Scary start-up

iVillage Member
Registered: 12-31-2010
Scary start-up
11
Fri, 01-18-2013 - 12:23pm

As most of you "residents of DSG" know, I went into my own business last year.  It was scary but I took the plunge into my passion.  I had a great emergency fund, our debts were really going down, and we were getting to be in good shape - not great, but good and I took an offer to make the move, and my husband says my face is so bright every day and he is so happy to see me so passionate.  I was at an event last week, and met some other women in the field, who had nothing but encouragement for me, as well as really sound advice.

Well now most of the eFund is gone!  I have a couple thousand left, but that is a baby efund compared to what I had. My goal was to be at 50% of my prior pay by now, but it is more like 25%.  I can no longer project out a 6 month payment plan, and that scares the heck out of me.  DH's pay dropped, even with a small raise, because our healthcare went up $180 a pay for the SAME coverage, thanks Obamacare!  (OK, some of our prescriptions are covered now, and are primary Dr co-pay is down from $40 to $10.)  The hit is about $500 a month less from his pay, which is substantial, and we don't spend that much in medical to make up for it.  Right now he brings home only 51% of his gross pay due to all these deductions.

DH bought a truck this fall and it was a great deal, and was planning on selling his outright.  Well then DS's old car we gave him started acting up, so we gave him the truck, with expectations he pays us back.  We did give DD $2500 for a car this year, and she paid the rest for hers.  To make things equoal, we took the same $2500 off the value of the truck (as DH had a buyer for $11k, so we valued it at $10k for DS, then took $2500 off that price.)  Now he owes us $7500.  He still has no college job, so I am worried about that deal and don't expect really anything from him.  The truck sale was supposed to pad our eFund again, but that is not happening.  Again, scary!  But to buy a car for DS would be far more than the value of the truck for something that is older, with more miles and an unknown history.  And repairing the 1995 Chevy seemed pointless as it was getting too old.  We did get $1000 for it, that was ours.

I am doing what I consider the "right" thing to do in my new position, with regard to obtaining and helping clients and prospects.  The potential for growth is really there doing the right things, and I am getting good feedback, just the wheels of income turn very slowly, so my income is not where I expected so far.  My mentor threw me for a loop a couple weeks ago, with his future plans, which could be good for me.  We are doing a lot of education, and from that have a lot of potential in the works. Issue is that we meet with people 3-4 times to do fact finding, analysis and then make recomendations, a process that might take 3 months or more in some cases.  Again, it is the right process, just slow for someone working on no salary. 

Our pantry and freezers are stocked.  We should not need much at all but basics for a while.  Our vacation in March is a road trip to Florida to stay with in-laws, so no big trip there either. Taxes, insurance and big bills are paid for the next 6 months.  We also expect a pretty good tax refund and will file asap, which will pay any big bills (car insurance) coming late this spring. 

With DH's pay, I just need about $2.5k a month to make it with a little wiggle room, it was only $2k, but his paycheck hit increased demands on me.  And I need to invest in the busines - computers, continued education, marketing, supplies, etc.  I have put my retirement savings on hold for now.

So I guess what I need is encouragement.  I know I can do this, can do it with integrity and build slowly by reputation. There are so few women in this industry and it is actually dropping.  I am working 60-80 hours a week, but I LOVE IT.

Or should I throw in the towel and go back to a salary world?

-Marie, eating rice and bean soup!

#Marie

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Community Leader
Registered: 08-25-2006
Fri, 01-18-2013 - 7:01pm

I admire any one who is willing to take that kind of risk to do something they love.  I don't know where the line in sand is for you and your DH, but unless that day comes, I say keep plugging away.  

Doesn't it take a good two years, at least, for a new business to show a profit?  Or something like that.  

The only other thing I would add is to keep your DS accountable for the auto loan.  It may take a few years, but I wouldn't let him off the hook.  If I understand correctly, this an area where you treat the kids equally.  So if you let him off the hook, are you going to feel like you need to accomodate DD in some way to keep everything equal?

Anyways, chin up!!  If it is time to go back to a salary a some point, your gut will tell you.  I waited too long to give up the fight and got myself in crazy debt.  Luckily I never quit my regular job.   But I don't see you doing that, so keep at!  You can do it!

Serenity

Serenity
iVillage Member
Registered: 12-31-2010
Fri, 01-18-2013 - 8:32pm

Serenity,

Thanks, I actually showed a small, very small, profit last year and I did pay my expenses, but not a salary.  This year I paid myself a bit plus expenses for the first time, as my business plan dictated, but it was smaller than anticipated.

After I wrote that today I got not one, not two, but three pretty good breaks.  One from my mentor, one from a family member and the third from my community.  They are potential outlets, not cash register rings.  But they are positive notches in the business plan.

