The latest buzzword is “innovation”, but you don’t have to be young to be innovative – ask any ‘senior entrepreneur’!
Reaching the seventh decade is nothing like it was for previous generations. Improved medical technology and a better understanding of staying fit and healthy for longer is making a positive impact on the lives of many Baby Boomers, and the Australian economy. However, ballooning redundancies and the difficulties many older workers face in finding new jobs can make it a challenge for some to stay employed. But not all – many Boomers aren’t ready to hang up the tools yet and are setting out on their own. Welcome to ‘senior entrepreneurship’! Could this be you?
Starting a new business can be exciting, and also daunting. Sadly, 80% of new businesses will close their doors within the first five years. Here are just a few things you can do to tilt the odds in your favour.
Be honest with yourself
- What are your motives? Are you tired of working for someone else or are you driven by an idea for a fantastic new product or an enticing new service? Or perhaps you’ve been dreaming of turning a hobby into a part-time business as a way to ease yourself into full-time retirement?
- Do you have a clear vision of what your business will offer and a convincing way of communicating what it does? If not, get clear about what excites you. If you aren’t sold on how awesome your product or service is, why will customers buy it?
- Do you have what it takes? You may have fantastic technical skills or fabulous creative flair, but do you have the financial, sales and marketing skills and the discipline needed to establish, manage and promote a business? If not, can you afford to hire people with those skills?
- Will you know when to quit? Decide at the outset what goals you need to achieve to keep going. Throwing good money after bad will compound financial woes.
Do your sums
Some businesses can be set up on a shoestring. Others require a large financial investment. Mortgaging the family home, using a redundancy payment, or borrowing from ‘friends, fools and family’, are traditional ways of financing a new venture. Government assistance programs and crowdfunding are other options.
If moving from employment to self-employment, check for any implications for your life insurance and superannuation. The few years before retirement are important for boosting super savings, and contributing the proceeds of the sale of a business to superannuation can provide significant tax benefits. Make sure the business is set up so it can make the most of these benefits.
Do your research, seek advice
A wealth of information on starting a business is available online and in bookstores. Always rely on reputable sources, preferably those that have achieved the type of success you aspire to. Crowdfunding can be a valuable research tool to give you early feedback on your idea, but be aware it can increase the chances of unscrupulous people stealing it.
Get professional advice from your accountant and your lawyer. Share your plans with your licensed financial adviser and get a clear picture of how your decision could affect your personal financial situation.
The rewards
Be careful, but don’t be put off, for the rewards of creating a new business are many. One of the most gratifying is being able to look proudly at an enduring enterprise and say to yourself, “I built all this from nothing”.