7 Steps to Starting a Business After 50
Got an idea you'd like to turn into reality? Follow these recommendations.
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The New Retirement
Thinking of starting a business? You’re not alone. According to The Kauffman Foundation, an organization that studies entrepreneurship, the age group starting the greatest number of new businesses? Those 55 to 64.
“When you look at the wealth of experience people over 50 have garnered over the length of their careers, it sets them up perfectly for starting a business,” says Marva Goldsmith, 54, the author of Rebranding Yourself After Age 50.
Not only that, but the over-50 set is looking differently at the retirement years, says Michael Chodos, associate administrator for entrepreneurial development with the United States’ Small Business Administration. "Folks are coming into their second acts healthy, with vast experience and see another 30 years in front of them. They’re not satisfied with the definition of retirement as being 'done,'” says Chodos.
Want to launch your own venture? Follow these tips from experts to get your business up and running.
(This article appeared previously on Grandparents.com)
1. Identify Your Market
Whether you plan to bake cupcakes, be a consultant or manufacture a product, the first questions you must answer are the same, says Chodos.
“Who are my customers and do I have a product or service that they want and are willing to pay for in an amount that my sales will be greater than my expenses? Until you have a really solid sense of how your business will succeed, you need to keep answering those questions… Research, analysis and testing beforehand is heading you down the path to getting it right,” says Chodos.
Really hone in on what you’re selling. “Describe as precisely as possible what you’re going to sell,” advises Jeff Williams, CEO and chief coach of Biz Starters, a company aimed at helping people over age 50 start businesses. “Many people come to me and they want to sell two or three different things all at once. It doesn’t work. You need to be specific."
2. Calculate Your Start-Up Costs
Many businesses today start from right inside the home without a lot of cost for equipment or rent. But there are other factors to consider, Chodos says.
How much will it cost to start your business and to run it for its first year? Will you need to invest in inventory? What will the costs be for advertising? Is there equipment you need to purchase? Will your electric bill rise? Ask yourself what you’re willing to invest, what you might have to borrow and how much you expect to make from sales.
If you can’t answer those questions yourself, consult with an expert.
3. Have a Marketing Plan
“This is the most important part of your business,” says Williams. A marketing plan must answer the questions described in the previous slide, but also must help you identify how you’ll find your customers. “Are they on mailing lists? On the Internet? In industrial listings?," says Williams. "This is the usually the most difficult part for people, because if you previously worked for a corporation, the company brought you the customers. Now you must go out and find them.” Research, networking and word-of-mouth are your three key approaches. For information on how to write a marketing plan, check out this information.
4. Use Your Contacts
“We’re all at square one when we start a business,” says business consultant Nancy Michaels, founder of The Grow Your Business Network. “The great news is that by the time you’ve hit 50, you should have some connections in the world. Tap into that and let people know what you’re doing. They can help spread the word for you.”
Start by announcing your business to all your email contacts and make a simultaneous announcement on LinkedIn, says Michaels. “Tweet about it, and put it on Facebook and maybe even make a video so you can post it on YouTube,” she adds.
If your business warrants it, consider an open house and invite your contacts. Depending on your business, it might make sense to start locally rather than trying to reach a national market immediately, but first evaluate who and where your customers are.
5. Become an Expert
If you are offering a service, you are more likely to be hired if people feel you know what you're doing. Establish a professional-looking and accessible website that boasts “strong, selling-benefit oriented copy,” says Williams. Have friends or business associates critique it and make sure the site highlights your accomplishments and abilities.
And get the word out about yourself. Write articles and other content related to your business and post them on free article sites with a prominent listing of your web address, Williams says. He also suggests you regularly send out publicity articles talking about key phrases for your business.
Once you’ve done this, you can speak to civic groups or other organizations to further establish your expertise.
Note: Approach trade shows with caution. Williams says it can be an expensive undertaking with not that much reward. Better: Once you have landed a few customers and feel the business is rolling, a trade show might be a good next step.
6. Get to Know Social Media
If your business is consumer-based (you’re selling cupcakes, for example), use Facebook to promote it, says Williams. If it is a “b-to-b” business, one that sells services to other businesses, use LinkedIn to promote it. You can use both platforms to make announcements about your business, to remind consumers you are there or to hang out your shingle, so to speak, so people passing by will notice it.
7. Set a Timeline
By the six-month mark, if you’re not seeing some steady income, it doesn’t mean you’re an outright failure, says Williams, but maybe you’re not getting your message out. You’ve got to continue to tweak it.
“If you are honest and accurate in your revenue model and you are not making money, then you usually need to go back to one activity — sales prospecting,” Williams says. “Ask yourself: Are you doing enough of it and is it well-focused on the people you are trying to reach?”