Just about everyone I know has been touched by the downturn in the economy and the rash of layoffs that have taken place. There are many reasons for these layoffs; however, the real tragedy that has come out of this is that businesses are not as readily willing to hire the unemployed. So how can you make it appear that you have never been unemployed?

The reality is that companies want the best person they can find to fill their position, and there are just too many people applying for every job to make interviewing them cost effective. To help narrow the field, some employers (not all) have resorted to screening candidates to find those not currently employed. By doing this, they narrow the field to a more manageable number of candidates to interview. They also feel that if the candidate is not actively engaged in something, they are going to sit around and collect unemployment until they find a job if they fire you later, which could be for an extended period of time these days. What you also may not realize is that the checks you received for unemployment compensation costs your employer money. They are required to contribute to your unemployment compensation payments and pay a higher premium on the employer’s share of the insurance policy.

So, how can you honestly demonstrate to a potential employer that you are not unemployed? While not simple, one answer is to go into business for yourself. For many years now I have helped many entrepreneurs start new businesses. Most of them came directly from the corporate world, where they were an employee who was laid off as part of their employer’s downsizing initiative. By starting their own business, they re-entered the corporate world as a business owner, not as an employee. Some of them run their business only when not working for an employer. Others have left the world of being an employee completely, having found the rewards of operating their own business more attractive.

There are some things you should know when you decide to start your own business.

First, it is not the easiest thing you will do in your life. You will need to decide on the type of business, such as making specialty soaps or developing web sites. You will need to develop a plan for marketing your business.

The second thing you need to know is what type of entity is right for your business type. Do you need to form an LLC, LLP, S Corporation, or be incorporated? You are not always required to form one of the entities I’ve just mentioned. In fact, many people don’t form one of these and do just fine. The reasons for forming each entity differ, such as the amount of risk your particular business faces, how each is taxed, and so on. I have helped many people figure out which one to form based on the answers to these concerns and I can tell you that there is no easy formula to follow in choosing the right entity or choosing not to form one at all.

The third thing you need to know is that you do not have to spend a lot of money to market your business. In fact, contrary to everyone who is going to want to sell you their social media marketing and search engine optimization services, there is no silver bullet when it comes to identifying and qualifying prospective customers, and most of them can’t get you to the top of the search engines. You will want to create a web site, but you don’t even have to do that right away. Timing is everything and spending your limited resources wisely is critical. You want to get the most bang for your buck, so don’t buy into the hype.

Finally, the last thing you should know is that you need to leverage those relationships that are closest to you first, both for moral support and a reality check. It’s easy to think you are the best at something so people will just flock to your door to buy your product or service. In reality, it is what differentiates you from the rest of the crowd that will lead to your success. This takes some soul searching, so be ready for a tough period of introspection.

I can promise you this; if you take the time to learn what differentiates you from the crowd, and you develop a plan to create a business that incorporates what I have presented in this article, you will be a long way ahead of most people who start their own businesses. The final result will be that you can honestly say, “I’ve never been unemployed,” and mean it.