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You’d be amazed how many people want to be entrepreneurs. You’d be even more amazed to learn this enthusiasm exists across all age groups. In fact, according to one study1, one in four over the age of 65 possess an “entrepreneurial intention,” while nearly one in five the age of 50 feel the same.
Certainly, when you imagine the typical entrepreneur, you picture the likes of Mark Zuckerberg (Facebook), Steve Jobs and Steve Wozniak (Apple
Indeed, a recent research paper2 concludes, “the ‘batting average’ for creating successful firms is rising dramatically with age. …a 50-year-old founder is 1.8 times more likely to achieve upper-tail growth than a 30-year-old founder. Founders in their early 20s have the lowest likelihood of successful exit or creating a 1 in 1,000 top growth firm.”
A lot can be said of these figures, but it’s possible that with age comes experience, and with experience comes marketable value. The allure of these dollars might be too tempting for those looking to find a way to counter the effects of inflation. This is especially true for those in or near their retirement years.
“Starting your own side business offers you a way to share your passions with the world while earning some additional income,” says Liz Miller, Director of Communications at GetSetUp in San Francisco. “It not only helps to keep you mentally and physically engaged as you handle regular tasks to make it a success, but it also helps you to form a routine and community. Staying mentally, physically, and socially healthy while having a sense of purpose and not being burdened with financial issues help everyone to age better!”
This doesn’t mean starting a business is easy—at any age.
Chances are if you’re thinking about entrepreneurship while on the cusp of retirement or into your early retirement years, you have experience but not necessarily the experience of previously launching a business. Without that knowledge, starting a business can seem a daunting task.
“The main difficulty of starting a business lies in knowing what you don’t know,” says Abhishek Pakhira, Chief Operating Officer at Aureus Tech Systems in Greenwood Village, Colorado. “There are many steps involved that the average budding entrepreneur doesn’t know about. It’s much easier when you’ve launched a business before.”
Don’t worry. It’s that first step that’s the trickiest.
“The difficulty is in the start,” says Cameron Johnson, CEO & Founder of Nickson Living, based in Dallas. “On day one, there are simply a countless number of tasks that must be done before you can even begin to think about revenue. For example, naming a business alone takes some people weeks or months. Not to mention LLC or C-Corp registration, getting insurance, setting up internet, email addresses, mailing addresses, accounting and payment processing software, etc. The list goes on, but, like anything new, with each step you take, the next steps get that much easier, and soon enough, you will be up and running.”
Just how do you get past that initial move? The same way you’ve always waded into any new venture. You get help. Of course, help can sometimes make things more challenging.
“There is so much that goes into building a business,” says Diana Heldfond, CEO and Founder of Parallel Learning in New York City. “As a first-time founder, it’s hard to navigate all of the necessities, build a team and figure out how to get your product off the ground. Decision-making gets easier once you learn the ropes and learn how to trust your instincts. In the beginning, relying on guidance from others is important, but it can quickly become paralyzing. You should absolutely rely on advice from more seasoned entrepreneurs, especially as a first-time founder. However, everyone is going to have differing opinions, and it’s the job of founders to decide what 20% of advice is relevant to their business and not get bogged down with the other 80%.”
You don’t have to be retired to wonder if the demands of starting a new business is worth it. On the other hand, if you enjoy pursuing your dream, why would you ever “retire.”
“The biggest benefit of a retiree starting a small side business in retirement is the freedom and joy of being able to do something they are passionate about,” says Gerald Grant III, Financial Advisor at Equitable Advisors in Miami. “For many people, this is the activity that makes their retirement enjoyable, and they get to do it on their own terms. We have seen many cases where people who are not active in retirement get ill and pass away. The freedom and joy of doing something you are passionate about allows you to remain active during your retirement years while taking away the stressful feeling that can sometimes be associated with just working to make money.”
Ah, there’s the rub. The act of starting a business can create the very anxiety you may wish to escape from.
“It will be one of the most challenging things you will ever do,” says Justin Kahn, Co-Founder/CEO of Reepher, Inc. in Salt Lake City. “It takes a lot of hubris to say to yourself and to the world that you have the knowledge, skill sets, drive and determination to make the company successful. It takes commitment and dedication to a level that would break most people, which is why so few entrepreneurs get to the level of financial wealth that makes the investment of time and resources worth it.”
Given this, it’s best to prepare by understanding the rules of the game you are about to enter. Otherwise, you may find the stress levels intolerable.
