Baby Boomers are now at the head of the entrepreneurial pack. In a recent update of the Kauffman Index of Entrepreneurial Activity, the segment of the population boasting the largest number of new entrepreneurs is those born between 1946 and 1964–hardly a surprise given their decades of work experience, essential for building those skills necessary to start a business.
What’s more, many have also built a dependable network over the years that will help them get their business goals met, whether that be with a ready stable of clients, or vendors, or staff. Many Boomers suffered greatly in the Great Recession. Thrust back into a thoroughly changed job market, they struggled to get their foot in the door. If you can relate, know this: more than ever, Boomers have stepped up and triumphed in the face of adversity.
If you are a Boomer starting a new business or thinking of starting one, doing so might be the perfect way to harness everything you’ve done in your career up to this point. At the same time, starting up a business at a time when you should be thinking about conserving your asset resources isn’t always a good idea. There’s definitely a right way and a wrong way to go about it, and going about it the wrong way can be devastating to someone at your stage in life.
Here are some tips that can help you go about starting up the right way:
Preparation is Key
Like most anything in life, a successful business requires that you have planned ahead and done the research necessary to know what challenges await you. Don’t think this is only about external factors, like potential competitors or rules and regulations, either–introspection is critical. What are your strengths? Your weaknesses? Familiarity with these will enable you to know when to rely on yourself and when it would be better to turn to a professional.
Legal matters are often in that latter category. Though there is a plethora of one-size-fits-all legal documents available, you must approach these with a good bit of caution. The intricacies of the law are innumerable and you don’t want to find your business snagged on a seemingly minor detail, and you also don’t want to pass up a potential boon for your business because you didn’t know what was possible under the law. A Creative Business Lawyer can help ensure that the documents you draft are best fit for you and your business.
‘Help’ isn’t a dirty word
‘Yes men’ (and women) have assisted in the downfall of great enterprises and empires since the dawn of time. You need more than people who will tell you what you want to hear. An informed, objective adviser is worth their weight in gold. An experienced business attorney can often fill this role, offering the unbiased analysis your business needs to avoid problems before they arise. For non-legal aspects of your business, having a business coach can make a huge difference in the level of success your business can achieve and the time it takes to get there.
Be well aware of your finances before investing in your business. How much of your personal money can you afford to put into your startup? How else will the business be financed? And whatever you do, do not mix your personal and business accounts. Doing so risks leaving all of your wealth vulnerable to business lawsuits.
Research your market
This should go without saying, but you might be surprised how many will blindly dive headfirst into the shallow end of the pool. Establish beyond any shadow of a doubt that a market exists for your product or service. This is especially so if your business is such that you are going to have costs of development and have to carry inventory. The last thing you want is to have your family’s savings tied up in a product that is stored in boxes in your garage because you can’t sell it quickly enough.
Keep a tight budget
There’s an important difference between cutting corners and practicing frugality. A frugal business owner will avoid unnecessary costs, while making certain that doing so won’t negatively affect his or her business. For example, you might avoid fixed costs by forgoing the rental of a luxurious office space and simply working from home–just make sure this will work with your business model. I believe in starting lean (and staying lean, for that matter) but you will need to spend some money.
My rule of thumb: only spend money on things that will make or save you more money. Spending on marketing (done smartly) is often a better investment than buying the latest computer gadget, but if your computer system is out-of-date and it’s slowing you down, then upgrading it might be the right thing to do to increase efficiency and productivity. For every purchase you are thinking about making, take the time to consider whether or not it has the potential to make or save you money. If it doesn’t and it’s not integral to operating your business, put it on the list for a future purchase once your business is consistently in the black.
Know your way out
For any business owner, it’s a good idea to start with the end in mind, but even more so if you’re a Boomer because you likely hope to retire within a decade or two. Make sure your business’s long-term strategy leaves that a viable option and that you’re building your business in such a way that it is a valuable and marketable asset that can be sold when you are ready. There is a specific way to do that and waiting until you are ready to sell or when something tragic happens that has you need to step away from your business doesn’t give you the time it takes to do that effectively. Talk with your business attorney about what options will be open to you when the time comes to step away from the day to day operations and make a plan now for that transition.
We help business owners avoid costly legal disputes through proactive business planning, including crafting agreements and procedures to ensure you comply with state and federal law. To learn more about our personal approach to business planning, call us today at 612-206-3701 or via our online contact form to schedule your comprehensive LIFT™ Foundation Audit.
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