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En español The idea of starting your own business can sound like it would offer the ideal mix of financial reward and flexibility, especially if you've spent much of your career working traditional hours for a boss. It's no wonder that, according to the Missouri-based Kauffman Foundation, people between the ages of 55 and 64 make up 26 percent of new entrepreneurs.
Starting a business, though, also comes with risks. Before taking the plunge, take a hard look at yourself, your finances and your business ideas. Research, network and plan, plan, plan.
- Do you have the confident, take-charge personality it takes to run your own show?
- Does your family support your entrepreneurial project?
- Do you have the tenacity to stick with it?
- Are you ready for a significant time commitment? Starting a business often involves more than 40 hours a week.
- Are you comfortable with a certain level of uncertainty and chaos?
- Are you a risk-taker?
Identify your product or service
- Take the time to choose. Carefully compare the pros and cons, the risks and benefits, of each type of business.
- Look for a business that allows you to specialize and fills a growing need.
- Learn the business by working for someone in the same business first.
- Pick something that you will enjoy doing.
Know the financial risks
- Don't use your retirement savings to start a business. Consider a small-business loan to get you started.
- Know that you have the resources and cash flow to cover a start-up period of a year or more.
- Consider "moonlighting," that is, starting a business in your off-hours while still working. But avoid all possible conflicts with your existing job.
- Beware of self-employment scams.
Develop a good business plan
A business plan shows why your idea is workable, how your business will operate, and how much your income and expenses will be.
The Small Business Administration is a good place to start, with links to local resources and blog posts aimed at entrepreneurs.
It's not enough to have a good product or service. You must know how to market and sell it. How will you reach your targeted market? What will make people buy your product or service?
You can also get help from SCORE (score.org), a nonprofit that offers free small-business advice.
AARP Entrepreneurship Roundtable
AARP Town Halls
Join us for two interactive events on funding and marketing your small business
- Funding Your Small Business: Nov. 19 at 7 p.m. ET
- Marketing Your Small Business: Nov. 28 at 7 p.m. ET