Losing a job could be a shattering moment for many, but with rising spirits, it could also be a chance to build a business you’ve always wanted to do. A regular job has its perks, with a steady income, benefits and reputation, but owning a business of your own is a new kind of liberation and independence. Here is what you need to know about building a business when you are unemployed:

Firstly, you need a solid business plan to come up with something of your own with the current economic conditions worldwide. Take in account consumer spending habits, your target market and how you would finance a business without a job before you jump into something drastic.

Campaign Creators/Unsplash. Knowing your limitations, unemployment benefit details and finances is crucial before beginning a business when unemployed.

What should you know before beginning a business while unemployed?

Next, you would want to know if you are still eligible to collect your unemployment benefit if you begin a business. You can do that, but the amount you receive weekly would be affected, and the hours you put in searching for a new employment opportunity would also be impacted.

There are certain terms when you are collecting unemployment benefits, including the hours spent on searching for new jobs, and the ability to start working immediately once you get a job offer. This limitation could affect the time you give to your nascent business, and you may even have to take a step back if you are offered a job.

Sharon McCutcheon/Unsplash. If your nascent business starts generating income, you must report it to the state and your benefits may get updated.

The laws pertaining to this depend on your state, and it is best to utilize the free time you have when unemployed to lay the groundwork for your business. All you need to do is meet the minimum requirement of looking for work, as per state laws.

The most important factor is income. If your business begins generating revenue, you have to report to the state, and your unemployment benefit would get reduced accordingly, as per the law of your state.

Kelly SIkkema/Unsplash. Make sure to meet the requirements for job search on unemployment as per your state laws.

Make sure that you meet the minimum requirement for job search, as failing to do so will result in losing the unemployment benefits. That also requires spending time hunting and applying for jobs, going to interviews and taking follow ups. And if you are offered a job, you are also required to join it if qualified. Failing to do so could also terminate your benefits.