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The Over-50 Entrepreneur

“For many, achieving the American dream means taking control of their destiny, quitting their 9-to-5 job, and opening the doors to their very own business,” writes Ed Hess in a July 2011 article in SIPA Hotline. These brave entrepreneurial souls have long shaped American enterprise, and today they’re playing the very important role of helping to drive the nation’s economic recovery. President Barack Obama has called small business the “backbone of our economy,” as small businesses create two out of every three new jobs in America. About half of all Americans work for companies with fewer than 500 employees, and, according to the Small Business Administration, small business accounts for 50 percent of U.S. private, nonfarm, gross domestic product.

Yet, starting your own business at age 50 is a vastly different undertaking than starting a new business at age 20 or 30 or even 40. Over-50 entrepreneurs have many advantages compared with their younger counterparts, but they also face some disadvantages. This chapter will examine some of the pros and cons of starting a business after you have passed the half-century mark.

(Note: When I discuss the differences between being a 50- vs. a 30-year old entrepreneur, I must by necessity make generalizations, since I don’t know you personally. So please, don’t be offended if some of the descriptions don’t quite fit you!)

Why is starting a business at age 50 so different than starting one when you are 20 years younger? There are several reasons, some of them positive and some of them negative. Let’s lay out the advantages and the challenges in a table so you can visualize them easily before we examine them in detail below.

DISADVANTAGES

ENERGY LEVEL

Energy levels between different generations vary. For most of us, our mental and physical energy wanes gradually as we age. That’s not to say that, at 54, I don’t have plenty of energy for my two businesses: freelance copywriting—which I’ve done for decades—and Internet information marketing, which I started a few years ago. But my store of mental and physical energy now seems more finite. Many friends, acquaintances, and colleagues in my age group tell me that they too are beginning to slow down and need to take things easier.

When I was in my 30s and 40s, I routinely worked 12-hour days and absolutely enjoyed doing so, because I love what I do. I’m a workaholic—pity me. There was nothing I liked better than to sit at the keyboard, typing away writing copy for a client, or for a book, column, newsletter, or article.

I’m still actively working in both my freelance copywriting and my Internet businesses, but when I hit 50 or so, I felt my energy had been dialed down a notch. My days are more like nine or 10 hours, not 12, and on Fridays I peter out by about 4 or 5 P.M. I would still like to put in a 12-hour day if I could, but after about 10 hours, my concentration and mental energy fade to the point where I am no longer sufficiently productive to keep on going; that point used to come after about 12 to 13 hours.

I still get a lot more done in that time than most people I observe because I work in isolation; there is no one to shoot the breeze with and few distractions. And, I don’t waste time on social media. Also, with three decades of experience, I know what I am doing and can therefore work efficiently. I included some of my time management secrets in a book, Make Every Second Count: Time Management Tips and Techniques for More Success With Less Stress (Career Press, 2010).

You may maintain peak energy well beyond 50, but at some point in your life—perhaps at 60, 70, or even 80—your mental and physical energy will start to decline. Your work hours will shorten, and you won’t be quite as efficient and productive when you are working. As a result, you won’t get quite as much done as when you were younger or achieve quite as much in a day as your younger competitors can achieve.

ENTHUSIASM LEVEL

The next human characteristic to be affected by age is enthusiasm, or, rather, degree of enthusiasm.

HOW BOB DOES IT

What happens when you realize that you don’t have the energy supply or reserves you did when you were younger? My advice is not to mourn it, as I initially did, but to accept this gradual decline in energy gracefully while taking steps to slow, halt, or—if you can—reverse it for a time. A regular program of exercise can give you more physical stamina and strength as well as make your mind sharper. There are also chemical means of gaining more energy.

I use a vitamin B₁₂ oral spray when I need a shot of energy. It’s safe, and vitamin B₁₂ in liquid form is more rapidly absorbed than it is from a pill. One or two squirts under my tongue and I feel more refreshed and energetic.

Also, for better or for worse—I’m not a doctor, so I can’t advise you here—I use caffeine as a way of boosting my energy. In my youth, when I worked in a corporate office, I didn’t use the office coffeepot because I didn’t drink coffee. But I noticed that my boss, 10 years older than me, couldn’t start his day without it. Today, I can’t get going in the morning without one or two cups of strong coffee. The second cup gradually cools off, and I sip the remaining cold coffee throughout the day until it’s gone. Sometimes I pour a third cup.

