As the first wave of baby boomers begins to retire - and with life expectancy rates at all-time highs - many retirees are thinking about how to fill their sunset years. Far from the familiar adage of a rocking chair on a porch, statistics show that in the United States, 55-64 year-olds are starting companies at nearly the same rate as their younger counterparts, according to the Kauffman Index of Entrepreneurial Activity 1996-2006 by Robert W. Fairlie.

Deciding whether to become a small business owner while in retirement is not a decision to be taken lightly.

The following tips can help navigate the process of becoming a small business owner and get you on your way:

Do your homework

Consider starting a business that capitalizes on your existing experience and knowledge. For example, if you worked in the restaurant business, consider opening a catering firm. This will help ensure you know what you’re getting into. More importantly, lenders are more likely to support your venture if you can demonstrate knowledge of the industry.

Simply knowing an industry, however, isn’t enough to ensure success. There is a world of difference between working in an industry, and owning a business in that area.

Reflecting on questions such as: Will you need employees? How will you establish credit? What business and zoning laws will you need to consider? There are a wide range of resources available to help you get started – books and business publications, classes and seminars, and your local chamber of commerce.

Determine if you’re ready

Talk to other entrepreneurs about the responsibilities and realities of business ownership. Do you have what it takes to be a successful business owner? The U.S. Small Business Administration recommends asking yourself these questions:

• Are you a self-starter?

• How well do you get along with different personalities?

• How good are you at making decisions?

• Do you have the physical and emotional stamina to run a business?

• How well do you plan and organize?

• Is your drive strong enough?

• How will the business affect your family and other close relationships?

It’s also important to consider the realities of starting a small business: Not only will you continue working, but it’s possible you will be working harder than ever before.

Write a business plan

Once you’ve decided owning a business is what you want to do, write a business plan to serve as a "road map" into entrepreneurship. A business plan helps you put all the pieces together to plan how your business is going to operate. The plan should include a description of your business, as well as your plans for marketing, financing and management.

Don’t know where to start? There are many resources that can help you draft a business plan, including the Service Corps of Retired Executives (www.score.org), the Small Business Administration (www.sba.gov), and the National Federation of Independent Business (www.nfib.com).

Consider your finances

The greatest single reason new businesses fail is undercapitalization. It is particularly important for retirees to be mindful about where they will acquire capital. Also be aware many businesses aren’t profitable for several years. Be sure to budget your lifestyle so you have enough money to live on and have funds to run your business.

The financial services industry has developed innovative, flexible funding alternatives for business owners. Many institutions support agencies that help start-ups and small companies.

Have a plan for business succession

It may seem presumptive to plan for business succession before you even turn a profit, but it is important for all entrepreneurs, regardless of age, to have an idea of how they’ll handle the time when they no longer want the day-to-day challenges of running a business. In addition to a business plan, it is important to have a financial plan for when you stop working, including a designated successor.

More than 400,000 new companies are started each month in the United States. With the right preparation, you can add your own business to that count, even during your so-called "retirement" years.

Contact Kevin Heath, a Wells Fargo Business Banking manager, at Kevin.d.heath@wellsfargo.com or (520) 792-5352.