Starting a business at any age is daunting, but choosing to do so after age 50 offers its own challenges and opportunities. The risk factor (in terms of time, money and effort) is as high as it is for an entrepreneur at any age. On the other hand, you have a depth of experience and knowledge that’s not present in most budding, 25-year-old small business owners.
If you’re considering a startup of some kind in your fifties or later, in retirement, be sure you can answer the following questions.
Are you prepared?
This is no time to jump into the marketplace just to see what happens. If you think you have a great business idea, test it against a thorough market analysis. You need to know who your potential competitors and customers are, but even more critically, if there’s likely to be a genuine demand for your groundbreaking product or service.
Before moving forward, put together a business plan. It’s not necessary to expend a vast amount of time on this document, as long as you can articulate your intended strategy and clearly define the scope of your intended sales, marketing and financing efforts.
Do you have passion?
For entrepreneurs aged 50 and older, there’s no getting around a simple fact: You’re just not as young as you used to be. Starting a business now will require the stamina to put in many long hours upfront—and for whatever reason, not everyone can meet the physical demands of hard work and lack of sleep. Are you prepared to be exhausted at the end of every day (for the foreseeable future)?
That’s why you must have passion for this new business. Making money can’t be your sole or even your primary motivator—since you’re unlikely to see any profit in the early stages. If you don’t feel a sense of urgency about the new business, it may be time to reconsider your future plans.
Have you looked at the costs?
Speaking of money, you need to fully understand and accept the potential risk to your life’s savings if your great entrepreneurial idea doesn’t pan out. Find an accountant experienced in new business ventures and realistically assess the likely startup costs. If dipping into your 401(k) or a home line of credit means putting your life savings in jeopardy, you’d better have an awesome idea and a stellar business plan for executing that idea. The best solution is to find others willing to invest in the venture.
How can you build on your experience?
On the plus side, you’re in a unique position to draw on a lifetime of experience. By now you’ve got a much better sense of your strengths and limitations than most people half your age, so you know where you can go it alone and where you should have a younger partner or employee to handle key areas of the hoped-for business.
Chances are, you’ve also accumulated a network of contacts who can help you on the way, either in terms of investing in the enterprise or steering you toward resources essential for future success. When the time comes to make your case, your experience and passion are great assets and serve as credentials to others looking for someone who knows their way around the marketplace.