With all the consolidation going on, I'm getting worried about my long-term prospects in the banking industry. So I'm starting to think about possible alternatives.

I've always had it in the back of my mind to start a small business. Just how risky would that be?

-- Undecided

Dear Undecided:

Very.

The idea may sound alluring, given the uncertainty of today's executive suite. But beware. Some 87,000 businesses failed last year, and the vast majority were small ones, according to Dun & Bradstreet.

Be prepared to give up some basics that make corporate life attractive, such as a steady pay-check, insurance benefits, and a support staff.

"If you're a big-picture strategic thinker and hate the idea of standing in line waiting to buy stamps, stick with the corporate world," says one former banker who did make a go of it.

Drawbacks

Another thing to think about: Good ideas are a dime of dozen. You have to look for a market demand, not just a market need, says Sterling Dimmitt, who counsels budding entrepreneurs in New York at the outplacement firm of Lee Hecht Harrison.

And perhaps the most important factor to weigh is whether you really want to give up a career you've spent years developing. An alternative is moving to a field related to banking: That would give you more flexibility, making it easier to jump back if the right opportunity came along.

Now if those considerations don't scare you off, maybe you are cut out to give it a try.

Some bankers, of course, have left big business and succeeded. Their advice: Revolve your business around something you have a passion for, cut your living expenses, do plenty of research, and start small.

Designing Woman

Catherine Reurs followed that blueprint. Amid layoff rumors, she left her job as a second vice president of Chase Manhattan in London to start a business designing needlepoint kits. That's right, needlepoint kits.

She also took on four part-time bookkeeping jobs for small arts-related businesses. That not only helped her pay the bills, but also gave her a firsthand look at how a small business operates.

Her apprenticeships paid off. She started by designing needlepoint kits for other producers.

Now, five years later, she designs, manufactures, and markets six kits through her own mail-order catalogue, Catherine Reurs Neddlepoint in Rowayton, Conn. Her kits are sold in 120 needlepoint shops in the United States and Canada. Her book "In Splendid Detail: Needlepoint Art" has sold 14,000 copies.

All this happened because of perseverance and a seven-day-a-week work schedule. "But you don't mind doing that when you're doing what you love," she says.

Her advice to bankers contemplating a similar move:

* Do plenty of research, but don't let well-meaning friends talk you out of it if the idea feels right.

* Believe the experts when they say it takes a minimum of three years to get a new business up and running.

* Write a formal business plan. "My business would be further along if I had," she says.

* Do something you love.

For Lindsay Copeland, leaving banking made him apprehensive.

"I always thought I needed the security of a steady paycheck," he says. "I didn't know I was an entrepreneur."

But in 1988, when he lost a banking job for the second time, he and his wife, Carol Goldberg, decided they wanted to run an inn.

He attended a seminar on inn-keeping and read up on the subject. Then the couple visited a number of inns, picking up tips along the way. Now they run the Maine Stay Inn in Kennebunkport, Maine.

Mr. Copeland says his banking experience has helped.

As a marketing/advertising manager he oversaw direct mail campaigns, promotional brochures, and newsletters, all of which he puts to use with previous guests.

And as a product manager at Bank of America, he learned about packaging. Hence such specials as a free night in honor of the Internal Revenue Service for a customer who books two nights on or around April 15.

Mr. Copeland's advice:

* If you're still working for a company, bone up on personnel procedures. When you run your own business "there's no one around to do the dirty work for you, like performing exit interviews," he says. So study up on documentation and legal issues.

* Learn the art of motivating workers. You may not be able to pay your employees well, but you can make it up in other ways. "Kill them with kindness," he says.

* Be prepared for hard, hard work. One reason the Copelands could cut expenses is that "we don't have time to go shopping or take vacations," he quips.

Randall Strossen, a former bank psychologist, says one key to successfully running a business is to start small. "You're doomed from day one if you start at the global level. Let things unfold. Give yourself breathing room and your ideas a chance to fly."

Mr. Strossen, president of Iron Mind Enterprises, Nevada City, Calif., developed his business from a freelance article he wrote about an Olympic weightlifting coach.

He then started writing a sports psychology column for Iron Man magazine. And he wrote and published a book called "Super Squats, How to Gain 30 Pounds of Muscle in Six Weeks."

He now runs a mail-order business selling weight-lifting equipment to customers in over 40 countries. His next move: starting a magazine.

What helped him was working for several years as a consultant. It's like a halfway step from the corporate world, he says, because consultants operate more entrepreneurially and have to rely on themselves for a lot.

And this advice: Learn how things get done at levels lower than your own in the company. Branch managers have a leg up when it comes to starting small businesses, because they run them every day.

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