Paycheck Chronicles

Financial Considerations for the MilSpouse Entrepreneur

Mom working from home

When I transitioned out of the military, I became -- mostly, by accident -- a small-business owner in the financial services industry.

The eight years I owned my business were filled with a few triumphs and plenty of setbacks. In the end, there was no happier moment in my working life than when I signed on the dotted line to become a USAA employee. For me, life as an employee has been a better fit.

Many military spouses, on the other hand, embrace entrepreneurism because it can be as mobile as their military lifestyle. As you start your journey, take it from me: Just because you're good at your craft or have a good business idea doesn't mean you'll excel at running a business.

With that in mind, here are five points to consider as you begin your foray as a small-business owner:


  1. Seek assistance. I noted "by accident" in my characterization of my move into business ownership. I didn't do enough homework to understand all my options and, in my excitement to get started, just "yeah, yeah'ed" when they were explained to me. Know your weaknesses, get help from experts, and have a plan to keep your business on the right path. The U.S. Small Business Administration's website offers many helpful articles, as well as a business planning template. Seek input from a lawyer, accountant and financial adviser; all can provide valuable input as you start your business and throughout your journey.
  2. Pick the right entity. Most businesses start as sole proprietorships but, from tax and liability standpoints, there could be better ways to organize. That's especially true in light of changes from the Tax Cuts and Jobs Act. In today's litigious environment, limiting your liability should also be top-of-mind. This is a great topic for a discussion with your new team of advisers.
  3. Insure your operation. Having a business will necessitate a fresh look at insurance. From liability and property insurance to workers' compensation, running a business comes with its own unique requirements. For me, business ownership meant adding a business owner's policy to my array of personal insurance. Yes, it was another expense, but it provided liability protection and coverage for my business-related property.
  4. Keep business cash in the bank, and don't forget Uncle Sam. Businesses, especially new ones, will experience cash flow fluctuations. To get your business through the lean times without putting a strain on your personal finances, be sure to sock away some savings when times are good, and make those estimated tax payments. There were a couple of years where I underpaid my estimated taxes. Don't make the same mistake. Today, flashbacks from my time as a business owner still make me shiver when April 15 rolls around.
  5. Take advantage of expanded retirement options. From Simplified Employee Pension plans to 401(k)s, a small business offers many easy ways to save on taxes and expand your retirement savings. I say "expand" because I'm certain your family is already taking advantage of individual IRAs, as well as the military's Thrift Savings Plan.
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