Do I or my spouse have to have a benefitted job before becoming self-employed?

So we received an awesome question: 

"My goal has been, from the beginning, to be able to let go of my full-time job (which provides a healthy salary and all the benefits for my family) in order to practice full-time. This past year was NOT the year because my spouse was out of a solid job for 6-7 months and there were no benefits offered. BUT, my spouse finally found a position which has a great benefits package!

Here's one thing I haven't heard come up in your blogs or seminars, but I may have missed it: let's say you ARE doing your practice full-time. Does that mean you should probably have a spouse with a steady paycheck job, in case times are slow? And what about health, dental, and vision insurance? All that would have be bought as an individual plan, unless that spouse is connected with a company, which is reeeeally expensive. That's where I (and my colleagues) feel trapped. They'd LOVE to break out on their own, but security needs to be there first."

We can definitely help with that! 

Here is the truth, and many of you aren't going to like it. There is no such thing as security. Ouch! Notice that even in the question, a spouse lost a position with benefits, that was probably thought of as secure. 

Now, let's be clear here- we aren't suggesting that you fly by the seat of your pants in business and hope for the best. We just want you to realize there is often just as much risk in staying in a "secure" position.

Kelly and I both had the "secure" benefited jobs with our respective counties. And both of us left those positions for self-employment to the shock of our colleagues. Fast forward a few years and those colleagues are dealing with pay cuts, slashed benefits, and furloughs. The security they thought they had wasn't there at all.

So, what is the secret to developing a business that is "safe." This is where it gets great! As an employee you often have NO SAY as to how the business works, and financial decisions. Your boss can tank your company and YOU pay for their bad decisions!

As a business owner, you can look at the big picture and make decisions that make sense for your life, your business, and your future! You benefit from making good decisions and your hard work!

Where many business owners get into trouble is not developing a business plan that takes into account the realities of doing business. What are some of those realities? 

  • cost of taxes
  • cost of health benefits
  • cost of sick and vacation time
  • cost of technology/emergency fund
  • cost of slow times

I speak with business owners whose goal is to make $30,000 or $40,000 in 2014. They are focusing on their old salary as an employee- and not making adjustments for self-employment! At the end of the day, they may end up netting (taking home) much less than they did as an employee. 

Business owners who value themselves, and who want their business to be self-sufficient develop a business plan that gets them what they really want! If you develop a business plan that allows you to make 6 figures for example, you can put away 20,000 into business savings, easily pay the cost of private insurance, have buffer for expenses, and easily pay your taxes. 

Live in a place with a higher cost of living? You may need to aim higher than just hitting that initial 6 figure mark. Are you a single parent? Is your home paid for? Do you live simply? Do you love to travel? There are a load of reasons why your target number may be higher or lower than your colleagues- and that is ok! Starting with the right annual goal, and a clear plan to get there is the first step. 

While having a spouse might give you a peace of mind. You still want to develop a plan that allows for the same "security" you would have as an employee. Why? Because things can change in an instant. 

I've had the call that my spouse got laid off from his secure position without any notice (while I was self-employed). I've had the panic attack about benefits. In fact, I share a bit more of the story during our upcoming webinar and how I "did the math" to really look at what made sense- even with an unemployed spouse! 

I get it! So, what can YOU do to create more security in self-employment in 2014? Make a great business plan! Understand the big picture so you can develop a plan that truly makes sense and allows your business to flourish and provide you with MORE security than you  had as an employee! 


Feel free to join us for our business planning and visioning workshop next week. It is very interactive, inspiring (as told by our last batch of attendees), and will get the juices flowing for you to develop your perfect business plan for 2014