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From laid off to you’re the boss

Many agencies got started when their owners were laid off from their full-time jobs.

Rather than looking for a new full-time gig, it can be tempting to grab some freelance contracts and see if you can make it out on your own.

It’s not a bad idea — especially if you have some severance and access to COBRA health insurance (here in the U.S.).

But is it really a good idea? Can you take freelance work and look for a new job at the same time? How do you test the waters without challenging your own reputation?

Key takeaways

  • Chip Griffin: “Don’t go into this with the idea that it’s all sunshine and roses. There’s a lot that comes along with it, like consistently looking for new business. You need to be honest with yourself about if this is something that you want to take on.”
  • Gini Dietrich: “You have the obligation of fulfilling the contract work that you created with the clients while you were freelancing. You need to be thinking about that.”
  • Chip Griffin: “If you’ve ever thought about having your own business, being a freelancer, running an agency, it’s as good a time as any. Because you’re not having to give up something safe. You don’t have something safe right now.”
  • Gini Dietrich: “Nothing’s permanent. You can always evolve or change or do something completely different. Just go with the flow a little bit.”

The following is a computer-generated transcript. Please listen to the audio to confirm accuracy.

Chip Griffin: Hello, and welcome to another episode of the Agency Leadership Podcast. I’m Chip Griffin.

Gini Dietrich: And I’m Gini Dietrich with a house full of children.

Chip Griffin: And that’s enough of an intro today. So we’ll get started with the show right after this.

Ah, summertime, isn’t it great.

Gini Dietrich: The best part is, you know, the three weeks between when camp ends and school begins, that’s the best time.

Chip Griffin: Fortunately, my kids are older, so not much of an issue there. In fact often times they’re not even awake by the time we record this.

Gini Dietrich: Yeah. They’re not even up yet.

Chip Griffin: And, and the last thing they wanna do is come running through my office now. So.

Gini Dietrich: I’m sure they’ll be back. So we’ll get to hear from them again.

Chip Griffin: Well, in the meantime, we probably ought to dive in with the content so we have some kind of a chance to record something this week. Right. I guess that’s why we do this show. So people have something to listen to, right.

Gini Dietrich: And it’s not… okay. Listening to the elephants run through.

Chip Griffin: Right. But it is a good segue because sometimes we have to deal with the unexpected.

Gini Dietrich: That is true.

Chip Griffin: And we have to figure out how to move forward despite the unexpected. And so one of those unexpected things that can happen to communicators, they can get laid off.

And sometimes when communicators get laid off, they say maybe I should start my own business. And so that’s our topic today. If you’re laid off, should you consider starting your own business instead of looking for a new employer?

Gini Dietrich: I would say yes.

Chip Griffin: I would say it depends.

Gini Dietrich: Fair.

Chip Griffin: In fact, I say that quite often, But I… and this is, look, this is a very common way that agencies get started.

It’s one of the reasons why we talk all the time about accidental agency owners, because a lot of times people just say, Hey, I’m between jobs either because I quit or was laid off or some, you know a life event came up that, that forced that. And so you say, okay, Maybe I’ll take on some clients and all of a sudden you get a second client and a third client, and now you have an agency.

So it is a very common way for them to start. But I think it is worth considering whether that is the best way to start it. And whether, you know, how you should think about it, if you are indeed laid off and, and considering this is an option.

Gini Dietrich: Yeah. And I would say one of the other things to think about is I, I see this happen a lot where people are, are laid off or, you know, they’ve left their, they don’t have a quote unquote job anymore.

And so they do do some freelance work, to sort of bide the time between jobs. But one of the things I see is that they, then they start to, like you said, gain some momentum and have several clients, and maybe you’re working with some contractors or hire an intern. And then the full-time job comes into play and it just all goes away.

And then there’s something else that happens. And then they start to do it again. So I would say that while you’re thinking about this, think about longevity, right? Think about, is this something that you’re doing to fill the, the holes between full-time jobs or is this something that you actually want to pursue.

