Start Your Own Business?

I’ve been out of work for nearly five months, and the prospect of getting a job in my field (mechanical engineering) doesn’t look good—unless I want to move my family across the country. I’ve always wanted to have my own business, but am worried about the comparative lack of job security that goes with it. What’s your opinion? I’m over 50 and in good health. —Deidre N.

You have a lot going for you: you’ve always wanted to have your own business, you’re over 50, and you have good health. Security? You don’t have it now, and you didn’t have it when you got laid off. I don’t think there’s anything more secure today than working for yourself. Companies will cut any costs they have to just to stay in business, and the popular trend for the past two years has been to cut staff—fast. And consider this: when you work for someone else—big company or small—only a few people—your boss and one or two more managers up—control your future security. But with your own business, if you lose a few customers, you still have others to back you up. I’ve always looked at having my own business as giving more security, not less, than I’d have if I worked for someone else.

Another stunning fact of life: at 50, you’re more likely to be more successful at hiring yourself than trying to convince someone else to do it. Two years ago, Fortune magazine ran a cover story: “Finished at Forty,” detailing the corporate enchantment of hiring younger people. As one CEO put it (I’m paraphrasing): “Why should I hang on to someone who’s over 50? He’s tired of the long hours and wants to spend more time with his family, and he hasn’t kept up with the newest technology; I have to pay him $75,000 to $90,000 a year, and he argues with me. I can hire someone in his 30’s and pay him $35 to $40,000. He’ll work 60 to 70 hours a week without complaining, and he won’t argue with me. This is a no-brainer.”

What Do YOU Want?

My best advice is to do what feels right for YOU. When you’re motivated and committed to a career you really like, the money and security often take care of themselves. There’s a big difference in putting in 50-60 hours a week into a job you love, and one you just feel so-so about.

Assuming you’d like to start your own business, ask yourself some basic questions, (which also form the foundation for a good business plan)—an absolute must if you want to succeed. (Those who fail to plan are planning to fail.) Think carefully about how you want to spend 1/3 to 1/2 of the rest of your life. It you really think it’s time to have your own business, then write your answers to these questions:

• How would you describe your business (name, location, product/service?

• How would you describe your total target market—the customers who will be willing to pay you for your products/services?

• What industry, local, or consumer trends or needs will you react to?

• How would you analyze, and then describe your competition (how many;

current prices; their strengths/weaknesses)?

• What are your marketing and business goals?

• What are your first-year growth problems—and how will you solve them?

• What finances will you need to start the business and keep it going until it

can stand on its own? How will you get them?

• What’s your operating plan for the next five years? (At least half of the new

businesses started each year fail within the first 12 months. You must plan for a

long-term business.)

• What’s your management plan to control and develop your basic operation/service?

• What equipment, inventory, labor, space, overhead do you need?

Talk to Your Banker

Once your have your business plan in place; have prepared your personal financial statement (all your assets and liabilities); have a projected balance sheet and profit and loss statement for your business—at least for the first year— it’s time to meet with your banker.

Your banker can advise you on the likelihood of your succeeding in getting a loan and point you in the right direction to get additional information. An excellent source for learning about starting your own business is on-line: Search for “Small Business Administration” and you’ll discover a site that has all you need to know to write your business plan and finance your business. You’ll even have models of nearly 100 business plans to study and benefit from. The rest is up to you—and your energy and commitment.