Being an entrepreneur at any age comes with risks and payoffs. In today’s worldwide retirement crisis, it makes complete sense that seniors are showing real entrepreneurial spirit by setting up businesses.
However, do seniors experience unique challenges in this regard?
In this day and age, the rules have changed. The retirement age needs to disappear into extinction – in other words, go the way of the Dodo bird. Research shows that throughout the ages, you worked until you died, or until you couldn’t work any more. In 13BC Augustus paid Legionnaires a pension.
In 16AD Britain did same for their military officers. In 1684, the first civilian public servant got pensioned. The popular theory is that the Retirement concept originated in 1881, the brainchild of Chancellor Otto van Bismarck in Germany.
He introduced a well-orchestrated social insurance called the Reichstag social pension to assist the finances of nonworking older Germans. Initially 70 was the magic number chosen by Bismarck as the retirement age. This was changed to 65 sometime after Bismarck died.
Today, 65 is the new-55. 65-year olds have a zest for life, plenty of stamina plus in many cases the inclination and the necessity to work. So it’s a hard call having your retirement age dictated to you.
In this country especially, 94% of South Africans need to augment their meagre pensions, particularly as one has to contend with an exorbitant cost of living that rises on what seems like a daily basis. And don’t forget that this is the time of life that many people can have the opportunity to embark on their second careers by fuelling their passion, work on their own terms, set their own schedule and/or use their skills for the greater good.
Regrettably, South African research is thin. However, American research and specifically the Kaufmann Foundation’s annual index of Entrepreneurial Activity demonstrates that the number of older American entrepreneurs is exploding. In the UK, research shows that 332,000 Britons aged 65+ started their own business in the last 12 months. There is no reason to think that the trend should be any different in this country.
Seniors worldwide are showing real entrepreneurial spirit by setting up businesses despite the failure of banks to lend them funds.
Is it foolhardy to start a business when you are a senior?
Research shows that people who are in the age bracket 55 to 64 have a higher rate of entrepreneurial success than those aged 20 to 35. 86 year old American, Bill Zinke puts this into a nutshell: “I believe that entrepreneurship is a particularly good fit for the older generation who have oodles of experience, knowledge, and skills. Which is why older people who create new businesses have a better rate of success in comparison to the younger generation”.
Senior entrepreneurs will go through the same challenges as their younger counterparts, but there are some unique challenges as well. And so, if you are a senior entrepreneurial wannabe, here are hints and tips to consider before you embark on what could be the journey of a lifetime.
Do you have a good business plan?
Does your idea solve a problem? No idea is too odd to find success. Is there a need for your product or service? Research your idea thoroughly and look at your competitors to see how they are doing. A good business plan will assist you in mapping out how to start and run your business successfully.
Building a business which is fuelled by your passion is a necessity – without it, you may battle to get through the highs and lows and this could affect your business overall.
Related: Free Business Plan Template Download
Evaluate your skills
If you need to beef up your business acumen – do it! It is critical to have the necessary skills in order to run your business? It’s all very well having the passion, and you can turn passion into profit, but you need the capability too.
If you don’t have the skills, another option is to outsource certain areas if you can afford it, or bring in talent to assist with the tasks you are not able to do.
How will you finance your start-up?
Number one rule – don’t gamble with your nest egg. Start with minimal investment. Consider how you will get funding or attract investors. If you can’t afford it, don’t invest money in a business and most importantly, use business revenue to grow your business – not your retirement savings. Understand the financial risks when undertaking to start a new business in retirement.
Learn to love technology
Don’t be challenged by technology – it’s easy (and addictive!) once you know how! Your mobile device could be your new pocket office! You will need to get on top of social media, online commerce, website management and other technical skills.
There are so many places out there that offer local courses or better still, get a grandson/granddaughter to teach you. Social media is most effective when it comes to word-of-mouth marketing.
Beef up your business acumen online through podcasts, webinars, e-books and YouTube videos. It actually starts becoming fun!
Use freelancers initially
While you are growing your business, consider looking for talented, independent contractors who can assist you with short- or long-term projects – a great way to assist you in managing costs in the beginning.
Use your network and connections
You probably know a lot of people, having been in the world of work for quite some time. Ask your connections in your network to assist you by giving you immediate access to potential customers – this will help you in the first instance to get your business off the ground.
Look after your assets
Protect your personal assets at all costs. Structure your business in such a way, that if you go down the road of failure, this does not impact on your precious retirement savings.
Don’t spend unnecessarily
Be frugal. The biggest and the best is completely unnecessary when it comes to office equipment, cell phones, websites or office space. Tune your mindset in to start small and grow with the business.
You thought you had the most challenging job of all in corporate?! Think again – running a business as a senior entrepreneur will very likely be the most challenging job of your life and it is probable you will need to commit to working harder than ever.
Align your business goals with your retirement lifestyle and ensure that this is something you want to do and you have the time to do it.
It is vital to construct a balanced approach to your life and time in retirement. If you battle with this, employing a business coach could go a long way in assisting you realise your goals.
Do you have the physical stamina to start a business?
Check out your health thoroughly before you embark on starting a new venture. Ensure you are in good shape to keep up with the demands of a new business especially during the start-up period. Do not let stress further impact your health.
Starting and running a business in retirement is not for the feint-hearted. It’s a long, tough road and needs dedication, time, energy, patience, practice and money to succeed. It can take 1000 days or 3-5 years for a new business to become profitable. Senior entrepreneurs should start small, dream big and be willing to charter unknown territories. Stay young at heart, take on the daily challenges and be open to new ideas. Be a risk taker!
You will find that running a successful business is one of the most rewarding things you can do – physically, mentally and financially. Loving your work is key! Find something you would love to do, and don’t allow fear to stop you from achieving this dream, no matter your age. Viva Senior Entrepreneurs!