To be concerned about partner setting up own business?

[Talkthirty2me]

My partner is an insurance executive and is wanting to set up his own brokerage.
He’s 28 and I’m 31. I work less than part time and earn around £250-£400 a month since having our son so he is the main earner and although my name is on the mortgage, he pays it.
He wants to set up on his own as I say and is highly excited about this prospect. I’m a bit more reserved about the idea, as we aren’t in a position financially that if he was to struggle initially we don’t have any savings or spare money to fall back onto. I just think with the job he’s in, it’s secure and he doesn’t have to deal with all the ins and ours is running a business. He tries to talk in business speak to help me understand but it just goes over my head. He say I’m not being supportive but that’s not the case, I’m just trying to get him to look at it from all angles first and not with rose tinted glasses. I have no doubt how fantastic he is at his job but I’m not sure if he’s thinking how much extra work it will be. AIBU for thinking this way?

I’m self employed and I love it. I would have been very very disappointed in my dh if he had guilted next into staying in my old job and not going for my dream.
Can you not increase your hours to build a savings buffer if you’re worried his income might drop for a while?

You need a few months buffer. But if he’s good at what he does then go for it.

Once DS gets his 3 year childcare hours next Easter I will be able to do more hours but not before then.
I just feel that he’s still quite young and at the moment he is always in his overdraft each month, we have £7K on credit cards and have a £10K wedding next year to fund so I just don’t think now is the time to be taking risks finically? It’s not the dream I’m trying to stop him pursuing I just don’t think it’s the right time for us as a family.

*financially

If you don’t have savings I wouldn’t risk it nown

You have no savings, debt and a significant purchase next year.

You're not being unsupportive you're being practical

Would you both be able to save 3-6 months of outgoings to act as an emergency fund while he gets it off the ground? Self employment is satisfying but by no means secure.

@PegasusReturns Thank you, I’m glad to hear someone say that. I just think even if he waits until he’s 30-35 he’ll still be young enough, but hopefully minus our mortgage by then we will be rid of the debt and be able to build up a bit of a buffer.
But he just gets really defensive and says how it will only be a few months we’ll struggle, he knows he can do it etc then he just starts talking insurance gobbledegook, loses me and then sulks by saying I’m not being supportive.
Where he is now he is doing very well, gets paid holidays and sick leave should he need it, and has had a pay rise every year. The thought of him giving that up to start from scratch at this point in our lives, with debts, a wedding and hopefully another DC after we get married, I just don’t feel it’s the right time.
But he doesn’t even try to see where I’m coming from

Starting your own business is potentially lucrative, but risky too.

He needs to be practical and think about finances:

20% of small businesses fail in their first year,
30% in their second year
50% of small businesses fail after 5 years

it normally takes anywhere from 6 months to several years for a new business to become profitable.
So, one of the main problems is paying household AND new business bills until then.

Before doing this, you need to clear any non-mortgage debt and build up savings, to whatever 6 months bills come to, after your net salary has been paid in.

He should also wait until you can increase your hours next Easter, so that your income can be maximised

As a couple you sound like you’re not great with money- no savings, no spare money, in debt and planning an expensive wedding. So under those circumstances I agree that it would not a good idea for him to quit his job to start a business. However, if you were working properly would you be better off financially and could he afford to do it then? Obviously earnings versus childcare need to be considered but it sounds like you barely working is the issue. Appreciate this was probably a joint decision so I’m not blaming you for crushing his dreams or any nonsense like that. It’s just that the reality is that going self employed when you have money troubles and are the sole provider supporting a family is completely unrealistic. If this is what he wants to do then as a couple you need to make a plan of how to get yourselves in a decent enough financial position to do it.

Neither of you should make major life changes, such as giving up a job , without the agreement of the other

You are a family now, with obligations and bills to pay.

