Over 50 and thinking of starting a business? Now is a great time to do so. Entrepreneurs over 50 often have a higher chance of success than younger business owners, thanks to a lifetime of learning, experience, and networking.
However, there are risks to entrepreneurship after 50. In addition to the typical challenges of starting a business, older entrepreneurs may struggle to secure funding, face potential age discrimination, and risk a higher cost of failure since there is less time to recoup any potential losses.
If you’re starting a business after 50, here are five crucial steps to success.
1. Establish financing
Because the financial stakes can be higher for entrepreneurs who start after 50, it’s important to have a sound financial strategy.
Avoid tapping into important sources of funding such as your retirement account. Consider instead a small business loan, business line of credit, or commercial real estate loan. Having a longer credit history should make it easier to secure these forms of bank financing.
Other options include crowdfunding, capital investors, and, depending on the nature of your business, a small business grant. The U.S. Small Business Administration (SBA) also offers several funding programs to help small businesses and entrepreneurs get started.
Make sure your personal finances are in order before you start your business. Take a look at your expenses and find ways to reduce them. It is recommended that small business owners have at least six months' worth of savings as a buffer against financial risks, challenges, and setbacks.
2. Test the waters with a side hustle
Not sure if your business idea will work? Think about launching it on the side while keeping your full-time job.
Before you get started, check the legalities of your venture. Review your terms of employment to ensure your business idea doesn’t compete with your current company or create conflicts of interest. Consider the pros and cons of telling your boss about your side gig.
Learn about the tax implications of starting a business, including the impact of additional income on your tax position, making estimated tax payments, and paying sales tax.
If you form an LLC for your side business, you will also need to maintain compliance with the requirements of operating an LLC. For more information, see Can I start an LLC side business while employed?
3. Acquire skills and certifications
Launching and managing a business involves various responsibilities. In the beginning, you'll handle marketing, IT, project management, employee management, financial tasks, and more. Refresh your basic skills in these areas, and if certifications are needed, take relevant courses before leaving your current job.
The most valuable teachers are those who have walked in your shoes. Talk to other small business owners, find a mentor (SCORE is a good place to start), attend workshops and events, and get involved with local business organizations.
4. Consider a partnership
Older entrepreneurs have a mix of good and bad things going for them. They have lots of useful contacts and experience, which is great. But, on the downside, some people might wonder if they're fully committed. It can be tough for entrepreneurs over 50 to get investors interested, especially in tech. People might be skeptical that a company led by an older person is innovative.
Teaming up with a younger partner can help show that you are forward-thinking and committed to the future. A younger partner also brings different skills and perspectives. Together, your combined strengths will provide a significant advantage.
Don’t forget to create a solid business plan, which can serve as a roadmap for your business, as well as be used to get funding. For more information, see
- Writing your business plan
- Creating action plans: Operations and management
- Marketing plan component of your business plan
5. Be adaptable
Being adaptable will help you cope with the challenges and opportunities that business ownership will throw your way.
Lean on your own life experiences to navigate change and innovate accordingly. And, during uncertain times, pay attention to signs of change in the world around you. Understand these signals, and if needed, take quick action to improve or completely change your business model. Older entrepreneurs often come up with new and improved ways of doing things because they have a deep understanding of how their chosen industry works.
Conclusion
Don't let the challenges of starting a business after 50 hold you back. With thorough research, planning, and creativity, you can overcome potential barriers and succeed.
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