How to Survive as an Entrepreneur When You Can’t Pay Yourself
Whether it’s a slow-paying client, a sudden layoff, or just being an entrepreneur, here are some tips to help you get through.
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For many entrepreneurs, having a safety net is the antithesis to everything they believe in.
Many will live and work hand to mouth until their venture succeeds or fails and shun opportunities that take them away from their goal. Sometimes this is part of the struggle of being a "true" entrepreneur, and it's easy to think that this success is dependent on having gone through it.
When you rely on clients to pay you, you can sometimes wait months for that check to come in. You therefore need to set up a group of consistent clients that will give you enough working capital to account for the slow and late payees.
When you become an entrepreneur, it becomes quickly apparent just how much you need to live month-to-month. I always recommend having a minimum of six months of savings built up before starting out on your own. Even so, many entrepreneurs deplete their savings and max out their credit cards before starting to look for alternate means to support themselves while continuing to pursue their dream.
As a 20-year-plus entrepreneur and startup veteran, I have had many years of practice with months of low or no income. At one of my first startups, we spent a full year working full-time for no salary--and no hope of backpay--to get the business off the ground. During that time, I learned many of the skills I've found useful to this day to keep myself housed and fed when money got tight. Here are some tips:
1. Cut to the bare essentials.
As soon as you sense that you may not have the same amount of income as you had before--whether that's a pay cut, pay stop, job loss, or whatever--have a list of items that immediately get suspended, canceled outright, or minimized. The internet may be a necessity, but cable TV, Netflix, Hulu, Spotify, etc. are not, and you can put them on suspension until you have spending money again. Likewise your cell phone plan. You may be able to negotiate a lower rate simply by asking.
Go through your bills and find everything that isn't essential and start the process.
2. Do some temp work.
There are all sorts of ways people can earn extra money on the side. You can drive Uber, deliver groceries, teach English online, etc. I personally spent my weekends demonstrating electronics at retail stores as an external contractor through a temporary staffing company and once even offered food samples at a grocery store.
I've found that if you're willing to work, there's always some sort of work available.
3. Clip coupons, obsessively.
No matter what, you still need to feed yourself and your family. If there's no money coming in, and all you have is time on your hands, this is where you can spend time examining sales and finding the best deals. Collect coupons, view circulars, and participate in forums to find what you need, and don't stick to a particular brand.
While the days of triple-coupons are mostly over, you can still work to get your grocery bill as low as possible. My personal best was a $0.75 total for over $400 worth of food, for which I later got $45 back in mail-in-rebates.
The life of an entrepreneur is permanently unstable. Keeping these simple things in mind can help you sail through even the roughest patches.