Your Own Business: Is it For You?

By John Martinka

Some people can’t sit still long enough to be “retired.” Others have to keep producing income to support a lifestyle and in many cases, people 55 and older have a tougher time getting hired (vs. when they were younger).

So, why not be in business for yourself. You can do contract work (the company tells you what to do, how to do it, when to do it, etc.; you’re just not an employee so you have flexibility), start a business, buy a franchise or buy an established company. Mike was 61 when he bought a business from a 44 year old, Rob was 63 when he bought a business from a 53 year old and Bob bought a franchise when in his mid-sixties.

No matter what model, if you have the right aptitude and attitude, it can be very rewarding. Forget the personality tests. By the time you’ve reached 50 you know whether your gut feel is that business ownership is for you (or at least that the possibility of ownership is for you).

Why have your own business? From the answers given by hundreds of people I’ve asked, here are the top nine reasons.

Control
Benefit myself from my smart and hard work
Independence
Decision maker
Flexibility
Income potential
Equity or net worth
Creativity
Be the boss

The most important reason isn’t on this list though. That reason is to have fun! To wake up in the morning with a smile on your face because it’s your business. It definitely can’t be only for the money. Money is important but the non-financial reasons must rise to the top of your list. Realize that most of these factors are not available to employees. Mike, mentioned above, said, “I have at least 10 more good years in me, I want to be productive and I want to do it on my terms.” Mike had, after a distinguished corporate career, started a business, sold out his share and moved on to buying another one.

There are four types of people when it comes to self-employment. On one extreme are the serial entrepreneurs and no matter what age they are they are always looking for the thrill of a start-up. On the other end are people like my mother, a college level math teacher, whom couldn’t imagine anything riskier than a paycheck from a government school.

In the middle are the rest of us and we either stumble or are forced into having our own business or we know we want it and take the time to build our capital and experience. The closer we are to the entrepreneurial end of this range the easier the jump will be.

Craig’s first reaction after being “downsized” was frustration that bordered on anger. He then realized that for 7-10 years he’d been dreaming of owning a business and his employer had just given him the kick in the pants to do so, coupled with the skills, experience and income that allowed him to accumulate capital.

Mark had a similar experience. His outplacement agency told him that he would have at least three more job searches during his career. Having never done a job search he said there was “no way” he was going to do a handful of them (his first job out of college let to being recruited by another firm in the industry). He made the decision to be self-employed.

Whether you need income, a challenge or get bored easily, consider your own business. You don’t need an aptitude test to tell you if it’s right for you. Your gut will tell you. Next, the various ways to be in business for yourself.

John Martinka of “Partner” On-Call Network in Bellevue, WA is a business consultant and speaker. He helps people buy, sell and grow small and mid-sized businesses. You can reach John at 425-576-1814, via e-mail at john@johnmartinka.com, Twitter @johnmartinka or his blog, www.johnmartinka.com. For more articles on this and related subjects or to subscribe to his free e-newsletter, see www.partneroncall.com/johnmartinka.

Your Own Business: Three Ways to Achieve your Goal

There are only three ways to get into business. You can buy an established business (let me clarify one thing; when I write, “buy a business” always make sure you mentally put the adjectives mature, profitable and fairly priced in front of the word business), start a business (consulting is a type of startup) or buy a new franchise opportunity. All of these models have advantages and disadvantages depending on you and your situation. I have a chart comparing over 20 of the key factors involved in buying, starting or investing in a franchise. Send an email to john@johnmartinka.com, put “Key Factor Chart” in the subject line and I’ll send it to you (and will not put you any other lists).

Starting a business

There are three primary reasons why people in their 50’s and 60’s are not prime candidates to start a business.

If they were the creative type they would already have had great idea for a new business. It’s tough finding a niche you can make successful.
The energy level needed to start a business is often an issue. The long days and often working weekends takes a toll.
Anywhere from 65-80% of start-ups fail, depending on whose statistics you see. When you are 50-70 years old it’s awful risky to put part of your nest egg in a start-up with those odds.

Buying a new franchise

A franchise is a great way to get into your own business given the right circumstances. Here are some of the key factors to consider when debating if a franchise is for you.

You get a “business in a box.” The concept, marketing plan, operations plan and more are provided to you.
If you are not very experienced in business and/or management, the “business in a box” concept is what makes a franchise ideal.
It is (usually) a proven concept.
It is still a start-up, you build it from the ground up.
Many make great lifestyle businesses.
You have restrictions as to the product and service you can offer, marketing, advertising, pricing, etc. (not all bad, while it can stifle a creative and experienced business person it also keeps less experienced people from drifting off target).

Buying an established company

As a Business Buyer Advocate ® I have a bias. People with solid management and/or leadership experience should favor buying a business (including on-going franchise operations) vs. the other options. If you can manage people, processes, money and systems why not step into the ongoing operation of a mature, profitable company?

You get an immediate salary and the profit pays your acquisition debt (assuming you buy a mature, profitable company).
You have an established product or service, skilled employees, a customer base and your customers pay enough for your product or service so that you earn a profit.
There is a proven plan in place, although it often is not in writing but in the seller’s head.
It is easier to finance than the other options whether it’s bank or seller financing although the option of “sweat equity” is not available.
You can do things “your way.”

If on a 1-10 scale, with one being no interest and 10 being, “I wish I had my own business already,” you are a six or higher you owe it to yourself to investigate it further. Next, the qualifications needed to successfully be a business owner.