If you want to start a business after redundancy, assess how much money and time you have to launch one. Look into external funding, too.
After that, establish what skills you have and the gaps in the market.
Now it’s time to do market research, establish your target audience, decide on a structure and write a business plan.
Whether you see it coming or not, redundancy still stings. It puts a real dampener on your confidence and your perceived value.
For some who are made redundant, it’s straight to the jobs board to find their next role. For others it’s an opportunity to consider that business you’ve been thinking of starting. If you’re in the latter camp, read on.
Where to start
First, find out where you stand financially. Ideally, you’ll have some savings behind you, especially if you were with your employer for less than two years. For those that with their company for more than two years, you’re entitled to redundancy pay. Find out what you’re owed by reading Redundancy pay – a Small Business guide.
Next, think about the aforementioned savings and how much you could channel into your new business venture. Of course, explore what external financing options are available, be that:
Friends and family
Bank loan
Alternative finance
Business grant
It’s even worth combining these for your short- and long-term business goals.
Looking for finance? SmallBusiness.co.uk is working in partnership with trusted lenders to find the best business funding deals. Find out more here.
You’ll be balancing your precious time as well as your finances. Look beyond your monetary capacity towards other commitments, such as your partner, children, community or caring responsibilities. Think about how much time you can realistically devote to your business.
Redundancy is a vulnerable place to be. Ensure you know what resources are available to you post-job-loss, such as financial support, career counselling and an outplacement service.
What can you offer?
You then need to consider what you can offer potential customers, and this is where your skills and qualifications come into play. Your scope needn’t be restricted to skills you’ve developed in the workplace. It could be multitasking as a parent or staying a step ahead of your opponent while playing chess.
Look at your transferable skills in these areas:
Digital skills – AI, coding, analytics, SEO
‘Hard skills’ such as qualifications and languages
‘Soft skills’ such as communication, confidence and enthusiasm
A mix of hard and soft skills is a winning combo here.
Spotting opportunities
Throughout your career, you might have noticed gaps within your industry. Basing your ideas on this, work through all of the possible ideas you have for your potential business. Think about other ways to do common daily tasks or make them easier to access (in terms of availability and/or price). For example, does anybody else in your area offer sport physiotherapy?
Get a better idea of what people want by doing some market research. These days it’s really easy. Create an online survey using a platform such as Microsoft or SurveyMonkey. If you can get permission from the admin, putting it on a relevant forum or Facebook group – such as a local community group – will help you to get more focused and thoughtful responses.
Looking at documents and reports will enlighten you on the key issues are happening in your industry. Go to the relevant government site or any related charities in your sector.
If there are any industry events, these are helpful to get your name known in your chosen field. That might be mingling with industry professionals, customers or other business owners. They could even dish out some insider tips to help you better run your business.
Business structure and tax
By now you’ll know whether you want to operate as a sole trader or a limited company.
Make sure you know what your tax obligations will be. This depends on the size and structure of your business, plus what your turnover looks like.
Essential reading
Should I go sole trader, partnership or limited company?
Making Tax Digital (MTD) – HRMC requirements and the best compatible software providers
Making Tax Digital thresholds and timelines for 2026-2028
SWOT analysis and business plan
Next up is the nitty gritty planning stage – a great place to start is your SWOT analysis and business plan.
A SWOT (strengths, weaknesses, opportunities, threats) analysis lets you see the good and the bad within your business along with what your competition is doing. Here are examples for each section.
Strengths: Established career in this field
Weaknesses: No experience of running a business
Opportunities: Possibility of expanding business to neighbouring towns
Threats: Competitors can offer a similar service at a more affordable cost online
A business plan will provide the key to how your business is run:
What your business is
Your unique selling point
Your target customer base
Financial forecasts (profit and loss, cashflow)
Documents (credit history information, market research results, receipts and bank statements)
They’re especially useful if you ever apply for funding – it gives your lenders a clearer idea of where your business is going.
Check out these example business plans.
The checklist for self-employment after redundancy
Take these tips from Cobweb Information.
1. Understand what you can offer to potential customers. Look at all your skills and break them down on the basis of data, people, things and ideas.