Chip Griffin: Right. And, I think it’s one of those things where you have to think very carefully about whether you actually want to take on the risk and responsibility that comes with this. Right? So it, it can seem like an easy answer, you know, because you don’t want to go out and, you know, keep peddling your resume and all those kinds of things.

It’s not a fun thing to do. It’s, you know, particularly if you’ve got some experience, you know, it may be a more frustrating process because it often takes a little bit longer to get hired when you’re at mid or senior levels. So it can be very appealing to say, Hey look, you know, I can just pick up a couple of contracts and bide my time and at least figure out what to do.

But if you don’t really want that responsibility, if you don’t want to be out there having to continuously look for business and make no mistake, even if you’re a freelancer, you need to be consistently looking for new business. Yes. Otherwise it will dry up when you least expect or want it to. Correct.

So don’t go into this with the idea that it’s all sunshine and roses. There, there’s a lot of that stuff that comes along with it. We talked about some of that in, I think last week’s episode or the week before I, they all blend together.

Gini Dietrich: Sometime we talked about it.

Chip Griffin: Sometime recently we talked about some of the things you need to think about when you’re going out on your own and some of the concerns that people have, like having to sell, and those kinds of things. But you need to, to really be honest with yourself about if this is something that you want to take on. Because if not, then you may find yourself all of a sudden with a business you have to deal with.

Gini Dietrich: That sounds great. Having to deal with it.

Chip Griffin: Well, I mean, it’s true.

I mean, because you know, how many people do you know who started out as a freelancer who maybe aren’t really happy with it. Right. But they, they’re sitting there saying, Hey, I’ve got this, this quote unquote stability, because I’ve got these contracts. I don’t really love what I’m doing, but you know, it’s the easiest path forward.

The other thing to think about is if you are taking on these contracts. And at the same time you are looking for full-time employment. Be careful because you need to think about the reputational hit you may take, if you agree to take on a project.

Gini Dietrich: That’s right. Yes.

Chip Griffin: And then say, Hey, oh, I just got a job offer.

I gotta bail on you. Yes. Right? Yes. Because if someone’s hiring you to do contract work, they have certain expectations too. And while you do theoretically, have more flexibility than an employment situation, you need to be careful about what it does to your own reputation. If you walk away from a project midstream,

Gini Dietrich: Yeah, I think that’s what I was trying to say is, you know, you have these peaks and valleys where you’re filling in with freelance work in your valley, and then you get a new job and everything goes away.

Like you have to think about those things. And if you do get a full-time job, great. And that’s what you decide you wanna do. Fantastic. But you have the obligation of fulfilling the contract work that you, that you created with the clients while you were freelancing. So I think that’s, that’s exactly right.

You need to be thinking about those kinds of things.

Chip Griffin: And I think in, in some of those cases, it may just pay off to be honest with the people that you’re taking contracts from and just say, Hey, look, you know, I’m gonna work with you on this. And I’ll make sure that, that if I get full-time employment, I will make sure to give you as much runway as possible.

I will try, you know, here’s what I’m willing to commit to. And so you need to be in a position where it’s better not to surprise the person who’s hired you for that contract. And so if you can be open with them, does it mean you might not get the contract? Yeah, of course it does. At the same time

if what you really want is full-time employment. It’s better to share that. And who knows, maybe that – whoever’s contracting with you has an opportunity, or knows about an opportunity. And so it may be beneficial for more people to be aware of what you’re looking for.

Gini Dietrich: Yeah. That’s exactly what I was gonna say is once you’re honest, they may have an opportunity themselves, or they may know of an opportunity, or maybe they’re hiring somebody – you – to help with this work while they find somebody and they go, oh wait, wait, this totally works out.

So, yeah, but just be honest about it. And you know, I always, for the first few years of my business, I used to tell myself, okay. And I had made the decision to go forward. Right. I had made the decision that this is what I was going to do. But I would tell myself it’s okay. If you, if this doesn’t work, if you fail at this, because you can always go back and get a job, you could always do that.

