The economy, job loss, increased competition for promotions and new jobs all of these contribute to the trend of older people (55+) making the decision to start a business. The reasons differ from life-long dream to career necessity (no job or too much competition for existing jobs) to not being ready to be retired.
Older entrepreneurs have time and experience on their side. On the other hand, they may face learning curves when it comes to technology and social media (Facebook, Twitter, LinkedIn, Plaxo). Being older may also mean that your experience is as a worker, not as a business owner. The three to five year period before the business is generating sufficient funds to provide you with a “market rate” salary may be a difficult transition.
Making money takes money. Older people may have access through savings, retirement funds, and severance packages that will enable them to get started. They may also have fewer demands if the house is paid off and the kids are out of school. They may also have a spouse that is working and can cover the daily living expenses.
For the current corporate workers, the time to begin the transition is while you still have funds and when possible before you quit your day job. Before you leave your day job:
- make decisions on what type of business, products/services, location and so on before you leave your day job;
- investigate your options for starting the business
- consider a second job or volunteer to get experience
- learn basics like accounting, spreadsheets, and other software.
- write a business plan
There are risks to starting a business. You may have a great idea, but it doesn’t make a great business. You may have a great idea and a business, but lots of competition. If you need to borrow money (credit cards, loans, etc.), a personal guaranty of that debt will be expected.
The rewards include the sense of accomplishment when you get your first customer. Make the first profit and see the business grow. The rewards also include the financial value and profits of the business. You also get the freedom to create an environment that works for you with flexibility to set your schedules and do business your way.
The biggest start-up mistake is not having a plan or an overly optimistic one. Success is built over time. How much money and time depends upon how you intend to go into business – a franchise has a bigger upfront and on-going cost than running a home-based business with a website, a phone, and a computer. Don’t underestimate the cost and effort establishing a business. Be realistic. Expect the first 3 – 5 years to be lean ones. Those are the years to establish your credibility, capacity and visibility.
The best time to quit is when you have your plan in hand with answers to these key questions: What am I selling? How do I know this is a good idea? Who is my customer and how will they find me or will I find them? What do I need to start the business – computer, phone, internet, e-mail, etc. How much money do I have? How much time can I devote? And most of all, know what you are willing to sacrifice while you are building the business – vacations, time with family, buying a new car, etc.
Older can be wiser when you decide to start a business. There will be no “ideal” time when everything is perfect. Pick a good time when you have realistic objectives and perspectives on what it will take. And one more point, young or old you will make mistakes in your business. They will just be different ones and they are painful, but rarely fatal to your business.