"Join the ranks of famous entrepreneurs." Why not add this goal to your midlife bucket list? After all, Arianna Huffington started the Huffington Post at age 54. And Colonel Sanders launched his famous fried-chicken chain at age 65.
Family Goes Strong talked with AARP Bulletin financial columnist Jane Bryant Quinn about what to do with your good business ideas. Excerpts:
You talk about how some people want to retire to the "three G's" (golf, gossip, and grandchildren). But some don't.
A lot of people who are retired don't feel they want to sit on the beach. They want to make some money, and they also want to keep themselves engaged.
Why is mid-life a great time to start a business?
Any age is a good age to start a business if you have a good idea, you can execute it, and you can finance it. Do you know how to market and sell it and price it? Can you get some financing for it, and do you have some energy to do it? The answer for that is yes for older people as well as younger people.
How do you winnow your ideas if you've got more than one?
Once you write down all of the things you might be interested in doing, [you will find] most of the successful ones will be related in some way to something you did before — whether it was your previous business or whether it was a hobby. It may be, "I've noticed there's a real need in my community for someone to take older people to their doctors' appointments, and maybe I can run a taxi service for home healthcare because I've always been interested in the welfare of older people." It might be something that isn't in your town. "We don't have a shake shop here." Then the way you winnow is first you start thinking of, "Would I be happy doing this all day or half the day? Do I have the resources to turn this into a business? Do I have an idea for how to market this business. Is it something I would like doing? How would I make this actually work? How much would it cost me to get started?" When you start adding these practical considerations to your idea list, it will begin to winnow itself down.
What percent of your income or savings is OK to invest in a start-up?
It's different for everyone. Fundamentally the question to ask yourself is, "If this business fails, would I still be OK?" It's not a number. It's basically looking at what you need fundamentally to live and pay your bills. How much money is it going to cost? A lot of these businesses you can start on less than $5,000 or $10,000. These are mostly very low-cost businesses that you should be financing just out of the income you have.
You recommend taking a course from a local business school or community college to learn about how to start and run a small business – from legal requirements to sales taxes to bookkeeping. How do you know if you've found a good one?
You go to the school. You talk to the teacher. You talk to some of the students in the school. Remember it's not only the teacher you're learning from. One of the reasons to go to a class is you are going to be in the class with a lot of other new or would-be entrepreneurs. Others will be potential customers for you. You will be learning from each other as well as learning from a teacher. Again, it's not going to be a big investment.
You suggest setting up a separate bank account and phone line for your business. What happens if you don't?
Then you're going to be very confused when you do your taxes. You've got a business tax account and a personal tax account. Personally, I have one phone. But I've got four lines on it for different businesses. I don't want ot go down a single phone bill April 14 and try to figure out, "Was this $2.25 a business call, or was it a personal call?" You have to keep the records clean so it's clear what you spent for business.
You recommend a plan B for a start-up business. Why is that so important?
A lot of older people run it for a few years, they have fun with it, and then they decide they don't want to do it any more and close it. All of the businesses that are closed are not necessarily failures. A very high percentage of small businesses fail. That doesn't mean you shouldn't start one. All it means is you should take care as to how much you invest in it so if it does fail you'll be OK.
Other tips from Jane Bryant Quinn: Try low-expense start-up businesses, such as consulting, running an errand service for seniors, writing family biographies, planning parties, acting as a personal secretary for small businesses, and setting up a computer help service.
For more stories about work and your family, read: