. Once you think things are 100% set in place, that’s when something will sneak up. Be prepared. Never stop being an active participant in your own organization.

3. Solutions

What do entrepreneurs do? They come up with solutions for consumers using products and the marketplace. After you’re laid off at a company, you now may have the keen sense of recognizing telltale signs of a financial or organizational disaster. Since you know the problems, you can start coming up with solutions. As an employee who has been laid off, you might remember when things were going pretty good at your company: there might have been period of time of overwhelming optimism but with the inevitable crash down after that period was spent with lavish cocktail parties, raffle prize giveaways, company vacations, incentive perks and catered lunches. But did you notice at some point, it gave way to awkward potlucks, fiscal quarter jitters and lunch break gossip? As mentioned above, company culture is an important aspect of any business, but there is a time to celebrate in moderation and a time to go all-out. Think back to when things were going good at the company you worked for: what were the reasons and how did your team contribute to the overall success? And how did things come apart, if that’s what happened at all? How would you celebrate success and still encourage improvement within your company structure? Is there anything you would do differently?

Most importantly, it’s useful to do your research on what experts have to say about your specific experiences. Perhaps many of your insights are simple human error, or some of them may be organizational problems that can be fixed from the get-go of starting your own company. If you choose to be founder and CEO of your business, it never hurts to ask those who have been there and can share their experiences with you.


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