When you think of launching a startup, you may picture a twenty-something technology geek wearing a hoodie and working out of a business accelerator in Silicon Valley.
That stereotype, though, is increasingly out of date. In fact, the fastest-growing group of new business owners are people ages 55 to 64, according to the Kauffman Foundation, with their ranks up from 15% of all new entrepreneurs in 1996 to 26% recently.
The recent sharp growth in self-employment among people 50 and older is partly due to older workers getting pushed out of corporate America. But the even more compelling reason, research shows, is that they simply want to pursue their passion.
If you too are eager to make the leap from employee to self employment, follow these steps to get your solo venture off to the best start.
1. Get real about a timeline for success
Have you ever noticed a new restaurant that closed just a couple of months after opening? Often that’s because the owner didn’t take into account the time it would take to gain traction—and ran out of money waiting.
To avoid that fate, plan carefully. “The first step is to give yourself some runway,” says Bill Carmody, a business coach in Port Washington, N.Y. and CEO of the marketing firm Trepoint. “There is a ramp-up period of three to six months where you could be doing everything right but not bringing in any money.”
Setting aside six months’ worth of funds so you can both pay household expenses and run the business will give you the time you need to see if your idea for self-employment will work.
“You’ll be able to breathe and do things out of business savvy,” says Carmody. “You won’t feel that sense of dire straits.”
2. Narrow your target niche
Even in a crowded field, it’s possible to build a thriving business if you can find an untapped area to focus on. Doing your research is crucial.
Ask yourself, what are the unmet needs in your industry that the big players are ignoring? To see if others got there first, simply Google the service you’d like to offer and see who your potential competitors are.
If no one is doing what you want to do, make sure there isn’t a good reason for that. When Maureen Lake, a former special ed teacher, and her daughter Devin, a veterinary technician, decided to go into the pet market together, they looked at pet-related businesses up for sale on BizBuySell, a large marketplace for small businesses to find out why.
Studying the list, they concluded that dog bakeries and kennels appeared to have poor profit potential. So they focused their site Trendy Pet on selling unique accessories for dogs and cats. Launched five years ago, the business now generates six-figure revenue annually.
3. Save time with the right tools
Look for simple low-cost tech tools that will save you time and stress.
One of the most overwhelming tasks you face when you’re self employed is staying on top of the quarterly estimated tax payments you’re required to make to Uncle Sam. The service bSolo can help you manage the process by automatically saving a portion of the money you make from your business for taxes as you earn it, then sending the amount you owe to the Internal Revenue Service and your state government when it’s due.
The site also offers free resources to help you get your business off the ground, including a freelancer starter kit, with information on creating a simple business plan and a budget to help you get through your first year.
Want to create a compelling looking website without spending an arm and a leg on a web designer? Inexpensive, simple-to-use options such as Squarespace, Weebly, or WordPress can help you design a site yourself.
And, rather than going to the expense of hiring employees to handle tasks you can’t do yourself—“Having W-2 employees too early will kill your business,” Carmody says—use freelancers as needed. Sites such as Upwork, Freelancer, and PeoplePerHour can help you identify the best people for the job at hand.
4. Network smarter
One advantage to striking out on your own when you’re 50 or older is the sheer number of people you’ve met during all those years you spent on the job.
Tap three to five former colleagues you trust and let them know you’re in business for yourself, recommends Jasmine Sandler, CEO of JS Media & Agent-cy Online Marketing, based in New York City and Los Angeles. These are the folks who will be willing to give you honest advice—like whether the name of your business and your concept works—and make introductions.
“That’s some really good market research,” says Sandler. “It will give you a lot of good feedback on whether your own audience believes in what you’re doing. It will save you money in the long run.”
5. Learn to wear two hats
After decades in the corporate world, you may be accustomed to focusing on your projects alone and letting the sales team bring in the orders. In the eat-what-you-kill world of self employment and entrepreneurship, you need to do both.
If you find yourself hesitating to make a hard sales pitch when you reach out to your contacts, shift your message to explaining how you can best help your potential customers, says Vito Mazza, president of Mazza Consultants in Leonia, N.J., who worked for World Book Encyclopedia for 30 years before starting his business at age 60, in 2012.
He recommends books on the altruistic approach to selling by sales experts Brian Tracy and Zig Ziglar.
“It’s like leadership,” says Mazza. “They describe a leader as a person who worries about the people on their team, not themselves. You should be focused on the prospect—what they are going to get out of what you are offering?”
Assuming you’re selling something people want or need, you’ll build trust and a healthy clientele by always framing what you can provide in terms of the long-term value you bring.
“Even if you lose a sale, you’re always thinking about what’s in their best interests,” says Mazza. The short-term outcome may be less than ideal, but it’s a smart path to true success in the long run.