The Small Business Owner is often hoisted up as the perfect manifestation of the American dream: the master of his own fate, pulling himself up by his own bootstraps—the very picture of independence.
Business owners are praised for their hustle and grit, chasing their dreams with an insatiable drive, and gettin’ paid for it.
But it’s not all sweat and glory. There’s a side of running your own business that people don’t talk about often.
Namely, that a lot of entrepreneurs are broke.
And I don’t mean like a wears-old-shoes, shops-at-Aldi kind of broke. I mean the kind of broke where you call your bank to argue about $5 fees. The kind of broke where you have to pay your electric bill late so you don’t overdraft your checking account. The kind of broke where you let your health insurance lapse because it’s the least immediate of your bills.
In the four years since my wife and I decided to strike out on our own, we’ve become very accustomed to the taste of being broke (and ramen).
I had to sell instruments to be able to afford our mortgage payment. For a few months, we lived off of food stamps—until we were cut off because we weren’t turning in enough job applications. While running our own business, remember.
We ignored minor health issues. If it was serious enough to warrant a prescription, we’d skip the clinic, research the symptoms, find the generics, and order medication online.
In the last four years, around 15% of our income came from money we borrowed from from relatives. Any time a friend would invite us out, we would scramble to figure out how we were going to pay for it (our closest friends knew to offer to pay for it from the onset).
Now, things are a lot more stable: we’re able to take steps to get out of debt and even setting aside some extra for retirement. But most of that is still coming from my freelancing work than through our actual business.
Because as much as we love our makerspace, it doesn’t provide anywhere near what we need to pay for our house bills. It’s breaking even, but that’s about all.
And don’t get me wrong: we wouldn’t want to do anything else.
But if you’re thinking about quitting your job and starting your own business, take a hard look at your life and imagine how it would feel if you couldn’t afford most of it.
If your unpursued passions hurt more than being broke, congratulations. You might just have what it takes to be an entrepreneur.