The Military Guide


Guest Post Wednesday: “If You Are Starting a Small Business, Do Not Expect To Get Paid”

by Doug Nordman


Make it rain!

This guest post is brought to you by Jason Hull.

“A man’s respect for law and order exists in precise relationship to the size of his paycheck.”
–Adam Clayton

Somewhere deep down inside, I had the image of turning into the next Michael Dell. I was going to do things from my garage (well, at that point, my back deck), build a company, and suddenly have enough cash to fill a bathtub full of 1s and swim in it.

Doesn’t every entrepreneur have that dream?


While I would eventually sell that company, it provided me with neither a bathtub full of 1s nor a smooth ride in getting there. In fact, I went for nearly a year and a half without a paycheck before the owners of the company all agreed that we were going to pay ourselves a very modest salary. It was a significant cut over the pay I’d received at my last job. However, after eighteen months of receiving no paycheck, it felt like I’d won the lottery.

Did I mention 18 months without a paycheck? While working? Ouch.

A recent survey by Citibank shows me that I was not alone in living the life of austerity as we got our company off the ground. 54% of business owners surveyed showed that they had gone for a quarter without being paid, and 23% had gone for a year or more without getting paid. 69% of the respondents had put their own money into the business to help it survive. I’ve done that too.

What are the lessons that I learned from my experiences as a typical business owner, at least according to the Citibank survey?

Entrepreneurship is no bed of roses. If it was easy, everyone would be an entrepreneur. The landscape is littered with failure, and nobody wants to talk about it. Do you think it’s in the Small Business Administration’s interests to tell you the stories of failure? Of course not. Most people who fail are saddled with losses and debts, and that makes a pretty story for nobody.

Prepare for failure and plan contingency plans for it so that if you do not succeed in business, you’re not crippled and digging out of the hole the rest of your life. Have your break and exit points so that you can dust yourself off, build up some reserves, learn from the experience, and try again in the future.

I’ve been on the successful end of entrepreneurship and I can tell you that if you succeed, it is well worth all of the pain and struggle that you put yourself through. While I do not have a child, I can imagine that it’s a similar experience. The day to day struggles of child raising are sometimes agonizing, but when you step back and look at it, it is all worth it.

Did you start up a small business? Were you prepared? Are you thinking about one? Tell us about your experiences in the comments below!

Jason Hull is a candidate for the CFP(R) Board’s certification, is a Series 65 securities license holder, and owns Hull Financial Planning. He is also a personal finance columnist for U.S. News & World Report.
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