REDUNDANCY TO RICHES
Posted 14 Jun 2012
How a growing band of entrepreneurs have used getting the push as a springboard to business and financial success
The shock of redundancy comes a close third behind bereavement and divorce as one of life’s major traumatic experiences, and when it happens - as it does to two people in the UK every minute - it’s hard to see how it can possibly have a happy ending.
Certainly David Bailey was pretty shattered the day he was pushed out of the company he had founded and once owned, after working there for 23 years. “I got the letter on my 50th birthday,” he remembers. “It came completely out of the blue and was enough to kill somebody.
“Emotionally I was angry for a long while, but you’ve got to look forward. If you’re going to focus your energy, you might as well focus on something you have control over - something you can do for yourself.”
It was a wise decision. Today, David is among the growing band of entrepreneurs who have used getting the push as a springboard to business and financial success, and are now well on the way from redundancy to riches.
With his wife Patti, David started Motormouse, a company that makes computer mice in the shape of iconic cars and other wireless products, which got a dramatic boost when the Baileys took the idea into the Dragons’ Den and came out with a £120,000 pound investment from James Caan.
Since then the Baileys have never looked back. Soon Motormouse was selling over 150,000 computer mice in more than 60 countries. The range includes exact replicas of classic cars like Minis, BMWs and Porsches. “We’re aiming at car lovers, gadget freaks and people who will never actually own a Porsche, but would like to,” is how David puts it.
“The belief that you deserve better than the way you have been treated and which hardens into a powerful ‘I’ll show them’ mentality is the most effective motivation in people who succeed in their own businesses after being laid off,” says Bristol redundancy counsellor Penelope Stephens.
A recent study by specialist business insurer Hiscox shows that over 20 per cent of new small businesses are currently being started by redundancy victims who believe they can provide a better service than the employers that laid them off. They planned to succeed by improving on existing ideas, offering higher quality rather than just lower prices and establishing better personal relationships with customers.
Interestingly, the more redundancy victims get involved in a new venture, the more their confidence rises. Questioned at the start of a project, only 22 per cent thought they had a ‘million dollar idea’, but that figure rose to over 60 per cent once the business had been set up.
“Our research shows entrepreneurs are starting businesses to take control of their future, whether they have experienced redundancy or just want to pursue their dreams,” says Hiscox’s Alan Thomas. “They don’t always need to reinvent the wheel, but offer a fresh perspective on an existing idea - it’s often about hard graft and differentiating yourself from the competition.”
For instance, Sue Acton worked for a high street bank for 11 years when she was suddenly made redundant and realised she had finally got the chance to start the business she had been dreaming of - a fairtrade soap company.
Sue says: “I thought: ‘What’s the worst that can happen?’. I could lose my house. But I could cope with renting again and looking for another job. I realised that, yes, I could do it. And which is worse - getting to 40 and regretting it or giving it a try and failing?”
So Bubble and Balm was born. In its first year the company won several awards and became the first 100 per cent fairtrade bodycare business in the UK. Since then, business has boomed.
“Working for yourself, you’ve got to trust your own judgement all the time and you have to work really hard building up a network of people,” Sue says. “On the other hand, you don’t have all the politics of the corporate world and there’s something really satisfying in saying that I run my own business and in creating a product.”
She says the first time she saw Bubble and Balm soaps on the shelves in Waitrose she burst into tears of joy. “It’s hard to describe what a lovely feeling it is,” Sue explains.
After enduring a serious repetitive strain injury for two years, Venka de Rooij was made redundant by a major financial media group and was determined to show that she was still capable of high pressure work.
Venka says: “I knew no one would give me a job in the City, so I started my own business - an online design retailer called Dutch by Design - with the help of a £5,000 loan from the Prince’s Trust. Now things are going really well.
“I don’t think being self-employed is riskier than working for someone else. You can lose a job at any moment, as I know very well. This way you have more power and control and you know where you stand.”
Now she says she would never work for someone again: “I’ve learned so much more than I could have done in any job and met so many interesting people. I love my new life.”
A £3,000 Prince’s Trust loan, a £500 grant and a business mentor have also transformed redundancy victim Rebecca Taylor into a successful businesswoman with her own rapidly expanding company.
After doing research, Rebecca found there was a gap in the market for a hair and eyelash extensions specialist in her area of Yorkshire. The business has grown so rapidly that at only 23 Rebecca now has luxury premises, employs seven staff and is about to launch her own range of branded products.
She’s also in talks with a major retailer to install eyelash and nail bars in its stores. “If I hadn’t been made redundant, I would never have had the incentive to do what I’ve done. It’s absolutely changed my life,” Rebecca says.
Rise and rise
The same can be said about numerous successful businessmen and women, who can trace their rise and rise to the dark days of redundancy. For instance:
- Richelle Shaw went from redundancy after 9/11 to being the only African-American woman to own a US public utility company. She became a multi-millionaire in only five months.
- Corinna Xenakis was made redundant five times in her twenties before starting a social media and coaching services business, which has brought her millions.
- Marie-Claire Carlyle went from being a redundant sales person to delivering a million pounds a month as a company boss. Now she mentors budding millionaires.
- Gill Fielding was one of Channel 4’s Secret Millionaires. Born into a poor family, she’s now a self-made multi-millionaire from investments in business, stocks, land and property.
- Aloe Blacc, a communications consultant made redundant by Ernst & Young, has become a millionaire musician and composer.
- Robert Porter, who was made redundant twice before he was 25, was determined it wouldn’t happen again - and it hasn’t. He now heads a freight and storage network turning over £20 million.
Consultants agree that a determination to succeed after the worry and humiliation of being laid off is a prime motivation for redundancy start-ups. Penelope Stephens cites the case of printing manager John Saunders, made redundant after 27 years with a Southampton company, who went into direct competition with his previous employer in the tourist and airline publicity market.
“Six years later he has not only bought a controlling interest in the firm he had once worked for, but has had the satisfaction of making several of his former bosses redundant,” she says.
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