To start a business at midlife, decide how much money you're comfortable risking, assess your skills and passions, then ease your way in
Q: I'm retiring at age 57 and would like to start my own business with some savings. How do I find the right niche?—P.T., Fort Worth, TX
A: Many of the issues involved in discovering the right startup business niche are independent of your age and relate more to your lifestyle and personality type. For instance, starting a business (BusinessWeek, 4/16/07) is extremely time-consuming and involves a great deal of hard work. It can also be a lonely undertaking that requires great persistence and optimism.
Do you have the time in your life and the personal toughness that's necessary to become a successful entrepreneur? The Small Business Administration provides some guidance that might help you decide.
If you do have the right stuff, the main issue related to your age concerns the financing for your company, says Dick Stroud, a business consultant and author of The 50-Plus Market. "You need to decide how much of your savings you are prepared to commit to the startup, the level of financial return it must generate, and the speed at which the business must become profitable," Stroud notes. "A 27-year-old can afford to make a few mistakes and rebuild savings. It will be harder to do that at age 57."
Where Does Your Passion Lie
When deciding what industry will provide the best fit for you, examine all the things you've done up to this point in your life, suggests Lynn Falwell, founder of It's Your Move, a moving management company. "List the jobs, hobbies, and experiences that you have enjoyed and find the common factors, aspects, and threads. Look at—and ask friends who know you well and will be honest—what you are particularly good at. Ask yourself where your passion lies," Falwell says.
Stroud agrees: It's best to go with what you already know and love. "The most likely opportunity will come from utilizing the skills acquired during your working life. If you want a total change in lifestyle, then purchasing a franchise (BusinessWeek, 7/31/06) will provide a ready-made business," he notes.
Falwell had been a real estate broker and educational adviser when she founded her company, which focuses on assisting seniors with moves, in 2002. "Working in real estate and seeing the level of assistance needed by older sellers was a wake-up call to the lack of available services for this segment," Falwell says. She had also relocated her family to Australia, so she was accustomed to complex moves. The moving agency combined her talent for organizing, problem-solving, and calming clients and their families, she says.
Once you come up with some ideas, do the research necessary (BusinessWeek, 11/19/07) to establish that there is a market for the product or services you've identified. In Falwell's case, she had demographic information about the graying of America, and she knew busy executives from the "sandwich generation," who worried about whether their out-of-state parents could physically and emotionally handle a necessary move.
Finally, don't rush into any decision, Stroud says. "Read a couple of the numerous books that are published about starting a new business. Talk to your friends who have already made the transition to self-employment. If at all possible, try and get work experience in the new business before making a substantial investment," he advises.
Investing time up-front in research, planning (BusinessWeek, 12/3/07), and training will greatly improve the quality of your decision and could save you a considerable amount of money in the long run.