Seniors worldwide are showing real entrepreneurial spirit by setting up businesses – do seniors experience unique challenges in this regard?
We believe that the retirement age, in time, will go the way of the Dodo Bird – disappear into extinction. And so it should. The retirement age originated in the 1880’s – the idea of Chancellor Otto von Bismarck in Germany. A well orchestrated social insurance programme was instituted to contribute to the pensions 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 young. 65-year olds still have plenty of stamina, the inclination to work and a zest for life, so it’s quite hard having your retirement age dictated to you. In this country, many people need to augment their meagre pensions, especially as only 6% of South Africans are able to afford to retire, plus we have to contend with an exorbitant cost of living that rises on what seems like a daily basis. And there are many more who want to work on their own terms, follow their passion, set their own schedule and/or use their skills for the greater good.
South African research is thin, but 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. We have 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.
86 year old American, Bill Zinke, believes 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 can expect the same challenges as anyone else, 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? 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.
Evaluate your skills
Do you have the necessary skills to run the 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, can you afford to outsource certain areas, or bring in talent to assist with the tasks you are not able to do.
How will you finance your start-up?
Many small businesses start with minimal investment. If you need funding or investors, consider how you are going to do this. And don’t invest money in a business if you can’t afford it. 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. Don’t gamble with your nest egg.
Learn to love technology
Most businesses will require some or a lot of knowledge about mobile devices (your new pocket office!), social media, online commerce, website management and other technical skills. Look for local courses or get a young person to coach you. Social media can be used for most effective word-of-mouth marketing. Beef up your business acumen online through podcasts, webinars, e-books and YouTube videos. Don’t be challenged by technology – it’s easy once you know how!
Utilise freelancers initially
While growing your business, look for talented, independent contractors to assist you with short- or long-term projects – this will help you to manage costs in the beginning.
Use your connections
You will have been in the world of work for quite some time and most likely know a lot of people. Use your connections to give you immediate access to potential customers to help you get your business off the ground.
Look after your assets
Structure your business so that your personal assets are protected. If your business does not succeed, you don’t want this to impact on your precious retirement savings.
Don’t spend unnecessarily
You don’t need the biggest and the best when it comes to office equipment, cell phones, websites or office space. Start small and grow with the business.
Evaluate your time
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. And if so, construct a balanced approach to your life and time in retirement.
Do you have the physical stamina to start a business?
Assess your health thoroughly before you embark on starting a business. Make sure you are in good shape to keep up with the demands of a new business especially during the start-up period. Don’t 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.
And yet, running a successful business is one of the most rewarding things you can do – physically, mentally and financially.
retirement savings, senior, YEI