Starting your own thing after being let go

The Friday I was made redundant in 2022 I drove home the long way, parked in the driveway, sat in the car for forty minutes, and by the time I walked in the back door I had decided I was going to start a consultancy. I had no clients. I had no offering written down. I had a vague sense that I was good at "the strategy stuff" and that the world surely needed more of me doing it independently.

The consultancy lasted nine weeks. I burnt $4,200 on a logo, a website nobody visited, and a Pty Ltd structure I did not need. I had two coffee chats that went nowhere and one paid project for a former colleague that I delivered at a 60 per cent discount because I did not yet know how to price. By week ten I was back on Seek. The redundancy had been real. The consultancy had been grief wearing a business plan.

This is for the man sitting in a similar driveway, similarly buzzing, similarly convinced this is the moment to break out on his own. Some of you genuinely should. Most of you should not, yet, and the difference is recognisable if you slow down.

Is this a real signal or grief talking

Redundancy hits the nervous system like a small bereavement. Loss of identity, loss of routine, loss of the daily proof that you are useful. The brain, scrambling for a story that does not centre on rejection, reaches for the most flattering one available: I am too good for that place anyway, I am going to build something better, I am going to be my own boss.

Real entrepreneurial signals look different. They have history. The idea has been kicking around for two or three years, you have done weekend work on it, you have already had a few people pay you small amounts of money for it, you have a written-down view of who the customer is and what they will pay. The signal predates the redundancy. The redundancy just removed the friction that was stopping you act on it.

Grief-talking signals are reactive. The idea formed in the last fortnight. It has not survived a sober Wednesday. It is shaped suspiciously like the job you just lost, only with you sitting in the corner office. When you describe it out loud at the kitchen table your wife's eyes go distant in a particular way. The idea is the wound trying to dress itself.

A simple sorting question: would I still want to do this if my old employer rang tomorrow and offered the role back at a 20 per cent rise? If the answer is yes, the signal is real. If the answer is "well, I would have to think about it", the signal is grief.

The six-month test

Here is the test I now wish someone had given me in 2022.

Give yourself six months from the day you decide to pursue the new thing. The clock starts when you write down a one-paragraph description of what you sell, to whom, for how much. If at the end of six months you have one paying customer, real money in the bank, money they paid you because you solved a real problem for them, then you have a business. If you do not, you have a hobby, and that is fine, but you should go back to looking for a job and treat the hobby as a hobby until it earns its keep.

One paying customer in six months is a low bar by design. It is low enough that almost any genuine offering should clear it if you are putting real hours in. It is also high enough that grief-projects almost never reach it, because grief-projects do not survive the awkwardness of asking strangers for money.

The test does two useful things. It puts a fence around the experiment so it does not eat your savings indefinitely. It also gives you permission to fully commit for six months without the underlying anxiety of "should I have given up by now". Six months is the deal you make with yourself. At month six you check the test honestly. No fudging.

If you have $80k in redundancy and your monthly burn is $11k, your six months has a built-in safety margin. If you have $20k in redundancy and your monthly burn is $11k, you do not have six months, you have eight weeks, and the test needs to be reshaped accordingly. Do the maths before you start, not after.

The Australian setup mechanics nobody walks you through

Assuming you have a real signal and you are committing to the six-month test, here is the practical scaffolding for an AU sole operator.

• ABN registration. Free, online, takes about fifteen minutes through the Australian Business Register. You will need your TFN and a few bits of personal ID. The ABN is your business identity for invoicing, GST, and most contracts.
• Sole trader versus Pty Ltd. The default answer for a one-man consultancy with under $80k of revenue and low liability risk is sole trader. Cheaper, simpler, your business income flows into your personal tax return. Pty Ltd makes sense once revenue clears around $100k, you have liability exposure that personal cover will not handle, or you want to retain profits in the company at the corporate tax rate. Speak to an accountant before you spin up a Pty Ltd. The setup costs and ongoing ASIC fees are not large but the bookkeeping overhead is real.
• GST registration threshold. You must register for GST once your business turnover hits $75,000 in a 12-month period. Below that it is optional. Most consultants register voluntarily because their clients are GST-registered businesses who claim the GST back, so charging GST is invisible to them and gives you a cleaner setup if you cross the threshold mid-year. Talk to your accountant.
• Professional indemnity insurance. Non-negotiable for most consulting work. Budget around $800 to $2,000 a year depending on what you do.
• A business bank account. Keep business money separate from personal from day one. The accountant will thank you, and so will future-you when tax time arrives.
• An accountant. Find one before you need one. A decent small-business accountant in Sydney or Melbourne is $1,500 to $3,000 a year for a sole trader and worth every cent. They will save you more in deductions than you pay them.

None of this needs to be perfect on day one. ABN, bank account, basic insurance. The rest you sort as you go.

The mortgage broker conversation

This is the bit that catches almost every newly self-employed man by surprise. The moment you stop being a PAYG employee, the way banks look at you changes overnight.

Most lenders want two years of self-employed income before they will treat you the way they treated you as a salaried employee. Two financial years, with tax returns and Notices of Assessment to back them up. During those two years, getting a new mortgage, refinancing, or even increasing a credit limit becomes considerably harder.

If you are sitting on a mortgage you might want to refinance, or you have any plan to move house in the next two years, ring your mortgage broker before you trigger the self-employment switch. Sometimes there are workarounds (low-doc loans, lenders who will accept twelve months of trading instead of two, using a partner's income as the primary serviceability source) but they need to be set up before you go independent, not after.

I know two men who lost a $200k borrowing capacity overnight when they went sole trader. Both could have planned around it with one phone call. Neither did.

If you are thinking about leaving employment to start something, the order of operations is: talk to the broker first, talk to the accountant second, register the ABN third. Not the other way around.

A closing thought on identity

The hardest part of starting your own thing is not the tax, the website, or even the first sale. It is the daily identity work. You no longer have a company name to hide behind. When someone at the kids' soccer asks what you do, your answer used to take half a sentence. Now it takes a paragraph and you watch their eyes for the moment they switch off.

That discomfort is also data. If you can sit with it for six months and still want to be doing this work, you probably have something. If you cannot, you have learnt something equally useful, and the learning is worth the price.

Either way, you come out clearer. Patient.

Six months. One customer. The truth.