Entrepreneurial Opportunities

There are thousands of business ventures out there. So how do you identify one that's right for you? The first step is to take a good hard look at your personal situation. What are your financial needs? Your personal likes and dislikes? What type of business would best accommodate your family's needs?

Once you've identified those sorts of factors, you can start looking at businesses that would best fit into whatever your situation happens to be.

Considering Your Personal Criteria

Having an idea of the type of business to which you're best suited will help you to narrow your search. Some factors to consider are listed as follows:

• Financial needs. If you're the sole, or primary breadwinner for your family, you probably want to start a business with a lot of potential for earning. If your spouse is already pulling in a great salary, or you're pretty well financially established, you may have a little more latitude about what type of business to start. If you're going to need to pay for college for three kids and stash a lot more money away for your retirement, you'd better be darned sure to choose a business with great moneymaking potential.

• Your personality. What's your personality type? Are you a high-powered ambitious sort who should be looking for a business with great growth potential? Or is your personality more laid back and better suited to a slower-paced enterprise? If you can't stand kids, you sure as heck shouldn't think about opening up a day-care center or toddler gym. If you never wear anything but jeans and sweat shirts, a trendy boutique probably doesn't make sense for you. You get the idea, right?

• Family concerns. If you're a woman with three young children and a strong commitment to the PTA, you probably want a business that allows you to have some flexibility. If you're single with few personal responsibilities, a business that requires you to work for three days without stopping might work out just fine. Also consider where you may have to live to make your business work. If you've always dreamed of owning a bait and tackle shop that specializes in fancy, deep-sea fishing equipment, for instance, it will make a lot more sense for you to start the business in Florida than in Kansas.

• Your health. Many people in their 40s and 50s find that they don't have as high of an energy level as they did in their 20s and 30s. Consider whether you'll be able to handle the physical demands of starting your own business. Also, consider any physical limitations that might affect what type of business you should consider. Health considerations often can be accommodated, but some businesses might be better suited to you than others.

• Your personal likes and dislikes. If you love to get up early, enjoy being around people, and love the smell of coffee, a Starbucks franchise might be just the ticket for you. If it's impossible for you to crawl out of bed before 10 a.m., however, a bagel shop that opens at 6 a.m. is a really bad idea. If you retreat to indoors the second the temperature dips below 45 degrees, you sure don't want to think about opening a ski resort in Colorado. If you break out in a rash every time you get close to an animal, you shouldn't consider starting a pet grooming business.

Giving some thoughts to these types of issues will help you to choose a venture that matches your interests and works for your personal situation. Once you've got an idea of what you want, you can see what's available.

What's Hot and What's Not

Once you've figured out what type of business makes sense for your personality and circumstances, you'll need to see what makes sense from a business perspective. It makes no sense to sink your resources, both financial and otherwise, into a venture that has little chance of succeeding.

With the digital camera market growing by leaps and bounds, for instance, it's not a good time to open a traditional photo developing facility. You should gear your search toward growth industries—those that are expected to expand significantly in the coming years.

There are several ways to identify growth areas. One is to simply take a look around and see what's been popping up. If three new coffee shops have opened in your town during the past year, and every one has a line of people out the door every morning, you may assume, correctly, that coffee is a growth area.

But don't take our word for it. Walk into your local department store and check out the housewares department. We've come a long way since our Mr. Coffee machines of the 1980s. You'll see cappuccino makers, espresso machines, seven kinds of fancy European coffeemakers, bean-grinding machines, and on and on.

A stop in the gourmet food section will reveal all sorts of coffees and coffee-related items, such as chocolate-coated stirring sticks, flavored syrups, and biscuits specially designed for dipping.

If you leave the department store and look around your community, you'll notice the fancy coffee vending areas in convenience stores, and the expanded coffee menus in restaurants and sandwich shops. It should be pretty clear that coffee is a growth industry.

If you're not comfortable with identifying growth industries on your own, you can get an idea of what's out there from government statistics. The Bureau of Labor Statistics has identified the following jobs as the 10 fastest growing occupations during the period between 1998 and 2008:

• Computer engineers

• Computer support specialists

• Systems analysts

• Database administrators

• Desktop publishing specialists

• Paralegals and legal assistants

• Personal care and home health aides

• Medical assistants

• Social and human service assistants

• Physician assistants

There you have it. Computers, law, and health care are the professions of the future. If you're thinking of starting your own business, and you happen to be a computer whiz, you shouldn't have much trouble deciding a job area in which you have a good chance of being successful.

What happens, though, if you don't have the slightest interest in computers, you don't want anything to do with lawyers, and you can't stand the thought of being around someone who's sick?

You simply don't gear your business toward any of those fields, that's all. Just because a job or industry has been targeted for growth doesn't mean you have to—or even should—jump on the bandwagon.

It's far more important to find an industry in which you're interested and comfortable, than to try to mold your entrepreneurial efforts toward an area targeted for growth. Consider your interests, your family and personal situation, and what your instincts tell you about the sort of business you should start.

Then be prepared to trust in yourself and make your dream come true.

Excerpted from The Complete Idiot's Guide to Personal Finance in Your 40s and 50s © 2002 by Sarah Young Fisher and Susan Shelly. All rights reserved including the right of reproduction in whole or in part in any form. Used by arrangement with Alpha Books, a member of Penguin Group (USA) Inc.

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