While I haven’t used them, there are a variety of energy drinks on the market today that may give you a boost, some with caffeine and some with vitamins, minerals, and herbs—and some with both. Sugar also gives people a shot of energy, but because I recently was diagnosed as prediabetic, sugar is not an option for me, though it may be for you. Be cautious, however. White, processed foods, such as sugar, salt, flour, and white bread, are not the healthiest foods for you.

People over 50 have a lot more accumulated life experience than entrepreneurs in their 30s. Decades of life experience can nurture a cynicism that makes a person cautious and wary; we’ve seen more than younger people, and done more, so we know that problems and pitfalls inevitably arise. By comparison, a 30-year-old may be too enthusiastic about a new business idea because he doesn’t know the reality of what’s possible versus what won’t work. There are pros and cons to both vantage points.

A good illustration for me is writing a magazine article. I wrote my first magazine article in my 20s, and I will never forget the excitement of getting a copy of the magazine in the mail and seeing my byline in its pages. Now, 30 years later, I will write an occasional magazine article, and I enjoy doing it, but the thrill and excitement are gone; I’ve done it a hundred times already, so seeing my byline on article #101 just isn’t an event for me anymore.

When you start a new business, you should—and really must—be enthusiastic about it, even excited. But you probably won’t have the unbridled energy and excitement that a Generation X or Y entrepreneur would have. At this stage in my life, I can say that I enjoy my two businesses, but my excitement is fairly contained. I have a cynicism today I lacked as a younger man; it makes me wiser, but perhaps also dampens my enthusiasm a bit.

In many fields, especially science and technology, the major achievements are made by young men and women. Mark Zuckerberg, for example, founded Facebook while in his early 20s. Albert Einstein published his special theory of relativity when he was only 26.

HEALTH ISSUES

Physical well-being—the degree of health and fitness you possess—invariably decreases with age. When you get older, you suddenly find yourself holding books away from your eyes so you can see the print clearly. You begin to keep a plastic case with daily pills in each compartment. You find yourself making a lot more trips to the pharmacy, as well as to your doctor. You wake up at night to pee. You have more aches and pains, and more concern about serious illnesses such as cancer and heart disease.

Taking care of and maintaining your own health becomes more time-consuming as you age, and those chores take time away from your new business. The majority of younger people are not burdened by health worries, so they are better able to concentrate on their business and spend more hours doing it without the interruption of a visit to the doctor’s office or scheduling a chest x-ray.

I’ve had my share of health problems, and because I was so focused on my work, I ignored some of them—to my detriment. For instance, a few years ago, while I was on the telephone with a client, I became temporarily unable to speak or take notes with a pen. When these symptoms disappeared after a minute or so, I did the stupidest thing I ever did in my life: I ignored them and went back to work.

What I had was a TIA, or transient ischemic attack. A TIA, which is a temporary decrease of blood flow to the brain, is a warning sign of an impending stroke. If more men and women knew about and recognized TIA, thousands of needless strokes could be prevented. Later, I had a full-blown stroke. I recovered, but I still suffer from a slight loss of balance.

RELUCTANCE TO EMBRACE CHANGE

When you’re older, you become set in your ways. Your flexibility may diminish, and you may be less willing to accommodate others. This can be a problem, since you have to accommodate your customers and serve them in the manner they prefer. In my case, I have never liked gadgets or new technology, and, consequently, I don’t own an iPhone, iPod, iPad, or wireless laptop.

This has disadvantaged me in some business meetings where clients take it as a matter of course that I should own these things and know how to use them. I had one meeting where everyone in the room was sending files back and forth between their various wireless devices, and I was embarrassed because I could not do so. My wife says I need to get with the times; no doubt she is right, but I am just set in my ways, and scoffing at what I consider newfangled toys is one of them.

I marvel at how young corporate men and women carry all these devices all the time and stay connected to business 24/7. Yes, it can be convenient, but surely it adds stress, too. At their age, they are able and willing to handle it. At 54, I am not. To always be connected electronically to work seems to be a burdensome thing.

ADVANTAGES

It’s only smart to consider the possible disadvantages that come with advancing years and to make plans for how those issues will affect the way you do business. But don’t let those issues scare you away! Entrepreneurs over 50 enjoy certain powerful advantages over the younger set.

MORE EDUCATION

Many of us with gray hair have much more education, both academic and on the job, than people decades younger. As a result, we know more. We have taken more courses and studied more subjects. And, although our degree may be old and our knowledge not always state of the art, our education includes not just college, but all the continuing education courses and at-work training seminars we have taken over the years.

