We 50+ Boomers are now the fastest-growing group of new business owners in the U.S.
We’re being attracted by the freedom to act upon our ideas as we see fit, the chance to achieve much better balance between our work and leisure lives and the opportunity to enjoy a source of income that’s only limited by our personal ambition.
But, as attractive as self-employment may appear at first glance, it’s important that you carefully consider the following seven criteria when considering whether to take the plunge.
Look for a business whose work will truly engage you. This is especially important if you’re feeling burnt out emotionally from the demands of your corporate career. A good starting point for identifying the right business idea for you can be to visualize how you can turn your favorite work activity in your corporate career into a business, or examine a long-held hobby to see if you can turn it into a full-blown business.
Understand the income potential and whether it matches your needs, and how much you are comfortable investing. Take a hard-nosed look at startup costs, your local competition, and your willingness to risk your savings. Take into account the fact that it takes most new businesses at least three years to break even – if they last that long. Later in life is not the time to shoot craps and risk your financial security. It’s worth sitting down with a reputable accountant who has worked with lots of startups and who can help you determine how much of a gamble you’re willing and able to take.
Match the physical demands of your chosen business to your energy level. A business that requires putting in long hours every day, or hard physical labor, may not suit you at this point in your life. On the other hand, if you love the outdoors, planning and planting landscaping or working in one of the building trades, by all means dig further into the possible business opportunities, but be honest about the sustained physical stamina that will be demanded to earn a steady income.
If day-to-day variety is important to you, rule out businesses that involve doing the very same thing for each customer. The idea here is to find something that will keep you passionately interested. Not every detail of running a business is equally interesting, but you want to assure that your business offers enough different experiences so that you remain eager to get up every day and run your business.
Do you love or hate technology? While most businesses require some computer use, consider the extent to which you’ll need to use other technologies – like wireless gadgets, the Internet, and various types of software – to help you manage your business. If you hate technology and would rather not bother with it, can you afford to hire technical help?
Consider if you’re ready to learn a complete new set of skills or primarily wish to build off of skills you already possess. Every new business owner has to learn some new skills, such as office administration or Internet marketing. But, it’s very important that you honestly assess how well you know the “nuts and bolts” of your prospective business idea, otherwise you face a steep learning curve your first year in business, at the same time you face the daily demands of selling your product or service.
If you find you’re drawn to a franchise opportunity, make sure you determine the total expected investment for the first two years. Be aware that, with a franchise, you will always have a business partner – the franchiser – who takes part of your income. Proceed with caution when considering a franchise: Talk with others who have bought outlets from the same company; make sure you understand everything the franchiser will expect from you (including how disputes, if any, will be resolved); and hire an attorney who specializes in franchising to explain the franchise agreement to you in detail.