-Marie

#Marie
iVillage Member
Registered: 12-31-2010
Fri, 01-18-2013 - 8:32pm

Serenity,

Thanks, I actually showed a small, very small, profit last year and I did pay my expenses, but not a salary.  This year I paid myself a bit plus expenses for the first time, as my business plan dictated, but it was smaller than anticipated.

After I wrote that today I got not one, not two, but three pretty good breaks.  One from my mentor, one from a family member and the third from my community.  They are potential outlets, not cash register rings.  But they are positive notches in the business plan.

-Marie

#Marie
iVillage Member
Registered: 04-08-2008
Fri, 01-18-2013 - 10:49pm
To say that you are doing something you are passionate about and still love after 70-80 hrs/week is priceless. Owning your own business is VERY tough in the beginning and takes a lot of time and energy to get off the ground. But the rewards are also amazing as well. I may some day follow in your footsteps! I'll be watching you closely. It will be difficult to wiggle out of my velvet handcuffs, but I might ;-) keep up the good work! Dee
Avatar for poorboy2011
iVillage Member
Registered: 10-02-2011
Fri, 01-18-2013 - 11:28pm

If any of us can do it, you can! Hang in there. Things cannot stay bad forever! Our luck will turn, and we'll look back to this moment with nostalgia.

iVillage Member
Registered: 05-08-2006
Sat, 01-19-2013 - 10:24am
Marie, I know you are a proponent of tough love - otherwise I eouldn't say this. What lesson - life or financial - are you teaching your stepson that you are working 60-80 hours a week to give him a truck while he is lounging around at college not working. I don't think your retirement plans include supporting him, but you might be setting yourself up for that. If you had that $10000 in your efund, or some money towards the debt coming in, you would feel better and not have as large a monthly shortfall. Is there a way for you to generate income in a few of those hours you are working? Are you teaching? Could you pick up a class, or do some adult Ed that might help find prospects? Do tax returns and prospect there? Give speeches for pay? Do some marketing consulting! As long as you are not going in to debt I think you should hang in there with the business, but make sure you are not out of touch with prospective employers too long.
iVillage Member
Registered: 11-14-2008
Sat, 01-19-2013 - 11:40am

Hi Marie,

7 out of 10 small businesses fail. And the reason is mostly because people cannot go with out a salary or a reduced salary for long periods. 

However I think you are probably in the three out of ten category!

I know its scary and so do you. You knew that going in though. I think you have to set a time line on things like this. Meet these expectations in the next 18 months or it isn't worth your 80 hours a week, I don't care how passionate you are. Then you will have given it a good go by that time. Because that is a long time to go with out an income for you what you are trying to accomplish in your life.  Being your own boss is great, or it has its perks, but there has to be a sustainable, worth while income or its just a hobby.

And....while serving peanut butter cookies to DS I would mention that if someone has time for a girlfriend(first one or not) they have time to fit in one or two shifts a week at college, you do expect that loan paid back, at a slower pace maybe, but paid back, in full. He is a big boy and will appreciate the financial independance you are trying to teach him one day, maybe not this weekend, but one day!

I would love to visit your cabins! They sound awesome!

With all the love I can muster....

Karen

iVillage Member
Registered: 12-31-2010
Sun, 01-20-2013 - 2:58pm

Happy -

I appreciate the tough love more than you know.  I actually gave up teaching at the college level and am instead teaching adults in my field that become prospects.  I am doing women's classes starting in March as well.  There is a small fee the students pay, that covers their materials. I can't teach regular classes due to the 10+ week time commitment and I have the potential to make more per hour seeing clients during those hours, which are nights and weekends, when clients are also available.

I did do a talk at our local business outlets regarding marketing and did offer up some consulting and a few people took up my card. 

Oh, and our son is looking for a job, he put in two resumes and this weekend we looked for paid summer internships.  Unfortunately he is dating a girl who thinks it is beneath her to even waitress.  Not liking that attitude.

-M

#Marie
iVillage Member
Registered: 10-01-2008
Mon, 01-21-2013 - 1:06pm

I see your point about loving what you are doing but I also sense the fear of the sinking efunds.  I'd give it three more months and then re-evaluate the situation.  In the meantime, it would not hurt to keep an ear open to some job openings.  Maybe things will pick up in the near future. 

GOOD LUCK!

Community Leader
Registered: 08-25-2006
Mon, 01-21-2013 - 4:55pm

(((((Unfortunately he is dating a girl who thinks it is beneath her to even waitress.)))))

Ugh!  I am sure that isn't helping any.  

My xBIL was like that.  He was so far out there that I couldn't even be mad at him.  He just didn't get it.  (as he was sleeping on our couch at the time.  Really?  And he was in his 30's)  I still get collection calls for him 15 years later.  He doesn't have kids, so whatever floats his boat, I guess.  He just goes from one GF to another.  

You are a smart lady.  I am sure you will know if it is time to do something different, whether it be getting a job or having to change your contribution to the kids college and all that goes along with that.  

Serenity

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