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Hey 50-somethings! Think you’re too old to start a business? Take that thought out of your mind right now. If you’ve spent a lifetime working and don’t want to spend retirement traveling the world, there’s still plenty of time to start a business. Plenty of 50-somethings have done it. So can you, but don’t jump in without a solid plan.
What Does Retirement Look Like?
Before you start a business, ask yourself what retirement looks like to you. If you’re not looking to “settle down” but you don’t want to work at the local grocery store either, starting a business may be the perfect next challenge.
But if you spent decades working hard, there’s a good chance that you have dreams of slowing down a little bit. Starting a business can take just as much or more time than your pre-retirement career but it doesn’t have to. Look for a business that fits your ideal retirement lifestyle. Assuming you saved enough to cover your projected retirement expenses, you are in a position to choose how hard you work.
As a freelancer or consultant, your overhead costs are minimal and you can work as little or as much as you would like. Opening a physical location with higher upfront and ongoing expenses may dictate your schedule more than you would like since you have a lot more bills to pay each month. Think through all of these factors when making plans.
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How Will You Fund it?
Time is certainly a factor but so is money. How will you fund your startup? Consultancy business may only need a few hundred dollars to get started but some business could have price tags into the millions.
First, using funds earmarked for retirement is a bad idea. You and your family will need those funds to cover living expenses after you no longer have the ability to work. And since there’s no guarantee that your business will succeed, you must have money set aside for living should the business fail. If you have excess funds far above your projected retirement expenses, use those funds.
It may be difficult to secure startup funds from a bank but the Small Business Administration has programs that may help you get a startup loan. As a person later in their years, you may have assets sitting in investment accounts, real estate, or an inheritance that younger entrepreneurs don’t have. Talk to your accountant before using those funds to finance a business.
You could also look for a partner or two that will help with financing and while it isn’t the best idea, many entrepreneurs get off the ground with loans from family and friends. There’s also angel investors and crowdfunding to consider.
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Do Something You Love
Experts advise being very choosy about your business of choice. Maybe you’ve had a hobby all of your life. Could you turn that into a business? How about something related to your previous career? You already know the industry, have a lot of contacts, and watched how others built a business in the industry.
If you’re looking to work in a new industry, spend a lot of time becoming an expert. Read about the industry, spend time with somebody already running the business you want to start, and talk to suppliers, sales personnel, and potential customers.
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Learn the Technology
Whether you’re a 50-something or 20-something, everybody has a certain degree of technology literacy. If you and computers have never gotten along well, you need to change that before starting your business. Every industry has their proprietary technology that every successful business uses. It saves time by making the business more efficient but there’s likely a steep learning curve. As an owner, you probably have to be the best user of the technology in your business.
Have an Exit Plan
There will come a time when you can’t work or no longer want to work, and as a 50-something, it will likely be sooner than younger entrepreneurs. You not only owe it to yourself but also the employees you may hire. They’re relying on you to feed their families so make sure that when you leave, the transition is smooth, orderly, and sets your business up for future success. Maybe you will leave it with a family member or a business partner. If you plan to sell it, give your employees plenty of notice or stipulate in the contract that employees will retain their jobs for a certain amount of time.
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Among the free resources available to you, The Small Business Administration has a page devoted to business owners over 50. There’s also SCORE, a free program that offers one-on-one mentoring, workshops, and plenty of other resources. The industry you’re considering entering will also have a trade organization full of resources to help you get started.
You aren’t too old to start a business but you should think about retirement. What do you want to do when you reach retirement age? If starting a business is in your plans, get started with the planning now. Some entrepreneurs may move from idea to opening their doors rapidly but taking time to consider all of the options and how they will affect your finances is generally the best idea.
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