Is Now Really a Good Time for Those Over the Age of 50 to Start a Business?
Today you hear more and more about people starting their own businesses. According to a study reported by the Ewing Marion Kauffman Foundation, adults ages 55 to 64 are the group most likely to do so.
The volatile economy and depreciated retirement accounts are just a few of the reasons some people who may have never before considered starting their own business are now doing so. They want to shore up their nest eggs, supplement retirement income or avoid returning to the corporate world for a job. But is now the right time to get started?
Well, it depends . . . on what type of business you want to start. But in general, for the types of businesses those 50+ years of age are starting, the answer is “yes.” Here are some reasons why:
- Opportunities are created by changes in the marketplace, which is definitely something we\’ve seen the last several years. Disruptions in the status quo create opportunities for the alert entrepreneur. One only has to look to history to see examples of companies that have started and flourished in down economies, including General Electric, McDonald\’s and Microsoft.
- Many Boomers are looking to start businesses that have low start-up costs. At 50-plus years old, they want to minimize their start-up investment and the financial risks associated with starting a business. Many self-finance their businesses. As such, tight credit in the current economy will not have the same impact on them as it will on business start-ups that require a lot of capital.
- Starting a business takes time. If you\’ve just retired or lost your job, time might be the resource you have in great abundance. By using your time to plan, research, develop and test the market, you will be poised to take advantage of economic growth as it occurs. Starting a business in a slower economy provides time for you to learn valuable lessons, gather information and establish a track record that will prepare your business for future growth.
- Customers are different. Loyalty to current vendors often loosens in changing markets as buyers look for better value and less expensive product and service alternatives.
- Your opportunity cost may be low. The opportunity cost of a decision is what is given up when you choose one alternative over your next-best alternative. For those who are retired or displaced from their job, their opportunity cost may be a round of golf or watching Oprah.
- Some business costs will be lower than in a thriving economy. This can be anything from employee costs (talented employees may find themselves out of work and willing to work for less), rent, office equipment and furniture, advertising and the like.
These are a few of the many factors that may influence your decision as to whether or not to start your own business. Only you can decide if the time is right for you personally. Consider this quote from Mark Twain, in which he comments on how others struggled with similar decisions over 100 years ago.
“Twenty years from now you will be more disappointed by the things that you
didn\’t do than by the ones you did do.
So throw off the bowlines. Sail away from the safe harbor.
Catch the trade winds in your sails.
Explore. Dream. Discover.”