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How To Start A Business With Your Husband And Stay Partners After You Get Divorced

This article is more than 7 years old.

Lacy Starling, 35, is president of Legion Logistics, a trucking logistics company in Florence, KY, with 51 employees and 2015 revenue of $26 million. She owns 49% of the business and her ex-husband, CEO Tony Coutsoftides, 42, owns 51%. An immigrant from Cyprus, Coutsoftides moved to the States at age 17 to fulfill his dream of joining the U.S. military, but he became too disabled to serve after breaking both his legs during a training jump at Fort Bragg. The daughter of a truck driver, Starling started the business in 2009 after a circuitous career that included media marketing, a fundraising job for United Way and selling Mary Kay cosmetics. While building Legion, she and Coutsoftides coped with an unexpected pregnancy and savings that dwindled to $63 on the eve of their daughter’s birth. In 2012 the couple divorced but remain business partners. In this condensed and edited interview, Starling describes her unusual career trajectory, the challenges of building a business from scratch and what it’s like to work with her ex-spouse.

Susan Adams: Did you do anything entrepreneurial before you started Legion Logistics?

Lacy Starling: I started my first business when I was a journalism student at Kent State in the late ‘90s. Together with friends, I founded a media marketing and web design company called nevergohungry.com, that consolidated information about Kent, OH. We’d sell advertorials to local restaurants and do reviews of their food, and we did web design for restaurants and bars. After three years I sold my share to one of the other owners for $5,000.

Adams: How did that experience shape your ambitions?

Starling: I had been determined to be a newspaper reporter, but newspapers were shutting down and I learned that I loved running a business. I also found out I was really good at sales. That prompted me to go get my MBA. I started at Case Western Reserve but I realized after a year that I probably wouldn’t get very good return on investment on the cost of my degree because I wasn’t going to go work at a place like McKinsey. I ended up transferring to a tiny school in Canton, OH called Malone College where the tuition was just $5,000 a year and I could get my degree at night. At the same time I worked in retail management for a small family-owned jewelry store.

Adams: How did you go from running a jewelry store to trucking logistics?

Starling: I moved to Cincinnati nine years ago to be with the man who’s now my business partner. He’s also my ex-husband. We met through eHarmony. My first job in Cincinnati was in fundraising and development for United Way. But I didn’t feel particularly valued in my role there. I’m recognition-motivated and the culture at United Way wasn’t about that.

Adams: What was your next career move?

Starling: For two years I sold Mary Kay Cosmetics.

Adams: How did that job work out?

Starling: It was difficult for me. I buy my cosmetics at Walgreens so I didn’t fit into that culture either. But it taught me a great deal about sales and sales incentives. With every sales level came prizes. You could get guitars and luggage and clothing and jewelry. They had done a lot of research and they found that cash incentives just disappear. If you give someone a grill or a TV, every time they see that they’re reminded of the good feeling they had when they earned it.

Adams: How did you decide to start a business?

Starling: My ex-husband had done logistics while he was in the service and then worked for a trucking logistics brokerage firm in Cincinnati called TQL. We thought we could start our own company doing what he did but he had a one-year non-compete agreement in his contract so I started the business myself. He left his job and planned to sit out the non-compete for a year.

Adams: How did you fund your start-up costs?

Starling: We had saved what we thought was enough money, $250,000 between our savings account and our retirement account. Starting out, it was just me in the basement of our house with a phone, a computer and a desk I’d gotten from Walmart.

Adams: How did you get your first client?

Starling: I had a list of companies who had contracts with the General Services Administration. They needed supplies moved and they put the contracts out for bid. I called down that entire list and found a company that needed supplies moved to military bases, staplers and shredders and all sorts of stuff. We started out doing LTL, which stands for less than truckload shipments that are too big to send through the UPS store but too small for a whole truckload. I Googled around until I found a consolidator that shipped LTL freight. They provided me with a rate and I marked it up.

Adams: How did you know how much to mark up the shipment?

Starling: The standard in our business is 15% but it really depends on the market and where the shipment is going. I tested the market over and over. There are information sources to see what drivers are posting and what they’re paid. You have to pay close attention to fuel prices.

Adams: How did your business do in the first year?

Starling: LTL shipments are small dollar. They can be as little as $200 or $300. We only brought in $12,000 in sales in the first year.

Adams: How long did it take you to become profitable?

Starling: I started the business in September 2009 and Tony joined me in July of 2010. We didn’t start making a profit until May of 2011.

Adams: Did your savings tide you over?

Starling: About the time Tony joined the business I found out I was pregnant unexpectedly. I checked the bank balance the morning I delivered. We had $63 in our checking account.

Adams: How did you survive?

Starling: It was scary. But three weeks before we had our daughter Catherine we closed our first U.S. government account. That catapulted us from $650,000 in revenue our second year to $3.4 million in sales in 2011. Also the U.S. government pays in two days. And we’d started doing full truckloads in the middle of 2010.

Adams: How did you land the government account?

Starling: It was Tony’s military background. He had a deep understanding of how to move their freight and how bases operate. He spoke the same language they did.

Adams: What challenges did you face as you grew?

Starling: We kept 70% of our business with the U.S. government through 2012. Then in 2013 the government went into sequester and shut down. We realized we had to diversify our business. By the end of 2015 the government was a little less than 10% of our business. Also at the end of 2012, Tony and I got divorced. We had to communicate to our employees that the business was not at risk. We still work together every day. We sit across a divider in our office.

Adams: Did the business drive you apart?

Starling: The business put incredible pressure on the relationship. We had a small child, we had this business that was growing. Both of us felt so passionately about the business, neither of us was willing to take a step back and focus on home. Our personal relationship was our last priority.

Adams: How did you keep your personal acrimony from affecting the business?

Starling: We didn’t have a contentious divorce. We went to one attorney. I handed her a spreadsheet dividing up our assets. She said it was the easiest divorce she’d ever done. Having to see each other and interact every day, we had to get over our problems fast.

Adams: Is there really no tension in your business relationship?

Starling: Once every six months we have a giant shouting match about how we’re running things. I’m very people-centered and he’s very numbers-centered. We were recently looking to move someone from a sales support role into a regular sales role. He wanted to keep them in a supporting role because he said the numbers didn’t line up to support the move.

Adams: How did you resolve your disagreement?

Starling: We brought in a third party, our sales manager, to give us an unbiased opinion. We ended up moving the person into the sales role.

Adams: How profitable is the business?

Starling: We had gross profits of $3.7 million last year.

Adams: How much do you pay yourself?

Starling: Before taxes, $100,000.

Adams: Does your husband’s veteran status give you any advantages?

Starling: We have a Service-Disabled Veteran-Owned small business designation through the Veterans Administration. That puts us at the top of the list in bidding for some contracts, including with the U.S. government. That’s why Tony owns 51% of the company. But we didn’t realize we could get that designation when we started Legion. It’s helped us expand our government contracts.

Adams: What’s the most important lesson you’ve learned in building the business?

Starling: I always joke that Tony and I were too dumb to think we could fail. We just charged ahead.