I want to be my own boss.
How many of you have entertained that thought throughout your working life? Chances are, many. Entrepreneurship has been riding a big wave in recent years, and the Great Resignation gave rise to a surge in start-ups.
Yet, a lot of people who dream of being their own boss, enjoying that independence and eventually selling their business for a lucrative sum, never take the leap, for a variety of reasons. One reason is it’s a lot of work with significant risk. It’s a bit too far out of their comfort zone. Another is they reach a point where they think they’re too old.
Well, if that’s you, think again. Even if you’re in your 50s or 60s, it’s never too late to pursue your entrepreneurial dream. A study shows people in those age brackets who start businesses succeed as well or better than younger entrepreneurs.
Older people who enter the entrepreneurial world have some advantages:
•Life experience with the ups and downs. This prepares them to stay poised, focused and flexible during the inevitable roller coaster that entrepreneurship can be.
•Leveraging relevant career experience. The number of years one spends in the same industry as the startup is predictive of the company’s future performance.
•Tapping into a wide network. Over the decades they have built relationships with trusted advisors, friends, colleagues, and clients who can help with the planning, strategy and scaling of the business.
But while those assets bode well for those middle-aged and up who are considering embarking on the entrepreneurial journey, there are precautions that need to be followed before taking the leap:
•Assess the risk. Business almost always involves financial risk. Some people are big gamblers; they take huge swings and strike out often in pursuit of a home run.
People like me approach risk from a different angle, as a calculation. If a risk is huge but comes with a big upside, I’m suspicious but interested. And I’ll follow that interest until the riskto- reward relationship either becomes untenable or irresistible.
Vet your idea with trusted sources. Thoroughly research the market, including all the competition. What differentiates your product and/or services? Does what you offer solve a problem? Can you scale the business? And never forget the exit strategy. Does the business have the potential to create a significant windfall for you when you sell it?
•Analyze your financial situation. Do you have the complete financial picture that is essential to affording the entrepreneurial opportunity, including the costs of daily operations and future upgrades, while providing you sufficient fallback insurance if the venture fails?
Bottom line: You don’t want to put big chunks of your retirement funds at risk. It may be tempting to tap into them, but as an older person you likely won’t have enough time to build your account back to where you need it for retirement.
Regarding your savings, it’s not wise to pour the majority into your new business. Failure rates of startups are high, so if you’re going to take the leap into entrepreneurship in your 50s or 60s, it’s advisable that you have a nice cushion in your savings – and not touch a big portion of it. That way you can land softly in the event the business doesn’t work out. Ideally, when starting a business you’ll have at least three years’ worth of savings that you can devote to expenses related to the business, while still leaving most of your savings untouched.
Other items on your financial checklist before starting a business: pay down debts and eliminate what you can, especially high-interest credit cards; minimize your overhead business costs and invest judiciously in the star t-up-related items you need.
•Be open to mentoring. Don’t be too old or proud to lean on the knowledge and guidance of someone who can help you. You’ve worked long enough to know that there are a lot of things you don’t know. Understand the value of expert advice. Seek out people who are already in the business you want to be in. Make connections in your field with people that you trust and respect. Those relationships are a great source of advice and inspiration. A trusted mentor will help you as you navigate the challenges
•Be all in, but have a contingency plan. Hope for the upside, but plan for the downside. Nowhere is this more relevant than when you jump into entrepreneurship in a later stage of life. If you have a contingency plan and make it a priority to evaluate opportunities and decisions with this mindset, you’ll help yourself avoid a lot of unnecessary heartache and stress.
Be prepared, and prepare your family, for the time commitment. In the beginning of owning and running your business, being your own boss isn’t everything it’s cracked up to be. You may work double the hours you did weekly during your career working for someone else. It may take a few years before the business is running smoothly, and you have found reliable workers who can grow with the company, allowing you to delegate and basically let others run the daily operations. Until then, it can be a tough journey with a huge workload that impacts not just you, but your family, your health, and your lifestyle. Don’t let your age stop you from starting a business. By having an idea that you and those you trust believe in, by planning properly, and by being prepared for everything from family dynamics to finances, you’ll give yourself the chance to live your long-held entrepreneurial dream.
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