I couldn’t do that now, but back then, I for sure could. And I think that helped me because I knew that there was a backup plan just in case. Right. And because of that, I was, I was, I tended to be more successful because I knew that if I, if I absolutely had to, I could have gone back and gottena big SVP job at a global agency.

I totally could have done that. So I think thinking about it from that perspective too, which is okay, I’ve decided I’m not gonna do this. I’m not gonna go after a full-time job. And I am going to go out on my own, and these are the kinds of things that I’m going to be doing and go back and listen to the podcast episode where we talk about the things you should be thinking about.

But I, I will always know in the back of my head that if something doesn’t work out, I can always pursue a full-time job again.

Chip Griffin: Right. And, and from that perspective, taking contract work can be a good way to test the waters. And see if you actually like it, knowing that you can still back out much more easily at that point.

Gini Dietrich: Sure. Yep.

Chip Griffin: It gives you a chance to see, do I really like this? Do I like having to go through the paperwork of taking on contracts? The, you know, all of the little things that go along as far as, you know, invoicing and chasing payments and all these things that you don’t have to do as an employee. And so if, if you, if you’re able to test those waters, you may be able to figure out if it’s something that you want to do for the longer term. And, and frankly, my point of view is that everybody should be open to conversations about anything at all times, right? So even if you’ve got your own agency and you’ve got employees, if someone comes to you and says, Hey, I want to hire you to be CEO of this business or that business.

Why not at least have the conversation? It may not go anywhere, but have conversations. And, and certainly if you’re a freelancer, you’re in a much better position to have those conversations. So, it doesn’t mean that that anything you choose to do today forecloses opportunities tomorrow.

Gini Dietrich: Yeah. It’s funny you say that because we started this conversation in the Spin Sucks Community and, and someone, I think it was Christine Mortenson who said, and also, nothing is permanent. If you decide that this isn’t what you want to do, that’s okay. If you choose a name right now and decide to change it later, that’s okay, too. Like nothing’s permanent. You can always evolve or change or do something completely different. Like I started my agency as a media relations firm.

We don’t do that anymore. Right. Right. I started my agency as Armand Dietrich and we eventually transitioned to Spin Sucks full time. Like there are lots of things that, that we’ve done over the last 17 years that you, you can do that too. So there it isn’t permanent. You don’t have to say, okay, I’m putting my stake in the ground and this is what, what I’m gonna do.

And this is what it’s gonna be for the next 20 years. That’s not the case at all. You’re going to evolve. You’re going to pivot. You’re going to tweak. There’s lots of things that you’re going to do throughout the, the time of your business. So don’t, don’t get bogged down in that either. Like what should I name it and how should I be an LLC or an S Corp?

Or what kinds of clients should I go after? Just go with the flow a little bit.

Chip Griffin: Right. Yeah. I mean, there are very few decisions that you can make that are irreversible or, or difficult to reverse. The one thing I would flag is don’t take on a partner early on. Figure out what you wanna do first.

Because partnerships are things that can screw things up royally and are very difficult to fix if they go wrong. So, that would be the one caveat to that. And, and I would say it is worth talking to an accountant before you set up your structure because, you can go from LLC to S Corp, but you can’t go the other way around.

Right. So things like that can be beneficial for you to, to make sure that you’re getting proper advice on those. Just so you don’t have a larger problem down the road, but, but even most of those tax things you can deal with just by creating a new entity if you have to, as long as you don’t have a partner.

So not to keep dumping on partnerships.

Gini Dietrich: No, I, totally agree with you. I mean, you know, I think there are some people who say, oh, I wanna go out, go into business with my friend or my former colleague or whatever. And I think that’s a little bit different, but I agree with you, it’s a challenge when you bring other people in, for sure.