2. Analyse these skills and see which ones you would most like to use. Self-employment can be pretty demanding (and demoralising at times), and it helps if you are doing something you really enjoy.
3. Check your finances and seek outside advice and financing opportunities.
4. Consider who might use the sort of skills you have developed at work, and if they are still in demand with existing organisations. Consider using skills built up over years with hobbies or interests. But again, check the requirements of the business.
5. Are your skills and expertise future-proof? Organisations may well be prepared to use self-employed consultants instead of taking on employees. If you choose the consultancy route, be prepared to develop your own range of new scenarios. You are the expert, and a harassed manager might welcome a soundly based proposal that solves a pressing problem.
6. Research your market and pinpoint who your target audience is.
7. Decide on your business structure and write your business plan.
Case study: Steve Fanning
For a greater insight into what redundancy is like, Small Business spoke to Steve Fanning. He was made redundant from Barclays in early 2026, after 24 years with the company. Since then, he’s launched three ventures – which are all interlinked – while finding a new role and supporting his family.
The first is a boutique research company focussed on employees; the second a redundancy podcast called The Now What?; and the third is a website called The Invisible Queue, which Fanning hopes will become an outplacement site.
Slow progress
Sadly, it’s the research company that has made the least traction so far, despite it being in line with Fanning’s skill set. “We [he and his business partner] started setting it up then hit minor snags. We had to invest in it heavily to get progression” he said. “In comparison to other businesses, it’s probably a lower cost of start-up, but we still had to look at the financial impact of that.”
Networking
Redundancy is lonely, so it’s all the more valuable to have the right people to connect with. “The most value-add for me were the sessions where I got to interact with other people who were on the same journey,” said Fanning.
The Invisible Queue connection to The Now What? podcast came about when he started to publicise on LinkedIn. “There was someone who added a comment and I got chatting with them and then they put me in touch with someone else. It’s the networking that’s really shone through. Since being made redundant, I’m all over LinkedIn,” he said.
Common slip-ups
Fair warning: LinkedIn can be as deflating as it is motivational. Try not to get sucked into the comparison trap. “There is a particular behaviour on LinkedIn around sharing success, which is fantastic. However, it’s very easy to look at someone’s ‘I-saw-a-gap-in-the-market-and-I-identified-that-I’m-going-to-fill-that-gap-and-I’ve-done-it-and-it’s-now-really-fantastic’ and start comparing yourself when you’re already feeling low,” he said. “Folk that I’ve spoken to have come down with that feeling of, ‘Well, if that person had that vision, saw that gap and did it, and they made a success, I should be doing that as well.’”
The most successful redundancy businesses that he’s seen are the ones who had the idea and started building it up before they lost their job.
“The main challenges for businesses are the more logistical ones,” he added. “If I’m purchasing stock to sell on, where am I going to store the stock? Then realising that the insurance that they had didn’t cover them, so they had to get a different type of insurance. The ones didn’t go much further, were the ones scatter-gunning their approach.”
He recalled one example of someone he spoke to trying to develop an agentic AI position. “They had an idea for a solution, but they hadn’t verified that there was a need in place to actually sell to,” said Fanning.
Top tips
What about the other people in the same position – what should they be focusing on during their spell of redundancy?
“Always to be kind to yourself,” said Fanning, acknowledging that the most frequent data point for those who have been made redundant is rejection. “Redundancy starts to eat away at your confidence and your skill set. I had to keep having that conversation myself: ‘My skill set hasn’t diminished and I still have market value’.”
As for managing three business concepts, alongside job applications, how does he balances it all?
“Lists. Lots and lots of lists. I do the whole fractional thing where I will give myself:
A day over the course of a week is to create the next podcast episode
A day of the week to work on the research side of things
A day of the week for Invisible Queue
Everything else fits in around the side whilst also juggling children and life and everything else.”
Finally, as we’ve been banging on about throughout this article, do your market research and know who your customer is.
“If that part isn’t in place, then as soon as you start pulling the thread on the set-up, it all starts to unravel. There absolutely has to be a need and a demographic of a person who would want the solution that you’re providing, whether it’s a product or a service or a process.”
