Bouncing Back

The sad faces. The closed-door meetings. The severance package. The "times are tough all around" speech.

With layoffs hitting companies all across America, large numbers of workers have lost both their jobs and their financial stability. Unfortunately, that can happen when you work for someone else. But what if--just as your employer is handing you your last paycheck--you say, "I know times are tough, but just in case you still need some help, I'd be willing to do some projects for you on a freelance basis." In a matter of moments, you could turn gray skies to blue and start your life as an independent contractor.

That's just what Jennifer Callahan did when she quit her marketing and public relations position at GolfServ, an Internet golf services and content provider, in early 2000. "I left on very good terms," she says. "I worked closely with the president and had a good relationship with her." So when Callahan, 29, left, she kept in contact with her former supervisor, Kathryn Lazerow, and let her know she was willing to freelance should the need ever arise.

After Callahan was laid off from her next job (this time at an adventure-travel Web site), she went back to GolfServ and again made the offer to do contract work--and this time, Lazerow took her up on it.

This scenario is happening often, according to job industry experts. "The phenomenon of people [freelancing] for their old bosses is cyclical; it relates to the state of the economy," says Jo Schlegel, editor in chief of Salary.com, a job and compensation issues Web site. "Once it becomes feasible to telecommute, it's a natural step for many people to take--especially if they've been thinking about taking the leap and going into business for themselves."

With all the emotions flying around after a layoff, the transition from employee to independent contractor can be a bit tricky--so be prepared. Callahan, for example, was laid off from two jobs and offered to freelance for both former employers--but only one took her up on it. "[Just] don't be shy about approaching them for work," she says. Even if they say no, you've still put your name out there.

To avoid major drama, clarify your objectives and expectations upfront, says Schlegel. Be specific as you come up with your fee figures, and be very frank in your discussions about your work as a freelancer. "It's got to be a win-win [situation]," she says. "If it's not going to be a win-win, then you're not going to do the deal."

As you expand into serving additional clients, be aware of any noncompete agreements you signed with your former employer. "Be smart and don't send up flags that say 'Investigate me,'" Schlegel says. "Fly under the radar screen by serving a different niche, maybe smaller or larger companies or different geographic regions."

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This story appears in the March 2002 issue of Entrepreneur. Subscribe »