Life After Entrepreneurship

The self-employed are not eligible for unemployment benefits, but there are some ways to capitalize on those unique skills you've amassed

Q: My husband and I are closing our business after many years, and we will be looking for jobs after the closure. Are we entitled to unemployment benefits, having been self-employed?

—M.P., Long Island, N.Y.

Business owners typically cannot file for unemployment benefits when they close their companies. This is because unemployment benefits are a form of insurance paid for by employers on behalf of their employees. The employers pay unemployment premiums to the state, not to a private insurance company.

"The business owner pays the premium and claims can be filed by employees when they lose their employment due to circumstances beyond their control," says Mark Deo, a small business consultant and blogger. You can get more information from the unemployment insurance page at the New York State Labor Dept.'s Web site.

Work Your Network of Professional Contacts

For business owners who have been self-employed for many years, the transition into the job market can be quite difficult, says Nancy Fox, president of Fox Coaching Associates in Mamaroneck, N.Y. "Depending on your track record and relationships in the marketplace, your value as employees may be lower because people who are hiring worry about you making this transition to working for someone other than yourselves," she notes. Of course, if you know someone who is a decision-maker at the company in question, and that person values your knowledge and expertise, your having been entrepreneurs could work to your advantage, Fox says.

Generally, however, you may do best if you position yourselves as advisers or consultants to companies in the same industry you're leaving. The people you approach may have been your competitors, suppliers, or subcontractors in the past. "Throughout your careers as entrepreneurs, you typically create many valuable business relationships. These should be leveraged in pursuit of another opportunity," Deo says. Work your network of professional contacts as you shut down your company. Let people know you're closing your company, but you and your spouse still possess valuable information and experience.

Leverage Your Particular Skills

"Think about the knowledge, resources, and network that you have gained over the years. Think about what you've learned from the school of hard knocks. Then think about how can you use this to build another business, or to help others in your industry avoid the typical pitfalls that new business owners fall into," Deo says.

If your industry is in a slump, you might market the specific expertise you've gained as entrepreneurs. For instance, if you've acted as chief financial officer in your own business, think about becoming a "rent-a-CFO" consultant for other small businesses needing financial expertise. If you've learned how to create a small business Web site or do IT development, leverage those skills and consult with other entrepreneurs who don't have that knowledge.

"The key is to position yourselves very strategically, come up with a strong value proposition that speaks to the needs of your potential clients, and offer the right bundle of services, packaged attractively," Fox says. "Have some informal meetings with people in your industry and ask what challenges they are experiencing. You can then position yourselves to solve those challenges."

Before it's here, it's on the Bloomberg Terminal.