Deciding to start a business after age 50 takes courage. You have to pick up new skills. You face financial responsibilities that you didn’t have when you could still crash on your parents’ couch. And while your friends are easing their way toward retirement, you’re devoting every waking hour to your new venture.
None of this is stopping legions of people in their 50s, 60s, and beyond from launching businesses. The fastest-growing segment of new entrepreneurs is 55- to 64-year-olds, who now make up 26% of the total, up from 15% in 1996, according to the Kauffman Foundation.
And the freelance economy is already well-populated by older workers. The 2018 MBO Partners State of Independence in America Report found that 35% of free agents are 55 or older.
But starting a business in midlife requires careful thought, especially if you’re investing a five or even six-figure sum. “If you take a big financial hit late in life, you won’t have time to recover,” says Steve King, a partner at Emergent Research, a Lafayette, Calif. firm that studies the independent workforce.
So how do you pull it off? In this six-part special report on entrepreneurship after 50, you’ll learn the best strategies for going solo, novel ways to raise funds, and the top tools to help you launch.
Plus, you’ll meet three people who’ve pulled off this transition after age 50—with no regrets.
What’s behind the start-up boom
Why are so many workers their 50s and 60s opting to start a business? In a 2015 survey, Gallup found that 32% of boomer entrepreneurs cited independence as the main reason; another 27% said it was pursuing an interest or passion.
By the time you reach 50, you may feel that if you’re going to let go of a job you don’t like and follow your passion, it’s now or never.
“Many of them had careers that probably didn’t engage them as much,” says Sangeeta Bharadwaj Badal, senior researcher for entrepreneurship at Gallup.
After a 33-year career in information technology, Sue Hollowell, 56, started Free Heart Productions in June 2017. Her Olympia, Wash.-based company runs workshops for women on how to engineer career changes and reach other goals.
At the time, Hollowell was facing a high-pressure project at work while battling health problems and coping with an empty nest after her two daughters had left home. “I needed to do something to fill my cup, so I could get some joy into my life,” she says.
When it’s a necessity, not just a dream
The need to make more money also pushes many toward entrepreneurship. One out of four new boomer business owners cited that reason in the Gallup poll.
Or you may find that the job market is no longer welcoming. “Age discrimination is very real,” says King. With career options narrowing, striking out on your own might seem preferable to the corporate life.
Fortunately, as an older free agent you are often well-positioned to make a good living, thanks to your experience and robust professional networks. MBO Partners found that among baby boomers who are freelancers, the average full-time annual income is $79,000, compared to $47,400 for millennials.
Ease the way with a side hustle
Before you go into business full-time, look for a way to try out your idea on the side first, unless doing so would violate an employment agreement or otherwise antagonize your boss.
By lining up freelance projects for your evenings or weekends, you can test out the process of finding work, completing it, and collecting money from clients.
Starting a business on the side is fairly easy if you offer professional services, thanks to the growth of platforms that match freelancers with clients, like Upwork and Moonlighter. (for more on how these sites work, see our list of top small-business resources).
The platforms can be competitive, so also stay open to offers of project work from your professional contacts.
Start small to limit your losses
The “go big or go home” attitude may apply in Silicon Valley, but if you are starting a business in midlife you don’t want to raid your retirement savings and leave yourself short if your business doesn’t work out as planned.
Start on a small scale first, and then invest more time and money in your business as you see money flowing in from sales. “Try to start a low-cost business or start smaller than you want,” advises King. “Only touch your retirement savings as a last resort.”
In fact, you don’t necessarily have to use your own money to fund your business. If you’ve got a great idea for a product, you can try raising money via a crowdfunding campaign on a site like Kickstarter or Indiegogo. (For more on this tactic and other ways to raise funds, see “Find the cash you need to make your start-up soar“.)
Typically on these sites, people interested in trying your product will pay to pre-order it, providing you with seed money. Crowdfunding works best if you’re an avid social media user and can share your campaign widely.
Keep your overhead as low as possible
One common mistake is trying to create an office like your old one. “Some people think, ‘This is how we did it in corporate,’” says Andrea Nierenberg, a networking strategist and communication consultant in Sarasota, Fla., who is also a counselor at SCORE.
When it comes to amenities like office furniture, “you don’t have to invest in the high, high end,” says Nierenberg. That doesn’t mean you must operate from your home, which can be isolating. Co-working spaces and business incubators, which offer access to conference rooms too, are a low-cost alternative to renting your own office.
The largest ones include Regus and WeWork. Prices vary. A two-year agreement at Regus, for example, gives you unlimited access to 3,300 business lounges worldwide, plus two days a month in a private office, for $141 a month and up.
At WeWork, you can get access to a flexible desk space or a dedicated desk in a shared office for as little as $190 a month.
Build on what you know
You can get off to a quicker start in running your business if you use skills you picked up during career than if you start completely from scratch or go back to school.
Are there ways to apply the skills you already have to a new type of work or industry? For instance, if as a teacher you had to create a curriculum for a new course that became successful, you could potentially start a consultancy specializing in curriculum design.
Sue Holloway tapped her project management skills to launch her workshop business. Now she teaches women how to apply planning techniques she had learned during her career to their goals. “My genius is really in the planning area and getting results,” she says.
Own just a tiny niche
Many small business owners find they do better by embracing a narrowly defined product or service and excelling in it, rather than trying to become the Amazon or Google of their industry. “You create your brand that way,” says Nierenberg.
To identify the right niche, think about the untapped needs in your industry, particularly those that big companies have ignored, or groups of clients you really connected with.
Do some basic market research by checking out search engine listings for a service you would like to offer, to see how many providers, if any, are already doing so.
One financial professional Nierenberg knows who is getting ready to leave a large organization is planning to focus on serving divorced women, a client base she already knows well. “If you try to be something to everyone, you’ll be nothing to anyone,” says Nierenberg.
Make yourself the story
Fortunately, you have an advantage over big companies when it comes to marketing. You are free to share more of your personal story in your marketing than what’s possible in a more buttoned-up corporate setting—which can be a great way to connect with potential customers.
If, for instance, you plan to start a business targeting divorced women, and you saw a need because of your own financial needs following a divorce, you might share that story on your business’s website, in the “About” section.
Stay open to informal opportunities
What if you’re not sure what you could do or a niche you could specialize in? Stay open to opportunities to help family members or friends when they’re in a crunch at work, or volunteer at a nonprofit that’s willing to offer training.
When Sara Parrish, 50, of Springfield, Mo., learned that her boyfriend, Jaime, needed help with a branch of his web development company that produces podcasts, the part-time personal trainer began pitching in, even though she knew little about technology.
Still, she persisted and asked Jaime and friends she met in the industry for advice when she got stuck. “I learned as I went along,” says Parrish. “I had zero background in it.”
This past February, she felt confident enough to take over the business, a few months before her 50th birthday. “I love my clients so much I jump through hoops and get it done,” she says.
That’s a good feeling to wake up with—and fortunately, you don’t have to be 22 to experience it if you’re willing to dip a toe in the water of entrepreneurship.