Photo by Georgia de Lotz on Unsplash
I work with a lot of people in transition. Sometimes it’s extremely positive – they’re looking to be good stewards of some kind of financial windfall. But more often they find their way to me during a difficult time or life transition.
I also see a lot of people who are either self-employed or who would like to start a small business. Sometimes these are the same people who are in a challenging financial situation, and we need to have realistic conversations.
If you’re in a time of financial difficulty, it may not be the right time to launch your dream business. Starting a small business is a luxury, although I’ve never heard anyone describe it as such. You don’t have the stability of a paycheck, or health insurance, or a retirement match. [Building up a side hustle while you work a W-2 job is different – that’s something you can always do, so long as you have the time to devote to the side job.]
I work with a lot of women going through divorce. They’re often losing financial stability and also a financial partnership. Unless you’re leaving your marriage with a lot of financial assets or ongoing support payments, this is not the time to launch a business to fulfill your dreams. That time may come, but you have to consider your immediate needs. Your rent or mortgage needs to be paid and groceries need to be put on the table. Ask most people who have started a business, and they will tell you that it often takes years to grow it to the level that it’s profitable enough to support their lifestyle. You may not have that kind of runway to get your business up and running.
I started my small business eleven years ago. I was mostly a stay-at-home parent, although I worked part-time seasonally during tax season. My family primarily lived off of my husband’s salary. That put me in the very fortunate position of being able to take time and money to start my financial coaching practice. I often tell people that I couldn’t have afforded to do this work if my income had been necessary to pay the mortgage or feed my children. It took me a few years to get the word out and start to get a steady stream of clients. There’s no way I could have afforded to do so without a working spouse. I had children; they needed health insurance.
Even today, I consider what I would do if my husband were to be unable to work. It’s likely I’d need to stop this business and work at a place where I’d be eligible for benefits. These days, without health insurance subsidies, the cost of my family being on the exchange would be completely untenable for me. I love the work I do and I really love my work/life balance; I would hate to close my practice, but I have to be realistic, and I will always do what is required for my family to thrive.
If you’re facing a difficult financial situation but are holding on to a dream of self-employment, this doesn’t mean that you can never pursue your dream. You just might need to delay it in order to get your feet under you, shore up your financial security, and come up with a plan to build your business without putting your family in a precarious position. Doing it right is better than doing it quickly.