Chip Griffin: It’s a huge challenge and I’ve seen, I mean, I’ve had a number of disastrous partnerships come to me to try to help figure out what to do. And most of the time I’m like, yeah, there’s, there’s not really much I can do to help you. I mean, at this point, you just have to get a business divorce.

So your best route is to work with lawyers and figure out how to do that. Yeah. And, then we can figure out where you go from there. But, particularly the worst is 50 50 partnerships. And I think we’ve talked about this on the show before, but you never, ever, ever want a 50 50 partnership. With anybody in any business, because it can lead to stalemate very, very easily.

So you always want to have either an odd number of partners or at least a tiebreaker in place so that someone has, you know, 50.1%, or someone you, you flip a coin in the documents. There’s something has to be there so that you don’t have ties, which just lead to horrific problems with partnership for basically you have a company frozen in time.

You don’t want. Not good.

Gini Dietrich: Yeah. I’m laughing because, uh, we have a client that’s, there’s, there’s four partners and they’re equal partners and they each have 25%. And the decision, well, the lack of decision making is atrocious. They can’t make any decisions because unless there’s a majority that agree.

Right. But if, if they don’t have a majority, if they’re, if it’s tied, they… and it’s just watching it from the outside is woo. I mean, it’s, it’s bad. And you know, they’re a 75 million business trying to do this with 25% equal partners and it’s, it’s not working. And their board is like, yeah, this is not, we gotta figure this out.

Chip Griffin: No, you, you never want a scenario where the shareholders can be tied. It just, it’s very much, it’s bad. And there’s, there’s very little recourse when that doesn’t happen.

Gini Dietrich: Right, right. Right.

Chip Griffin: And, and basically both sides get the short end of the stick. So it’s, it’s not even like one side wins usually in that scenario.

It’s everybody loses. Yeah. So, yeah, so don’t do that. But the, you know, some of the, some of the things that, that have been talked about in the community as far as, you know, starting your business or becoming a freelancer when you’re laid off, one of the, the great points was that you can often use your COBRA insurance here in the US in order to, at at least relieve some of the pressure, because you don’t have to be worried about, you know, where are you gonna get your health insurance from?

Which is quite a challenge for any freelancers, business owners, those kinds of things. The options can be extremely limited. So, by having access to your former employer’s healthcare, even though it’s probably not gonna be cheap, under COBRA, right. At least you’ve got it.

Gini Dietrich: At least you have it. Yep.

Chip Griffin: And it’s, it’s sort of the devil you know, so you, you know, you know what it covers and what it doesn’t. And so that can be a nice bridge and allow you some time to figure out if this is really working or not before you, you know, have to deal with going into the marketplace to get your own insurance and those kinds of things, because that, that can be a real burden for any small business.

So the more time you give yourself to sort that out, mm-hmm, particularly here in the US, that can be very helpful.

Gini Dietrich: Yeah, totally agree with that. And you know, I, I think that was the genesis of this conversation that started in the Spin Sucks Community is I have COBRA for a year. I was laid off, but I have COBRA for a year, what should I do? Should I take advantage right now and see if this is something that I want to pursue longer term.

And I think that’s a good idea. I mean, why not?

Chip Griffin: Yeah. I mean, if you’ve ever thought about having your own business, being a freelancer, running an agency, any of those kinds of things, it’s, it’s as good a time as any. Absolutely. Because you’re not having to give up something safe. You don’t have something safe right now.

Right. So, so you’re already in a risky situation. So why not? You’re not really magnifying the risk, if anything, you’re mitigating it to some degree. And so it gives you that opportunity to, to feel it out and see if this is the path forward for you. And as we said, if you decide it’s not, cool, go a different route.

Gini Dietrich: Right. I always say this too. There’s nothing like being in charge of your own destiny. When you’re in charge of your own destiny, you get to make the decisions that are best for you and your family. There’s something to be said for that. And, you know, I spent a year running a marketing department for a client and the lack of flexibility and not being in charge of the decision making.

