Side business can hurt unemployment benefits |
|
|
While some business activities could be seen as earning a salary, selling your own goods is often considered converting
your existing assets to cash, he says. So, depending on the way your state views it, the activity may not affect your unemployment
benefits at all.
Sometimes, though, it's not as clear-cut. If you're selling items that you create, like handicrafts, someone could consider
the resulting money as wages earned for work.
Another factor that may be important: When you report how much you make, you want to talk about profits, not revenues.
"You report your income, not your sales," says Lancaster.
Say that you're running an online store. You sell a china pitcher for $20. But the mailing costs and shipping supplies
total $12. In that case, your income is $8, not $20.
When you start to consider the price of doing business, such as mailing costs, supplies and other legitimate business
expenses, the outlay can be significant.
Your best bet is to talk to the unemployment office when you apply. Ask plenty of questions. Describe what it is you're
doing or selling, along with your true net income, not the gross amount that the business generates.
Local employment offices have plenty of experience with side businesses, says Lancaster. And the questions that arise from
them "aren't that unique," she says. "They come across them all the time."
Not always either/or
Six states (Delaware, Maine, Maryland, New Jersey, New York and Oregon), also have programs designed to help out-of-work individuals launch
businesses or jumpstart existing enterprises, says Jacob Benus, executive director of Impaq International, a consulting company in Maryland.
Four more states (Alabama, Minnesota, North Carolina and Virginia), are looking to launch programs by early next year, he says.
While the programs vary by state, the general principle is similar. Individuals apply and, in some cases, can receive free
business training. Some states will also grant a pass on the requirement to look for work in order to remain qualified for weekly benefits,
"which is critical" to start-up entrepreneurs, Benus says.
But the programs remain very small, partly because few people know about them and partly because the states aren't promoting
them, he says.
If you want to get in, you have to ask the unemployment insurance office.
"We're down to a handful of states who have it on the books and, for a few, it's a relatively unused program," Benus says.
New York State has one of the largest programs, with about 1,000 participants, says Benus. Other states' rosters may number
in the dozens or hundreds, he says.
What now?
Analyzing exactly how much your side business generates and what it costs (especially in time), can help you make some important decisions
while you're looking for your next job. It will also give you some realistic expectations for what you want to do next and how you want to
schedule your time while you're out of work.
One strategy if you're juggling a job hunt and your own small business is to set a deliberate schedule for each, says DuBrin.
Don't use the same block of time for both, or switch back and forth between the two, he says. That way, you're consciously deciding how much
time to allot to each.
"A person has to make out a mental plan," DuBrin says.
"No multitasking."
|