I wanted to go contracting in financial services. Pretty much guaranteed I’d walk from permie to contractor role (did it within 6 weeks) but I spent 12 months spending no money what so ever. Cleared my debts and banked 3 months salary - I’d have liked to have had more months

He’s got to have that buffer before he starts working not when he’s earning

As main earner with debts, no buffer and child I wouldn’t make that leap

Every time I try to explain my reservations he just tries to say he’s considered this etc, and I said even if you said 5 years for when we’ll be in a better position you’ll still be young and he just said “Yes, it would give you another 5 years to suck any ambition out of me” I just want him to see it’s nothing to do with that, I might not understand his work but I know how good he is. But it’s a risk that I just don’t feel is worth taking at this point in time. If he was 50 and a last chance saloon or we had no kids and we’re still renting then maybe, but he’s in his 20s!

All the pp have said + Brexit! Timing is insane if UK crashes out - uk will be plunged into worst recession imaginable. Wait a year at least

@Dora26 I never even considered Brexit, that’s something else to add to my defence! Do you think that is likely?

My DH wants to set up his own business too, our children are school aged and I work full time. We are saving up so we have a cushion and I should be on a reasonable salary when he takes the leap, we are trying to set ourselves up so my salary covers all the necessary things so if the business takes a while (or fails...) we won't be destitute. I earn more than him but he still wouldn't do it right now, seems quite risky but I suppose it depends on the area of work.

An exit is happening for certain and that will be bad for the economy - but if there is no deal it will be catastrophic- personally I would stick to your guns - he may live to thank you!

My husband set up his own business four years ago and it was the best decision for us both financially and in terms of time and for my husband’s confidence. However a new business can be rocky for the first few years and we had savings prepared for this so I think it would be better if your husband concentrated on getting that cushion together first and made this a more long term plan. I don’t think it should be a no—just a not yet but there’s nothing wrong with beginning to plan it say with the goal of getting the business started in 3-5 years time when you have a little money set aside and you can work more hours to take up the slack while the business gets off the ground.

It might be very ‘un-mumsnet’ of me to say, but I’m highly likely to ever be the main earner. I’m a dental nurse by profession before have DS and after 10 years I was only on around £12k, it is a notoriously low paid job. I actually get £1.75 more per hour in my tea room job now! The only way would be to go back to uni and do 3 years studying to be a hygienist but with a young family it just isn’t the time (plus it would mean yet more debt)
If it was me wanting to a night course to be a hairdresser or something it wouldn’t really matter as my wage mainly covers groceries, the odd day out and clothing for DS. So it wouldn’t be the end of the world if we lost it, we would cope. DH is currently on £35k with a pretty much guaranteed pay rise each year.
I’m just so scared of him taking this risk and us being even worse off than we are at the moment.
If I went back full time to nursing I wouldn’t be an awful lot better off than I am now. My lovely parents currently babysit 2 days a week while I work but I couldn’t expect them to do 5 days as mum still works and dad is just about to retire and I wouldn’t want him to work 70 years of his life then finally get a rest and have my crazy little boy 5 days a week! Once childcare and fuel was taken out I would be no better then I am doing only 4-12 hours a week at my current job.

Highly UNLIKELY that was meant to say!
Once DS starts school I can work more if my parents would do the school pick ups, but I’m hoping we will be able to have another baby in the next few years as he is 3 soon

@Junkmail what area is does your husband work in if you don’t mind me asking?

Actually I lied, working it out I was on around £15,000. It was £1,100 a month after tax doing 38 hours a week.

"but I’m hoping we will be able to have another baby in the next few years as he is 3 soon"

You need to come up with a 5-10 year plan together as what you both want doesn't seem very compatible at the moment. You are the main carer so not bringing in much money and want to bring another child into it a risk for finances and time, your DH is the main earner but wants to compromise how much money he can bring into the family for hopefully a long term gain but a short term minimum risk.

If it were me, I would suggest having a child now-ish, assess your own career prospects and how you could bring money in when the kids are less reliant on childcare so you could potential take on some of the financial burden eventually, maybe look at study. You both need to be saving, and your DH could be researching all he needs to do such as his books etc.

Hopefully by then the economy will have settled down. But you need a plan, the most successful people have plans and it satisfies you that when you aren't achieving what you want that second, you are on the road to it.