[LeeH]

I've been self employed longer than I've been employed. They both have their ups and downs.

I honestly feel a good part of business success is pure, dumb luck. Some will say you make your own luck. Maybe. I owned a small business, grew it, merged with a competitor, grew it some more and sold it. I know I had some influence on the outcome, but still feel a big part of our success was timing. I just happened to get into the right industry as the market started booming. We just happened to decide to sell at about the peak. There just happened to be a qualified, motivated buyer willing to pay our (what I felt at the time) lofty asking price. The buyer happened to make a creative offer that my partner and I happened to accept that resulted in a sale price 20% HIGHER than what we were asking.

I guess my point is that you never know how these things will go. I train people to use QuickBooks software now, and do some small business bookkeeping. I see businesses come and go. There are quite a few extremely smart and talented people who just happen to end up bankrupt from their small businesses.

I think the thing I see most that concerns me when people start/buy small businesses is that they are too optimistic. They think THEIR situation will be different than the guy who owned the business that just closed down in the same retail space. They think THEIR management skills will see them through. They think THEIR product is better than average and will draw in customers.

If you go the business route definitely get help from a disinterested third party. Too many times friends and family will say, "Go for it!" You need to find a "devil's advocate" who will point out all of the negatives. What's the worse case scenario if the business fails? Do you end up bankrupt? Do you lose our house? Retirement savings? Marriage? At your age, can your recover in the event that the worse case scenario comes true? My sister and her husband lost their life savings trying to run a restaurant. They're in their 70s and still working just to pay the bills.

I've looked at a lot of businesses for sale and have come to the conclusion that the businesses that make a lot of money and are very easy to run RARELY come up for sale. Why would they? Most businesses being sold have a "gotcha" that the seller and broker are not going to point out to you. One business I looked at had a dozen "independent contractors," but no employees. The owner admitted that I could expect to lose some of the people if I changed the contractors over to W2 employees as required by law. Another business I considered was all in the owner's head. He had unusually in depth knowledge of his field learned over many years. One company had multiple family members working there. Most weren't on the payroll. A new owner's realistic payroll expense would have resulted in a fraction of the profits they were claiming.

Not trying to talk you out of the business route, but just make sure you are, in fact, buying a business. Last business I looked at, while technically a business, was really more of a job. Guy paid himself a decent, but not stellar salary, but was working six days/week. Every week. With no end in sight. Time off? Not an option? Vacation? Nope. It was hard to get an appointment with him just to discuss things in person because he was so busy. In my mind, he was self employed, but at a job. Quite a different story than being a business owner. In this case, the business owned him. I could get a job doing just about anything, work as many hours as him and make as much money. And, I could do it without going into debt or risking my savings.