Dear Dave,
I work as a software developer, and recently a co-worker approached me about starting a side business together. We would create apps for the legal community with advice from my wife, who is a lawyer. The only problem is that we’re in the middle of Baby Step 2 of your plan, and we still have some debt to pay off. Do you think starting a business would be too risky at this point?
Jeremy
Dear Jeremy,
It sounds to me like this is the kind of idea that would require more in the way of brain sweat and time than money. I would just think of it as a part-time side job and go for it. However, make sure you have a clear understanding of exactly how much — if any — financial support would be required. Set these financial boundaries, and also be clear on when you expect the business to make money.
One thing I would warn against is ending up in a partnership if this thing becomes a success. Partnerships are bad news in the business world, so I’d advise you to figure out a way to structure things where you each own different parts — something more along the lines of a joint venture.
But in terms of doing some side deals, creating some cool new apps, and making money in the process? Absolutely, I would do that. Just figure out an intelligent way to structure the business and finances so you don’t get pinched!
—Dave
* Dave Ramsey is America’s trusted voice on money and business and CEO of Ramsey Solutions. He has authored five New York Times best-selling books. The Dave Ramsey Show is heard by more than 11 million listeners each week on more than 550 radio stations and digital outlets. Dave’s latest project, EveryDollar, provides a free online budget tool. Follow Dave on Twitter at @DaveRamsey and on the web at daveramsey.com.
