Via Forbes

Fifty is not the new 40. It’s not even the new 30. For an increasing number of Americans, 50 is the new 20, a time to decide what they want to do with the rest of their life.

Many of them are deciding to start their own business. In fact, “encore entrepreneurs” are the fastest-growing group of entrepreneurs in the U.S. A 2010 survey by the Kauffman Foundation found that Americans 55 to 64 start new business ventures at a higher rate than any other age group, including 20-somethings. Fully 23 percent of new entrepreneurs were age 55 to 64, up from 14 percent in 1996.

Some are launching their own venture because they’re now financially secure and starting a business is what they’ve always wanted to do. Others have been squeezed out of the workforce by the recession and are starting a business because it’s their best option for financial stability.

One member of the latter group is Joyce Kane, 56, who was laid off from her middle-management IT position at the start of the recession in 2008. New jobs for 50-somethings were scarce at the time but doing nothing was not an option for Kane. So she put her 30 years of experience to work and opened a Cybertary franchise, which offers low-cost virtual administrative assistants to small businesses. Although she hadn’t been planning on a foray into entrepreneurship, she recognized the opportunity to re-establish her financial security by going into business for herself.

If you’re age 50 and considering a new career as an entrepreneur, you’ll want to make sure you are pursuing a viable business venture. Consider asking yourself these questions: Does your business fill an unmet or underserved need? What does the competitive landscape look like? How can you leverage your personal, professional and other key relationships to help you succeed?

Once you have identified your opportunity, here are three steps you can take to move your new venture toward success.

1. Make a business plan. This is step one for any business owner, no matter what age. Once you’ve decided what business you want to start, you need a business plan to prove to others—and yourself—that your venture will work. A successful business is your destination. Your business plan is your map for getting there.

Your business plan should answer fundamental questions, including what you want to accomplish, how you’ll finance your business, what its revenue model will be and who you need to hire to operate your new firm.

As an older entrepreneur, you’ll have additional considerations when writing your business plan. You may need to build in a succession plan to ensure that when you’re ready to place your dream in the hands of the next owner, you can be confident that it will thrive. You also may want to structure your plan to emphasize rapid growth, since it’s unlikely you’ll have 30 years to build your new business or make it profitable. This may factor heavily into what business model you choose. For Joyce Kane, who didn’t have the luxury of waiting decades before her business became profitable, franchising was particularly appealing.

2. Get advice. Small-business owners who have a counselor see higher sales, hire more employees and stay in business longer. The Small Business Administration (SBA) and AARP have teamed up to match first-time entrepreneurs over the age of 50 with successful business owners, professional business coaches and mentors from the SBA’s partner network.

You can learn more about the service and find free courses and other SBA resources at the agency’s 50+ Entrepreneurs website. Also check out the AARP’s Guide to Self-Employment.

Another good place to go for advice is SCORE, a SBA-supported nonprofit organization that helps small businesses start and grow. SCORE provides entrepreneurs with mentors, online counseling, business tools and templates, and workshops online and in your community.

Keep in mind that older entrepreneurs face unique challenges. Some don’t have the necessary tech savvy to compete in that fast-paced market. Others are so used to the 9-5 corporate routine that they lack the flexibility to turn on a dime. The transition to becoming a small business owner will involve more than financial insights; it may be as profound as altering your entire way of thinking and working.

That’s where a startup accelerator can help. Accelerators typically target 20-something entrepreneurs with high-tech innovations who live on the accelerator campus, eat ramen noodles and work 18 hours a day to hone their businesses. But there is a new accelerator in Silicon Valley, the Encore Entrepreneur Program, designed for people 50 and above. The program consists of five one-and-a-half-day sessions on site and a year of online workshops suitable for mature clients who are more likely to have families and obligations to juggle and may be more accustomed to a traditional work environment.

Encore entrepreneurs should also consider soliciting advice from a trusted financial advisor so they know the best way to fund their business and create a solid financial plan that doesn’t jeopardize their future.

3. Figure out financing. You don’t necessarily need a lot of money to launch a business. The SBA can help you decide how much you’ll need to start your small business.

The SBA backs a lot of loans to small businesses and recently made it easier to get a SBA-backed loan, easing access and reducing paperwork. Another option is to take on investors. This is a route usually reserved for high-potential startups. If you’re considering it, read the SBA’s Five Tips for Finding and Securing Private Investors for Your Startup.

However, know that many venture capitalists are reluctant to back older entrepreneurs, even though their age group has a proven track record. Indeed, people over 55 are almost twice as likely to launch successful companies as those between 20 and 34, according to data from the Kauffman Foundation. Perhaps the tide will change as VCs become aware of the benefits of investing in ventures with more mature professionals at the helm, but for the moment, older entrepreneurs may not want to focus too much of their efforts on this source of funding.

Here’s a final word of caution that is particularly poignant for encore entrepreneurs: Don’t jeopardize your financial future by pouring your life savings into a startup. After all, more startups fail than succeed. That’s why it’s essential for older entrepreneurs to take a smart approach to funding by exploring all the financing options available for their new business.

Like Joyce Kane and a growing number of others, business pioneers over 50 offer unique advantages over their younger counterparts and are steadily changing the face of entrepreneurialism. If you’re pondering your “second act,” now may be the perfect time to launch that dream venture you’ve planned throughout your career. As long as you look before you leap, starting a business in your 50s or 60s can be the ride of a lifetime.

About the author

Toni McQuilken

Editor

Toni McQuilken is the managing editor for AE Magazine and P&A Magazine. She has a decade of editorial experience in the trade publishing world, across several industries, including print and graphics, as well as hospitality and technology. To contact her, e-mail [email protected].

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