MIDLIFE ENTREPRENEURSHIP: Starting a New Business at 50+
Many of us over the age of 50 are looking at the next chapter in our lives and are opting to start a new business as we retire or transition out of our former careers. According to a recent research report by Paychex, the payroll and benefits outsourcing supplier, as of the first quarter of 2018, not only was small business entrepreneurship in the U.S. near its best pace since the recession, but the report also revealed that the number of entrepreneurs over age 50 is surging, having increased by 50 percent since 2007.
That same report shows that people over 50 who are starting a business say they’re satisfied to grow their new business at a manageable rate and are striving for a business that’s comfortably profitable rather than the rapid growth and profitability goals of younger entrepreneurs. Maybe you’re looking to supplement your retirement income, turn your hobby into a money-maker, or finally fulfill that entrepreneurial bug you’ve always had.
The Paychex report confirms what I’ve witnessed in recent years. Although I work with business owners in all age groups, I’m working more and more with people over 50 who are starting new businesses. It’s truly never too late to become an entrepreneur and midlife entrepreneurship can be fulfilling and profitable if you plan carefully. There are some important factors to consider if you’re contemplating a new business at midlife:
1. You’ll have fewer years to build your business so your strategy should involve starting with the end in mind. Do you plan to sell the business someday, pass it down to a family member, hire someone to manage it for you in a few years, or simply shut it down when you’re ready to fully retire? Planning for your exit strategy while building your business will impact other important decisions you’ll need to make along the way. If you’re thinking about starting your business with a partner, good documentation and exit planning is even more important.
2. It’s been said that any worthwhile venture involves some level of risk, but it’s important to manage that risk to the best of your ability:
3. You’ll need to obtain the right kind of support – seek the assistance of a good accountant, lawyer, technical people who can help with websites and social media campaigns, virtual assistants, and the like. It’s important to evaluate the skills and strengths you bring to the business, as well as the areas in which you need help. There are lots of great sources for finding freelancers who can help you close the knowledge gap and stay ahead of the curve while containing your costs.
As more adults retire as entrepreneurs, the number of successful business owners over fifty will continue to rise. Most have better access to credit, more extensive work and life experience, and they also embrace technology, getting help where needed, when it comes to running their businesses.
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That same report shows that people over 50 who are starting a business say they’re satisfied to grow their new business at a manageable rate and are striving for a business that’s comfortably profitable rather than the rapid growth and profitability goals of younger entrepreneurs. Maybe you’re looking to supplement your retirement income, turn your hobby into a money-maker, or finally fulfill that entrepreneurial bug you’ve always had.
The Paychex report confirms what I’ve witnessed in recent years. Although I work with business owners in all age groups, I’m working more and more with people over 50 who are starting new businesses. It’s truly never too late to become an entrepreneur and midlife entrepreneurship can be fulfilling and profitable if you plan carefully. There are some important factors to consider if you’re contemplating a new business at midlife:
1. You’ll have fewer years to build your business so your strategy should involve starting with the end in mind. Do you plan to sell the business someday, pass it down to a family member, hire someone to manage it for you in a few years, or simply shut it down when you’re ready to fully retire? Planning for your exit strategy while building your business will impact other important decisions you’ll need to make along the way. If you’re thinking about starting your business with a partner, good documentation and exit planning is even more important.
2. It’s been said that any worthwhile venture involves some level of risk, but it’s important to manage that risk to the best of your ability:
- You’ll want to minimize the financial risk you incur in starting your business. You may want to avoid business ventures that require a substantial initial investment because it takes so many years to recover that investment. You may also want to explore some of the many funding options available these days so you don’t need to dip into your retirement savings. Whatever option you choose, it’s important to not overextend yourself.
- You’ll want to take measures to minimize legal risk with your new business. First and foremost, you should never conduct business as a sole proprietor. Limit your personal liability exposure by doing business as a limited liability company or corporation. Getting your legal documentation in place early will also help minimize risk.
- Do business using good contracts that allow you legal recourse against clients who don’t pay, vendors and other parties who don’t deliver, and protections when things don’t go as planned.
- If you’ll have business partners, it’s vital to establish an operating agreement and buy-sell agreement to document the details about your partnership, address how the business will be operated, what happens if one partner wants out or passes away, and how you'll deal with disputes between the partners.
- Protect your trademarks and intellectual property (IP) by registering them with the state you're doing business in and possibly with the U.S. Patent and Trademark Office. If you have developed IP such as a product, design or concept, it's a good idea to license the use of that IP to your company or to any other parties you allow to use the IP. .
- It’s also important to obtain sufficient business liability insurance.
3. You’ll need to obtain the right kind of support – seek the assistance of a good accountant, lawyer, technical people who can help with websites and social media campaigns, virtual assistants, and the like. It’s important to evaluate the skills and strengths you bring to the business, as well as the areas in which you need help. There are lots of great sources for finding freelancers who can help you close the knowledge gap and stay ahead of the curve while containing your costs.
As more adults retire as entrepreneurs, the number of successful business owners over fifty will continue to rise. Most have better access to credit, more extensive work and life experience, and they also embrace technology, getting help where needed, when it comes to running their businesses.
More helpful articles