Don’t Quit; Engineer Your Layoff!

Posted by in Articles, personal finance | 5 comments

Don’t Quit; Engineer Your Layoff!

Years ago, I quit a corporate job to start a hot dog stand. Honestly, I don’t know what I was thinking at the time, but I had been bitten by the entrepreneurial bug and had a chance to be my own boss. The hot dog stand didn’t last long as I soon realized it was much more work than I had originally thought. However, I now know that I didn’t quit my day job properly. Instead, I should have “Engineered my Layoff!

By quitting my job, I gave up any rights to unemployment or severance (which I don’t think I could have qualified for at the time), that would have been beneficial during the “start up” phase of my stand. It may have also increased my chances of success. As many new businesses don’t bring in a profit those first few months, I couldn’t continue grilling dogs on such a paltry income.

Had Sam Dogen’s How to Engineer your Layoff book been around back then, I could have used it to assist me in making a better choice in how I was going to “quit” my job. Being laid off would have secured unemployment benefits for me long enough to launch the stand properly. Instead, I closed it just 6 weeks after starting it and headed back to corporate with my tail between my legs.

If you’re seriously thinking of going off on your own, take these tips to heart:

  • Read Sam’s book, How to Engineer Your Layoff
  • Make sure you have an emergency fund saved up, enough to get you through at least 6-12 months of expenses (or more!)
  • Do your homework before starting a business – make sure you have a potential client base and have a plan on how to market your business and make money!  You don’t need a full-blown business plan, but having a strategy will help you become successful.

I’ve known far too many people who didn’t have these preparations completed and had to “close shop” before giving their business a chance. Don’t be like me, “engineer your layoff!”

What experiences have you had negotiating a severance package or layoff?

5 Comments

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  1. Financial Samurai

    Jennifer,

    You write a perfect example of why quitting is not the best path. For those who want to be entrepreneurs, getting severance can almost be looked as getting seed money, or an Angel Investor on their side!

    It’s so interesting how there are so many books teaching people how to get a good job and climb the corporate ladder. But no books out on getting out.

    Thanks for the highlight!

    Best, Sam

  2. Paula @ Afford Anything

    I would have loved to have gotten laid off from my newspaper job. Unfortunately, we were too small of a staff, and a layoff just wasn’t in the cards. I considered if there was any way that I could get laid off, but finally I came to grips with the fact that I’d just have to quit. :-( Maybe next time!

    • Little House

      @Paula – It definitely depends on the company. When I quit my corporate job, I should have negotiated a layoff (they were large enough) but I wouldn’t have been able to negotiate a severance since I hadn’t been there a year. With smaller companies (less than 20 employees) it would be difficult since you may have more intimate knowledge of their finances and not be able to negotiate anything. With your rental property business, maybe there won’t be a next time! :)

  3. Jackie

    I’ve only had experience negotiating severance once, but it turned out pretty well. I never realized until recently that you can actually negotiate that kind of stuff before you even START a job.

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