People age 45 and up have acquired a wealth of knowledge and skills about their professions and industries, are in better financial shape and tend to have more connections than younger workers.
However, starting a business is not for everyone. Most people who become self-employed are motivated by the possible benefits of starting a business, and not because they weren’t able to find other work.
Self-employment is not recommended for people who expect to be living from sale to sale – the entrepreneurial equivalent of paycheck to paycheck.
In addition, about 30 percent of small businesses with employees fail to make it past the second year and about half don’t make it into the fifth year, according to the Small Business Administration.
Regardless of whether people who are unemployed start a business because it was the only suitable alternative – or as the result of a deep desire or interest – they need to ask themselves the following questions before launching a business venture:
Are you suited for self-employment? People who start businesses must be prepared to make personal and financial sacrifices. But those who are unemployed, or have recently become unemployed, must also be certain they have sufficiently recovered emotionally from losing a job before launching a business.
Exactly why do you want to start a business, instead of getting another job? People who are most successful as entrepreneurs usually choose a field where their talents excel, and in which they have had a long-term interest. Entrepreneurship is not a good place for on-the-job training, particularly if your livelihood depends on it – and especially in an uncertain economy.
What type of business would be best for you to pursue? People who have a specific expertise in the professional services area – such as accounting, finance, marketing, public relations, or human resources – may be more suited to launching a consulting practice. Those who are more risk-averse may want to buy a franchise, or purchase an existing business.
Does your family or partner support your decision? Successfully launching a new business requires even more support from your family, children and/or partner, than conducting a job search. They will also be affected – from having less time with you, to a scaled-back standard of living, to being asked to give their time and talent to the venture.
What are your strengths and weaknesses? Since no one is usually good at everything, prospective entrepreneurs must make an objective analysis of the areas in which they will be needing assistance, such as sales, marketing, finance, distribution, etc. They should also examine whether they will have to hire someone to do these on a full, part-time, or outsourced basis, or whether they can learn some of the necessary skills.
Can you sell? Can you work alone? These are two important questions that people considering becoming entrepreneurs need to ask themselves. If the answer is ‘no’ to one or both of these questions, it doesn’t mean they shouldn’t go into business, it just means they need to figure out how to shore up those potential challenges.
Are you prepared to do what it takes to succeed? New entrepreneurs generally must work longer hours, and more days per week, than people in the corporate world. Another mainstay of a job – getting a regular paycheck – also isn’t assured, and new entrepreneurs must be prepared for financial rough spots, if necessary.