I couldn’t even, I wasn’t even in charge of my own calendar. Like that’s just…

Chip Griffin: But I will tell you Gini that’s I mean, you and I agree on that, but there are a lot of people out there who that’s a scary thought for sure. There, there are a lot of people who actually are much more comfortable just saying, okay, I’m gonna show up at nine.

I’m gonna leave at five. You tell me what I gotta do in that window. That’s fair. And, and I’m gonna stop thinking about it afterwards. So that’s totally fair. And, and so this is an opportunity if you’ve, if you thought about, you know, maybe running your own thing to figure out is your personality suited to it? Do you really want to take on that? Because controlling your own destiny is great. The flip side is you control your own destiny.

Gini Dietrich: Right, right.

Chip Griffin: And, and there’s not necessarily that same support structure that you have when you’re an employee. That’s fair. That just makes sure your paycheck comes every two weeks.

Gini Dietrich: Yeah. But you also, I would say the pros outweigh the cons, but you’re right. There are not, not for everyone, not for everyone.

Chip Griffin: Exactly, exactly. But I’ve, I’ve been surprised over the years when I talk with people who I think would be great business owners who just have no interest because they don’t want to take on everything that it entails.

And I think that it’s important for everyone to be honest with themselves about what they do and do not want. And, and you should not do anything you don’t want.

Gini Dietrich: Right. Fair, totally fair.

Chip Griffin: You know, if, if you don’t want that risk, great. Go get another job. If you, if you’re willing to take on that risk to control your own destiny, to have a little bit more flexibility, theoretically at least, go for it.

I mean, I that’s, that’s obviously been my preferred route over the, the past 25 years and I certainly encourage it for anyone who is interested.

Gini Dietrich: Yeah, I totally agree with you and this, I mean, like you said, this is a great time for somebody to be thinking to, to test it out. If they’ve been thinking about it, figure out what works, what doesn’t, if it’s something that you want to continue doing, if you like, if you’re like, I think the two of us where it’s yeah, I would much prefer to be in charge of my own destiny.

And sometimes that means you have down years where you can’t control how much money you’re making. And sometimes it means you have fantastic years where you can make more money than you will ever make at a company. But it comes without stability. So I think there are lots of things that you should be thinking about for sure.

But if you have COBRA, especially here in the US and you have an opportunity to start and you have like, in this situation, I think she has a couple of companies who are interested in working with her. If you have that, test it out and see what you think. It’s it doesn’t have to be permanent.

Chip Griffin: It doesn’t. Nothing is permanent.

Not even this episode. We may change our opinions on this episode next episode. Maybe, maybe next time we’ll say, yeah, remember everything we said last week? Forget about it.

Gini Dietrich: Forget it. Just go get a job.

Chip Griffin: Just go get a job. You just never know. So, but hopefully if, if you, well, if you’ve listened this far, chances are you’ve at least thought about starting your own agency business or becoming a freelancer because otherwise, why did you keep listening to us this long?

That would just be a little bit strange. Maybe it’s just our charming personality.

Gini Dietrich: It is our charming personality.

Chip Griffin: Yes. Okay. So with that, we will draw this episode of the Agency Leadership Podcast to a close. I’m Chip Griffin.

Gini Dietrich: I’m Gini Dietrich,

Chip Griffin: and it depends.

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The Hosts

Chip Griffin is the founder of the Small Agency Growth Alliance (SAGA) where he helps PR & marketing agency owners build the businesses that they want to own. He brings more than two decades of experience as an agency executive and entrepreneur to share the wisdom of his success and lessons of his failures. Follow him on Twitter at @ChipGriffin.


Gini Dietrich is the founder and CEO of Arment Dietrich, an integrated marketing communications firm. She is the author of Spin Sucks, the lead blogger at Spin Sucks, and the host of Spin Sucks the podcast. She also is co-author of Marketing in the Round and co-host of Inside PR. Follow her on Twitter at @GiniDietrich.

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