Many Obstacles to New Careers : Executives Finding It Tough to Change Horses in Midstream

What nobody ever taught Richard Alexander about starting a business could fill a textbook, and perhaps that’s what the 50-year-old Newport Beach high-tech consultant, analyst and researcher will write next.

Alexander gave up an executive marketing position seven years ago to start a telecommunications manufacturing business with two partners. Within three years, the company was floundering.

“You have to be a little nuts to start your own business,” Alexander said. “There are so many things you have to learn on the job.”

Today, Alexander has no regrets about going into business for himself. After bailing out of the telecommunications firm, he set up a marketing consulting company that is thriving.

But Alexander’s success hardly is universal. Many corporate executives who decide to become entrepreneurs in mid-career find the going unexpectedly tough.

Despite their maturity and experience in the business world, mid-life entrepreneurs still face the same pitfalls and problems as their younger counterparts--and perhaps several additional roadblocks.

“Guys who have been working for a big corporation all their lives do things differently. They have different mind sets,” said Richard Buskirk, director of the entrepreneur program at USC’s School of Business Administration. “The average business employee isn’t a businessman. He’s a specialist or a bureaucrat. He needs some extra help.”

Although no one knows for sure how many of the nearly 700,000 new U.S. businesses created last year belong to middle-aged workers, experts say persistent corporate layoffs, expanding use of forced early retirement and a renewed attraction to small business are giving rise to increasing numbers of mid-life entrepreneurs.

In fact, teaching aspiring, middle-aged entrepreneurs how to take the jump is quickly becoming a business specialty of its own.

For example, in Bloomington, Ind., continuing layoffs, as well as ample government retraining funds, prompted two vocational counselors to open the Human Enterprise Development Group, a self-employment training center. Buskirk says USC and other college entrepreneur studies programs throughout the nation are considering adding seminars aimed at the middle-aged.

Middle-aged entrepreneurs need special attention, the experts say, because self-employment was not their first career choice.

What’s more, in many cases, the eventual decision to start a business isn’t entirely voluntary: Many new entrepreneurs were dismissed from or unhappy at their old jobs.

“It’s important to make the distinction here between the true entrepreneur and the self-employed person,” said Meyer Waxler, co-founder of the Human Enterprise Development Group. “We’re not talking about million-dollar ventures here. We’re talking about a job for one person that might someday grow into jobs for four or five people.”

Another source of stress for the mid-life entrepreneur is a family’s financial needs. By middle age, workers commonly have accumulated mortgages and life style expectations that exceed those of their younger counterparts. For example, middle-age workers are likely to have child support and education expenses at the same time that they want to provide for their retirement.

Major Commitment Necessary

Generally, the family feels the tension first and worst.

“It puts an enormous strain on a marriage. The stress, the hours and the financial uncertainty are all very strong,” Alexander said. “You have to anticipate money problems when you start a business. You have to learn how to dodge bullets.”

The effort involved in starting a business is often underestimated.

“It’s a complete emotional commitment,” said Theodore Smith, who founded FileNet Corp. in Costa Mesa five years ago. Although Smith, now 57, had served as president of a large computer manufacturer before starting his company, he said he was still unprepared for what the new venture would require.

“I had to give it 150% of my effort because I had put my reputation on the line,” he said.

Smith’s 53-year-old partner, Edward Miller, added: “I supervised people but I never felt the level of responsibility that I do now. Before, I could hide in the system.”

USC’s Buskirk contends that the average salaried worker, particularly one from a large corporation, faces other adjustments upon entering the world of the self-employed.

“In a new, small business, you don’t have support staff to do research and other tasks. You don’t even have time to operate through memos and reports,” he said. “There’s a whole new way of doing things.”

And that usually means the entrepreneurs learn to do it for themselves.

Versatility a Factor

When George Munger gave up his career as a parking lot designer to open the Perfect Pan restaurant and cookware shop in San Diego, there was no extra money from the second mortgage that he and his wife, Piret, had gotten on their home to hire professional help.

So Munger applied his design talents to laying out the store, and Piret, for whom the business is named, used her public relations experience to come up with her own logos and advertising copy.

“You have to know how to do a lot of things because you can’t afford to have them done for you in the beginning,” Piret Munger said. “And if you don’t know how in the beginning, you have to be willing to learn.”

The difficulties of starting a business from scratch prompt many would-be entrepreneurs to buy franchises. Although franchisors generally give them some training, the education is uneven and offers no guarantee of success.

Robert Kley, a San Diego consultant who helps match would-be business owners with franchises, urges a careful reading of the Uniform Franchise Offering Circular, a detailed, 23-point document detailing the relationship between the two sides.

Even following that sort of advice, many new entrepreneurs flop. Four years ago, Richard Lyneis, a 47-year-old Riverside newspaper reporter, opened a franchise computer software store with his $100,000 retirement nest egg and what he now describes as a “know-it-all” attitude.

“I had made some good investments in the stock market and I got carried away with the sense of entrepreneurship,” said Lyneis, who has since resumed newspaper reporting in Albuquerque, N.M. “In my 25 years of journalism, I thought I had learned not to believe what I read in press releases, yet that’s exactly what I did.”