Starting a business after age 50 involves many of the same considerations as any startup. You’ll need to develop a business plan, find financing and make your first sale. However, there are also some special issues to keep in mind.
What’s your goal? Are you starting a business to supplement your income after retirement? Do you want to turn a longtime lifestyle dream (such as starting a winery) into a business and finally have the capital to do so? Or have you been laid off from a job and need to generate your own full-time income? Whether your business is something you’re doing for fun, or you urgently need the income, will affect your startup decisions.
What’s your big idea? Many people over 50 fantasize about turning a hobby, such as pottery, baking or photography, into a business. A hobby can be an ideal foundation for a business you’ll be passionate about. However, it’s also important to make sure that there’s a market for what you want to do, and not let your excitement blind you to reality.
Another popular niche for over-50 entrepreneurs is turning your career experience into a business. For example, a former executive could start consulting to corporations in her old industry. A former magazine editor could begin developing online content for clients. In some cases, you may even be able to target your former employer or its customers as prospects. (First make sure you aren’t breaking any non-compete contracts.)
Providing convenience services for consumers can also be a good niche for a part-time business. For example, you might want to provide in-home childcare, pet grooming or landscaping services.
Last, but not least, consider online businesses. Starting a Web-based business helps keep your costs down and enables you to run the business from home. You can sell products online via your own website or on eBay, or set up a Web store on Amazon or Etsy (which focuses on handmade and crafts items).
What’s your risk tolerance? A twenty-something can start a business, fail and still have plenty of time to start over again. But when you’re over 50, your tolerance for financial risk is lower. Carefully assess how much you are willing to invest (and possibly lose).
How much time do you have? How quickly do you want to get your business up and running, and how much time and energy do you have to invest in it? Keep in mind that startups are time-consuming, and at 50-plus you don’t have the energy of a 20-year-old for all-nighters.
Buying an existing business or a franchise opportunity can be a smart way to go when you’re over 50, because getting either up to speed takes less time and energy than building a business from scratch. There are many franchises that specifically seek retired executives with business experience, and you can also find low-cost franchises for less than $20,000. Just make sure to do your homework and due diligence before making an investment in a franchise or existing company.
What do you want for your future? At 55, you may be content to put 60 hours a week into your business, but how will you feel when you’re 65 or 70? What if your spouse retires in five years and wants to start traveling six months of the year?
Try to start a business that can run without you so that you’ll have the flexibility to take time off if you want to. A business that relies solely on you doesn’t have longevity you will need to pass it on to heirs or sell it for retirement income. Taking on a younger partner can help you get more flexibility in your business and also give you the perspective of a different generation.
Where will the money come from? Tapping your retirement savings to start a business is almost always a bad idea. If the business fails, you’ve not only lost your business, but also your nest egg.
If you don’t have lots of startup capital, figure out ways to start your business more affordably. For example, instead of opening a pottery shop that requires a retail space, employees and ongoing rent, you can open an online Etsy shop to sell your pottery. Instead of opening an accounting office, run your business from home and meet clients at their offices.
Where can I get help? One of the biggest advantages 50-plus entrepreneurs have is their network of contacts developed over a lifetime. Don’t be afraid to tap into friends, colleagues and contacts of all types to get advice, assistance and referrals. Most people are only too happy to help.