Age shouldn’t hinder anyone’s dreams of starting their own business. These days, we’ve been seeing more and more encore entrepreneurs, also known as seniorpreneurs, chase their dreams and launch a business venture.
While we’d usually expect retired individuals to enjoy their post-corporate life, a lot of them actually pursue their passions and become their own boss after retiring.
Indeed, data shows that almost 54 percent of Americans prefer opening a small business rather than retiring. What’s more, encore entrepreneurs actually have a huge chance of being successful as they have the experience, personal networks, and financial wealth to back-up their start-up efforts — all of which make them very competent business owners. With that being said, we’ve listed below some crucial points that every entrepreneur should consider before starting their business.
Be Confident with Your Idea
Before starting your business, you should first assess, evaluate, and polish your business idea. If you’re an encore entrepreneur, chances are you’ve been mulling over a specific product or service to introduce to the market for a long time. To be more confident with your business idea, make sure it fills a gap in the market and offers something new to the table. This way, you can conquer a specific niche that hasn’t been taken over by similar businesses. Furthermore, refining your business idea also makes you more appealing to possible investors and partners as it shows that you’ve taken your time validating your idea to ensure its success.
Safeguard Your Finances
You shouldn’t risk your hard earned retirement funds on a business venture because there’s always a possibility that the business will fail. And if you’re not careful all your funds will be lost as well. As with any venture it is best to use funds that you can afford to lose. In this regard, you should create a clear divide between your business assets and your personal assets to protect your finances. One way to do this is to choose the right business structure.
Most new businesses start out as a sole proprietorship, which is the simplest structure, but this does put all of your personal assets at risk as they will be directly tied to the business. The key, then, to safeguarding your retirement savings is to have a structure that protects you. For new startups a limited liability company (LLC) is a good option. After forming an LLC your business becomes a separate legal entity away from your personal assets. There is also the added benefit of allowing you to choose how your business will be taxed. Many encore entrepreneurs, for instance, choose to be taxed as an S corporation. This is because being an S corporation allows you to pay out business income as a distribution, letting you avoid higher tax rates. So, when starting your business, be sure to safeguard your finances by making the right choice in business structure.
Seek Out Education and Training
Nobody’s too old to get the education they need to become a successful entrepreneur. In fact, it’s in your best interest to find the appropriate training or a great mentor to help you become a better business owner. For instance, you can look for financial advisors and business consultants that’ll help give you feedback on your business ideas and even guide you on starting your business. Besides that, you can also find free online business courses that are specifically made for encore entrepreneurs. Local community colleges also offer short courses on small-business topics, so be sure to check those too. By gearing up with the right knowledge and asking advice from experienced experts, you can better drive your business to success.
Embrace the Digital Shift
Let’s face it, not all encore entrepreneurs will know how crucial the internet has become to modern businesses. Today’s small businesses have a better chance of surviving if they have some kind of presence on the internet — whether it’s on Facebook or an e-commerce website. Being available online provides an unparalleled amount of visibility for your business, so you should make it a point to create online accounts in your business’ name. If you’re still a little unsure with how this works, be sure to talk to, or even hire, industry experts who know to navigate the digital sphere.
Create an Exit Strategy
An exit strategy is a critical component of any business. In your business plan, you should layout how long you are willing to wait for the business to achieve profitability and how much energy and resources you are ready to invest in it. Determine the point where you consider your business venture to be a failure and accept that it’s better to quit gracefully than waste money by pushing through. But besides failure, you can also choose whether to hand the reins to someone else or sell your company as an exit strategy. You have to understand that even if your business finds success, you should designate a point in the future when you will sell or close your business so you can finally rest and enjoy retirement.