There’s no doubt that divorce is a major life event. It changes everything you thought you knew about your life and where it was headed. Ironically, so is starting your own business. So while it may not seem to make any sense at all to start your own business after a divorce, for those who are so inclined, it may actually be the perfect time!
But before you go off and get business cards printed and proudly declare yourself an entrepreneur, there are some things you need to know.
Then in part two of this article, I’ll share with you 5 tips to build a solid foundation of your fledgling enterprise to give you a much better shot at success than if you just go off willy-nilly!
Hard Truth #1 – This Is Gonna Be A Piece Of Cake. A Piece Of Stale, Burnt Cake.
Starting your own business is a piece of cake. For a few hundred dollars, you can go online, register a company, get a website name, and set up phone and e-mail. Piece of cake!
But then something happens. Startup is over and now you need to run the business. Running your own business is hard. Just like a piece of stale, burnt cake.
The reality of having your own business is MUCH different than what others think it’s like to have your own business. And if you start to believe the myth that as an entrepreneur you lead some carefree, glamorous life, you can get overconfident and lazy.
And your competition will pass you by.
So take a good look at yourself in the mirror and ask yourself this: “am I willing to do everything necessary to make my business a success including sacrificing every waking moment I have to keep it going and eating Ramen noodles while I’m in startup mode?” If the answer is no or even maybe, then maybe starting a business isn’t for you.
If you’ve been through a divorce, my guess is you’re a lot stronger than you think you are and can survive anything. So compared to the emotional turmoil and financial hardship you’ve endured, starting and running your own business may seem easy by comparison!
Hard Truth #2 – The Naysayers Will Come Out in Full Force.
There’s some random statistic that people like to toss around that goes “90% of all businesses fail in the first 5 years.” But the way I look at it is that 10% of them succeed. Let me put that into context.
Your chance of winning the lottery on a single ticket is approximately one in 175 million or 0.0000006%. Yet the same people who keep asking you “why are you starting your own business, You’re going to fail!” probably play the lotteries every day. It would seem to me that you have a much greater chance at being successful starting your own business than playing the lottery, wouldn’t you agree?
That being said you’ll need to be like that cake and toughen up. The best way to prevent the negative chatter in your brain from starting is to avoid the naysayers. Instead, much like when you got divorced, surround yourself with positive people who have something constructive to contribute. You’ll find out who your true friends are and may even lose some in the process.
Hard Truth #3 – If You Fail To Plan, You Can Plan To Fail
Just like anything in life, you gotta have a plan. It doesn’t need to be a long, complex, multi-year plan mind you, but it does have to have some logic behind it. There will be some significant financial and emotional realities when starting your own business. So it’s best to think about them before they happen rather than to be stuck in the middle of the chaos and not know what to do.
And just like a seafaring captain manning a boat, at the start of your journey, you plot your course and make your plan using every available resource known to you. And since there’s always a chance of rough seas ahead, you have a plan for that as well.
You may not have planned on getting divorced. But had you known that one day you might, perhaps you would have done things differently. When running a business you can absolutely count on things to go wrong. So plan for it.
Hard Truth #4 – The Chances of You Making A Lot Of Money Are Slim
Much like those who think we entrepreneurs sit around and watch TV all day stuffing our faces with snacks, the same people also think when you own your own business you’re rich. HA!
The hard truth is we don’t do this to be millionaires. We do it because we love the challenge and embracing the spirit that says “we can do anything we set our minds to and no one is going to tell us otherwise!”
When I go out to dinner with friends, they all look to me to pick up the check. They say things like aren’t you just going to run it through your business?” And while that may be true, I AM the business so that money comes out of my pocket. I’ve got no corporate expense account, just two checkbooks – mine and the business.
And even if you do manage to sell a whole lot of whatever you’re selling, businesses are costly. There’s no 401k, no health insurance, no IT department and no free lunch. All the profits you make go right back into growing your business. And if you’re lucky, to pay your mortgage.
You probably went through a budgeting exercise when you got divorced (or at least I hope you did). It may be time to pull out that budget and figure out if you can afford to live on less and invest something into a business. If you’re lucky, figure on making a small profit in year two so plan accordingly.
Hard Truth #5 – Inventory, Real Estate and Employees Will Kill You
Most people think when you first start out, you need to get a space, hire staff and buy a whole lot of stuff to sell. So you invest all of your initial capital into these goodies.
You sign what you think is a great 5 year lease (I mean after all, you’re going to be a huge success so why not!?), hire a staff of 10 people and buy every item you can think to stock your shelves.
Then you open your doors and business is going well. You seem to be making a lot of money. Excellent! But then something happens, the landlord doesn’t take too kindly to you being late with your $5,000 / month rent payment, your employees will walk out if they don’t get paid and those vendors will come and repossess that cute stuff you bought to sell. So what do you do?
Start small. Sure it may be difficult at first to do it all by yourself and work out of your dining room but do it. Don’t fall prey to the trap of “play big or go home.” Instead focus on learning how to run your business. There will be plenty of time to open that retail location, hire those 100 people and stock your store to the gills with the latest designer merchandise.
Now That I’ve Scared The Wits Out Of You…
I hope that after reading all of that, you don’t run off and think you can’t start your own business. Far from! I just wanted to make sure you were prepared for the reality that is sure to follow once the initial glow of self-employment wears off.
In my next post, read my 5 tips for success to make sure you get a good head start and build a solid foundation when you do find yourself speeding down the entrepreneur highway!
Let me reiterate a very important point mentioned…you will work long, hard, 24/7/365 hours because there is no one else to back you up. Being in business for yourself is fun, you get to be the boss, but it takes a lot of effort!
Start small, keep your day job for as long as humanly possible and use it to fund your startup purchases, like equipment. Make sure to have insurance, especially an umbrella policy if something goes horribly wrong.
And, by all means, set yourself up as an LLC and not a sole proprietorship. Protect your peace of mind and your family.
Good points Deja Vow. You’d be surprised at how inexpensive business insurnace can be yet how many people I know don’t have it. As far as corporate structure goes, this would be a good thing to talk to your accountant (or an accountant) about as while an LLC is a great choice, there may be other business structures that are more advantageous (or necessary) depending on what your business is.
This article has NOTHING to do with starting a business AFTER DIVORCE.
Just…starting a business in general. With some comments on how tough divorce has made you.
Lame.
she ra, why would you think there would be a difference in starting a business after divorce that there is before a divorce. There are things one has to do to start a business whether they are divorced or not. Someone who has been empowered by divorce may be more likely to succeed when starting a business and that was plainly stated in the article. If you hoped to read something that would tell you starting a business after divorce would be free or easy, good look finding that article.
I feel like she was referring how the divorce would affect you financially in terms of splitting the income .