NOTE: I am not an insurance agent, I don’t sell any policies, I don’t recommend products and that is best left to the professionals in the field. This is just mine and my husband Mike’s story. A story about what we wish we knew to protect our family as small business owners. I am sharing primarily because I work with entrepreneurs and these are the things we wish we would have known back in 2013.
As the Entre Money Coach I get asked frequently, “What made you become a financial coach?” So, I am just going to share our raw story, and our mistakes that closed our previous company. That closure threw us into severe financial difficulty, and took nearly three and a half years to dig out. Also, this post is not about life insurance, the most obvious, or even insurance for our physical business. I want to share the types of insurance that we didn’t know about but can perhaps prevent financial ruin for another family.
When Mike wanted to start a consulting business in 2011, I was so excited. And it was great. It really was. Mike and I followed the state guide, took all the legal steps, got our business license and set up our office space in our home. Then we took courses through the Small Business Administration and met with awesome advisors through SCORE. In short, we followed the “rules.”
We had a business plan, a (now defunct) website, worked hard, read everything, learned a lot, made a ton of rookie mistakes, embraced them, kept going. After about a year or so, we thought we had it figured out. And for the business, we sorta did. But today we talk about UNEQ Consulting (pronounced unique), LLC, in the past tense. It’s been gone since March of 2014. Because on November 1st 2013, Mike was working at a site in Eufaula, Alabama and fell head first 18 feet off of a ladder. Onto concrete. Yup. In three seconds, our life was changed forever.Mike survived the accident. Thank God. Had he passed? This would be a different conversation. But Mike survived, with a severe head injury and years of rehabilitation ahead. But this post isn’t about the accident.
Here’s why our story is important. It’s about what we didn’t do, and really never thought about. It’s our mistakes in not protecting our family and livelihood first as self-employed small business owners. I am sharing so that you can make different decisions.
So, here’s a short list of what we wish we had done:
Had a management reserve, or emergency fund with three months of our B-number saved in it, so we could take regular paychecks for a while.
• Had some sort of disability insurance on Mike, or “business continuity” or Key Man insurance.
• Understood that unemployment insurance is for the employed- just not the self-employed
• And that Social Security has an “exclusionary” period for around five months, where even if you are approved, there is no back pay
• Not incur unnecessary debt. For example, credit cards “we paid off every month.” We paid them every month until the income ran out, the deductibles started needing to be paid, and I had to choose. I have a course module on when it is the “right” time to leverage for growth. But we weren’t doing that. Sometimes our b-number went on the plastic and that was a big mistake
November 1st, 2019 just marked six years since our life changing event. Mike has made an amazing recovery, and it took years of digging in and working hard to recover financially. We paid it all in full, including the IRS lien on the house (for back self-employment taxes), and have sworn off personal debt. Over those six years we have been busy. I finished law school and became a consumer attorney and financial coach. Mike went through three grueling years of rehabilitation and walks without a cane.
This is why I coach entrepreneurs to avoid the financial mistakes we made. I want your business to serve your customers for many years to come. Long after the scary 5 year statistic. We hope that this post reaches just one person who needs to read it, and that they take action now to protect their livelihood and family. Please share our story with every self-employed person and small business owner you know.