Older Entrepreneurs
March 21, 2006
This trend is not surprising, actually. As the Baby Boom generation ages, and as life expectancy increases, older Americans are finding that they have the time, energy, desire, and sometimes need, to start their own business.
Certainly, there are other reasons fueling this trend:
Corporate layoffs tend to affect employees over 50 more, for a variety of reasons, not the least of which is that they are paid well.
Being laid-off after 50 means it will be more difficult to find employment again.
By 50, workers have gained skills, both broad and detailed, that are transferable to new endeavors.
Not a few older workers still need to augment their retirement and/or Social Security.
But, while there are ample, excellent reasons for starting a business when you are over 50, it must be done right, and with caution. The fact is, starting a business when you are older is a bigger risk than starting one at a younger age:
When you are over 50, the only capital you may have to invest is your retirement, and risking that on an entrepreneurial venture isn't the best course of action.
If the venture fails, not only could that be emotionally devastating, but recovering financially from such a set back at that age would be difficult.
It is for these reasons that you may want to consider either buying an established business, or a franchise. One thing established businesses have in their favor is a track record; you can easily find out how much money they made the last few years and thereby have a pretty good idea about how risky the investment actually is.
Similarly, a franchise tends to be a less risky investment than a brand-new startup because the whole idea behind a franchise is that the franchisor has developed a success system that you can duplicate.
In either case, the important thing is to do your homework before buying -- speak with the business' employees and customers, talk to other franchisees in the system, and so on.
Alternatively, if you do want to start a business from scratch, keep these pointers in mind:
Pick something you know: Becoming an entrepreneur later in life is not the time to be learning whole new industries. Instead, pick an industry that plays to your strength -- your experience.
Pick something you love: As with any new entrepreneurial endeavor, picking a business you love -- something you would enjoy doing every day -- is one key ingredient to staying interested and motivated.
Pick something needed: This is a bit trickier, but maybe the most important success ingredient of them all. You need customers, so choose a business where there is a clear need. Starting a business after 50 is not the time to be too innovative.
Bone-up on technology: Technology has transformed small business -- forever and for better. So make sure you are up to speed on all of the technological opportunities available to help you run your new business.
Don't bet the bank: All of this new computer / Internet technology also means that there are numerous businesses that you can start that do not cost a lot of money. Selling items on eBay for instance is easy, inexpensive, and potentially lucrative.
Starting a business is fun, no matter your age, so don't be afraid to try, just be prudent.
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Today's tip: The American Association of Retired Persons (AARP) has some online resources available to help you make the self-employment decision. You can access it at http://www.aarp.org/money/careers/selfemployment. Also, check with SCORE.org.
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