“Yes, it is exceedingly difficult. Many skills, hard work, time and capital are usually required,” says Michael Clouser, Chief Strategy Officer at The Startup Race Ltd in Edinburgh, Scotland. “First, an entrepreneur has to play the role of researcher and perform keen market and other (such as technical) research. Then, an opportunity that is large enough to pursue in the marketplace must be required. An entrepreneur must understand a customer’s pain and contrive a solution that will be marketable. A team is usually assembled, and this takes people skills. Then the solution idea has to be brought to market in the form of a product or service. All the while, the entrepreneur is battling uphill against such forces as entrenched behaviors and/or larger, more resourced competitors. Mega hours are usually needed to succeed, as the entrepreneur can usually not afford to delegate duties early on and operates in constant ambiguity. John Nesheim famously remarked that an entrepreneur operates in a constant state of fear. This is the normal mode of operation and the feeling for most entrepreneurs starting new businesses. It is really not easy at all. The statistics tell us that 95% of all startups fail.”
Just because the risk is high doesn’t necessarily mean it will be realized. What you should realize is your worst enemy isn’t logistics, operations or accounting, it’s your own psyche.
“Starting a business is difficult, but not impossible,” says Nima Olumi, CEO of Lightyear Strategies in Boston. “What business owners offer employees, contractors and others working for them is stability. Business owners don’t necessarily know what their profit will be three months from now, six months from now, or even seven days from now. They can have estimates and averages in their head, but it’s part of the gamble, the stress, and the anxiety of being a business owner. An employee or a contractor has a set expectation for what they will receive in earnings, while the business owner does not. It’s important as a business owner not to get overwhelmed by this anxiety but to respect it.”
That being said, no matter what your age, the whole point of starting a business is to bring in positive cash flow.
One of the most important things to anticipate is the need to undergo a mid-course correction suddenly. If something is costing more than expected, you need to switch plans. You can’t be married to the first way you decide to do things.
“Anyone can start a business, but having a successful startup is very hard. It requires wearing many hats in the beginning to reduce your burn,” says Michael Sassano, Founder, Head of the Board and CEO of Somai Pharmaceuticals in Dublin, Ireland. “Startups have to be lean and manage the phases of development with precise budgeting. Budgeting is the key to all decision-making and needs to look out years ahead. You also need to be willing to pivot if you find you’re on a bad path. Most startups underestimate the value of making the tough decision to change course despite all our reasons for building a new business.”
Remember, the first step is always the hardest, and this includes the first pivot, too. To reduce risk, start with a simple idea, so the price of failure is less. Each failure gives you an opportunity to improve.
“As fun and fulfilling as building a business is, it is equally as challenging, and it’s not for everyone,” says entrepreneur Alex Adelman, Chief Executive Officer and Co-Founder of Lolli in Brooklyn, New York. “The idea matters more than many people realize. The better the idea, the easier it is to get off the ground. Also, as with everything, building a business takes practice and experience. The longer you build, the more consistent and recurring patterns you pick up on, and the easier it gets. Most challenges I see now are versions of ones that we, as a team, have conquered in the past. This makes them increasingly easy to surmount and gives me confidence and calm, knowing that these are problems we’ve encountered and solved before.”
You don’t have to hit a home run. Think of this as a side business. It’s not meant to be the next Microsoft, Apple or even Kentucky Fried Chicken. It’s meant to accomplish something more important.
“The biggest benefit of starting a business is the extra income,” says Levon L. Galstyan, Certified Public Accountant at Oak View Law Group in Glendale, California. “Other than this, it is an excellent way to supplement your retirement savings, reduce your tax bill, improve your mental and physical health, and pursue your entrepreneurial dream while passing on your skills and knowledge to the next generation.”
Is it really hard to start a business when you’re over 50? No. It’s not any harder than starting a business when you’re 20. But you have a far greater advantage. Your experience.
1 The Global Entrepreneurship Monitor, by Donna J. Kelley, Abdul Ali, Candida Brush, Andrew C. Corbett, Mahdi Majbouri, Edward G. Rogoff, Babson College and Baruch College, 2012
2 Azoulay, Pierre, Benjamin F. Jones, J. Daniel Kim, and Javier Miranda. 2020. “Age and High-Growth Entrepreneurship.” American Economic Review: Insights, 2 (1): 65-82.
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