Thoughts on Self-employment and Family

Whenever people talk about starting businesses, one of the most common deterrents people bring up is having a family to support. While being cautious and making sure not to put your family at risk is important, this fear assumes that there are only downsides. That couldn’t be further from the truth. I’m in my mid-thirties, married, and we have a two and a half year old daughter and a mortgage. We’re also a single-income family as my wife takes care of our daughter full-time.

Before we go on, I want to make it crystal clear that I’m not saying that everyone should start a business or that taking care of and having time for your family isn’t a valid concern. In fact, it’s the most valid concern. I just believe that we all fall into the trap of fixating on the worst case scenarios. And I feel like these fears are all based on the concept of “I must bet it all and go for broke” dramatic stories that we read in the media.

I’m also not saying that it’s easy, but I am saying that for every downside of trying to launch a business with a family, there’s an upside as well. If you go all-in and your business fails, it can seriously hurt your family. It can cut into your quality time with your family, lead to financial problems, relationship problems, or worse. The key is to minimize your exposure and risk. If you dive in without a safety net, of course there’s risk. The catch is that you don’t have to do it that way.

Financial Security Risk/Reward

Risking food on the table and a roof over your head is extreme and unnecessary. All of the time, we hear stories of the entrepreneurs that bet it all and became millionaires or billionaires, but you’ll rarely here the less glamorous stories of those that were cautious and slowly and steadily built stable companies making hundreds of thousands per year recurring incomes as they transitioned out of their full-time corporate jobs.

When you work for someone else, there’s always a chance of being laid off. Even in the best circumstances with decades of employment, people are laid off. So while having a corporate job is generally more secure day-to-day, there’s no guarantees at all, and your destiny is ultimately in someone else’s hands.

The biggest hurdle here is to stop thinking of launching a business as binary and imagining quitting your job on a whim one day. With that approach, your fears are entirely justified unless you have a huge savings account that you can afford to risk. Don’t quit that day job just yet.

Also, you can’t focus on the short-term with building a business. Building a business is about thinking about long-term. In the short-term, it’s almost impossible to avoid some degree of financial hardship. That could be as simple as cutting back on spending or as extreme as downsizing your life, but it is something you’ll need to prepare for. In our case, once I was working from home, we were able to downgrade from two cars to one. Not only did we generate some cash from selling the car, but we ultimately save on insurance and even gas.

You can’t focus on the short-term, but you can’t ignore it either. It’s best to avoid using credit cards to start the business. Start small and think affordably. Going and dumping thousands into a business on day one probably isn’t the best route. You can always self publish a book or other digital resources to help build your reputation and income on the side. Set this revenue aside and continue to find ways to supplement your income until you’ve either built a nice cushion or have enough recurring income that you can quit your job.

The biggest mental hurdle with regard to finances is to focus on the fact that building a business is about creating an asset that can provide for your family. You’ll have lower income in the beginning, but you’re working for the bigger goal of creating something that will take better care of them in the long-term. In our case, Sifter has grown large enough that the business has an insurance policy on me so that if something happens to me, my business partner can purchase my share of the business, giving my family a large additional cash payout in addition to our life insurance policy. It’s not something that’s pleasant to think about, but when we’re talking about providing for a family, it’s a key point.

It’s almost unavoidable to have to lower your income in the short-term to build a business, but if you’re careful and patient, it’s much more realistic than you may think. Moreover, the long-term benefit of building an asset could help your family far more than working a day job.

Health Risk/Reward

One of the other big fears is health. Depending on where you live, and your current circumstances, this can unfortunately be an insurmountable hurdle. However, more often than not, it’s actually workable.

If you truly can’t afford or obtain health insurance without a corporate job, there’s not a lot that you can do. However, if you can get insurance through your spouse, you may have more options than you think. Of course, without a spouse, that option is definitely off the table.

The other benefit of building a business, especially with recurring revenue that doesn’t depend on your hours worked, is that the income keeps coming in even if you’re disabled. In my case, I’ve barely been able to work for the last four months, and my disability policy doesn’t kick in until 180 days. Even with a more aggressive disability policy, we could have had to cover at least a few months of income. Fortunately, our income didn’t change at all because the business just kept on chugging.

While I can only speculate how things would have gone if I was working a corporate job, anecdotally, I know those kinds of scenarios don’t always end well. I can only imagine going through the last four months if I had lost my job and health insurance because I was unable to work. With my own business, that was never anybody else’s decision. Every step of the way, we’ve been in control of our own destiny.

Time & Relationships Risk/Reward

The last fear that I hear regularly is that of having enough time. I’m not going to sugar coat it. Building a business does require time and attention. For some period in the early days, it will require a lot of time and attention. However, in other ways, it also frees up time and increases your flexibility. If you manage it creatively, it can actually work out pretty well.

First and foremost, if you’re building a business, the goal should be for the business to be able to make money while you’re asleep. This will separate your income from the amount of hours that you’re working. Once you’ve done this, the sky is the limit. Of course you’ll always need to continue working, but once you recognize that you can increase your income independently of work hours, you have a completely new frame of reference for finding family time.

While some corporate jobs do provide flexibility, remote working, or other similar benefits, that’s not always the case. If you’re working 9-to-5 and commuting, running your own business out of the house or somewhere closer to home can free up time to cover the extra hours you might be putting into it. So time isn’t a net loss.

Similarly, the flexibility of your own business enables you to capitalize on things like going to the zoo mid-week instead of on the weekend. You could even go early, and be home in time to still get a half day of work in. Or you could quit work early to go. This has freed me up to spend a lot of quality time with my family that I otherwise wouldn’t have had the option for. I don’t want to be disingenuous. There are times where I’ve missed out on things with friends and family because of the business, but at worst, this is a wash. At best, I’m coming out a little ahead.

Building a business isn’t easy, but it’s not as dramatic, terrible, and exhausting as most glamorized stories would have you believe. With careful planning, patience, and a family that’s on board, it can actually be easier and more enjoyable when setting out with the support and motivation of your spouse and children.

3 notes

  1. garrettdimon posted this