If you're over 50 and looking to start down a new professional path, then what better time to consider starting your own business?
That suggestion may run counter to the stereotype of the entrepreneur as a young risk-taker, but a volatile stock market in recent years and a scramble to rebuild retirement portfolios are fueling a post-retirement entrepreneur boom.
And that boom can mean a new source of achievement and satisfaction, provided you consider a few special strategies and implement these small business tips.
Bringing your A-game.
First, know that you're not alone. Of all age groups, entrepreneurship growth was highest among 45- to 54-year-olds in 2011, according to a report by the Ewing Marion Kauffman Foundation.
Nor is that growth borne exclusively of bad news. Older entrepreneurs not only bring greater experience to the table than their younger counterparts, but lengthening life expectancy lets them apply that wisdom over a longer period of time.
Age as a competitive advantage.
Make certain you make the most of the contacts and networks you've built up over the years. That can prove particularly valuable when partnering to obtain skills and experience you may lack, such as legal, accounting or technical services.
That segues to an essential overriding point: rather than seeing your age as a detriment or some sort of obstacle, treat it as an advantage–not merely from the standpoint of experience but also financially. Compared with cash-starved young entrepreneurs, older people who start businesses often have substantial savings they can tap into.
But, that doesn't mean you can go overboard. Take a thoughtful look at start-up costs, your competition and your comfort level in putting your savings on the line. Take into account the fact that it takes most new businesses at least three years to break even.
As with any entrepreneur looking to apply tips for small business owners, older people who start their own business would do well to keep expenses in check, particularly at the very beginning. If you can, work from home, and use accounting software for small business to keep tabs on where your money is going. If you do require some sort of office space, consider sharing, which lowers the cost of rent, utilities and other business expenses.
It's helpful to identify a cutoff point – a number beyond which you won't be willing to continue to pour money into the business. That way, you can avoid compromising your retirement or other financial goals.
Sticking with it for the long haul.
It's also important to consider what sort of business you want to get into. First, choose a business that requires a level of energy and commitment you're able to bring to the venture. If you try a business that's too physically demanding like a retail business where you have to make a dozen or more deliveries a day, or one that requires a minimum of 60 hours every week, you may simply be taking on more than you can reasonably handle.
Additionally, make sure the business is one for which you have genuine passion and enthusiasm. For one thing, that makes the necessary commitment and workload a source of pleasure rather than an unpleasant grind. Additionally, starting a business at this stage of life is the perfect opportunity to do just what you want to do rather than working on something that you have to do. Choose wisely and your business may prove to be every bit as emotionally rewarding as it is financially.
“Jumping Into the Entrepreneurship Game Late: Small Business Tips for Retirees” was written by Jeff Wuorio.
The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on your taxes, your investments, the law or any other business and professional matters that affect you and/or your business.