MORE LIFE EXPERIENCES

The main advantages we over-50s have over our younger brethren are far more extensive experiences in life and in work. This greater experience, especially when combined with more schooling and training than the youngsters have, means that we simply know more, largely because we have faced and dealt with far more situations and problems than they have. Problems that are new and seemingly unsolvable to young people have already been faced and solved by their gray-haired counterparts.

In my day, younger people were more respectful of their elders; in the corporate world, we deferred to their more extensive knowledge and experience. Today, it is the opposite. We live in a culture that worships youth. Once you hit 50, it’s extremely difficult to get hired, which is one reason why starting your own business is such an attractive option. In your own business, you can confidently put your knowledge and experience to work without having to prove anything to a boss who can’t conceive of life without the Internet.

MORE WISDOM

All of your life experience makes you a wiser person. You know more because you have done more and seen more. Problems that seem insurmountable to the kiddies have already been faced and solved by their elders. We possess more common sense and can draw upon a much larger storehouse of experience. We are less impetuous and more deliberate and thoughtful. Ironically, although we have fewer years left to us, we act more slowly than young folks, who always seem in a terrible hurry. At least, that has been my experience.

“Wisdom is usually learned and earned through major experiences in life, both good and bad,” writes Lauraine Snell in her book, Start Your Own Business After 50 or 60 or 70 (Bristol Publishing, 1990).

INCREASED ABILITY TO SEE THE BIG PICTURE

Snell lists additional reasons why the over-50 crowd has the advantage in starting a business.

•Older people were raised in an age where a strong work ethic was ingrained.

•Most people over 50 have been through multiple recessions, so they have learned how to survive tough times.

•Older people understand the principle of delayed gratification. They don’t expect to make a million dollars or have dozens of customers their first year in business.

•Usually by sometime in our 50s, the children have gone off and we live in an empty nest, which means we can concentrate on our business without the distraction of raising kids.

•“Many beginning older business owners have already been successful in their lives as business owners, managers, or employees,” writes Snell, “so they have greater business knowledge and a proven track record compared with younger entrepreneurs.”

FINANCIAL CONSIDERATIONS

If you’re over 50, you have more money issues to consider when starting a business than a younger person does. Many people in their 50s and older have considerable retirement savings, which could be a financial advantage to starting a business. They can afford to take some of this capital and invest it in a business, whereas 20- and 30-somethings are just starting out in life and have little or no savings.

If I wanted to launch a business with $100,000 start-up costs, I could do it without venture capital or loans. Yet, on the TV show The Shark Tank, you see people giving away 10 to 50 percent of their entrepreneurial ventures to investors who in exchange pay them relatively modest five-figure investments.

Of course, the flip side to that advantage is that those of us 50 and older also have to be more careful with our money. People in their 20s and 30s, many of whom are single and without children, can simply afford to take more risk than middle-aged folks, whether it’s making investments or starting a business—even though they typically have less money. They can be more fearless, as they know that if their business tanks, there are still decades ahead to make up the loss and try again. Their peak earning years are either at hand or still ahead of them, and when you are 20 or 30, you think you are immortal.

For those of us in our fifties or older, we are approaching retirement age, even if it’s not in the immediate future. We are past our peak earning years, yet with retirement approaching, our need for cash may be great. Therefore, we must be conservative with our money and investments. We cannot afford to risk it all on an uncertain business venture, and some of us may not be willing to give up the security of a 9-to-5 salary for the uncertainty of self-employment.

In March 2009, the financial crisis sent U.S. stocks to a 13-year low. Investors gave back $7 trillion in wealth and lost 22 percent of their retirement savings—adding to the degree of financial uncertainty for those at or near retirement age—forcing some folks to delay their retirement for years. A recent survey by the Employee Benefit Research Institute found that only 23 percent of workers plan to retire before age 65, down from 50 percent in 1991.

You’re probably going to live longer than your parents and grandparents did. Over the past 100 years, the life expectancy at birth has gone up 28 years, from 49 to 77 years of age, so it’s more difficult than ever to accumulate enough money in a traditional IRA to make sure you don’t outlive your retirement savings. But if you own your own business and set your own working hours and retirement age, you may also be able to count on more working years to accumulate those savings.

According to Kiplinger’s Personal Finance, you need at least a million dollars to retire these days. Most Americans don’t have anywhere near that: The average retirement account balance in the United States for men and women ages 55 to 69 is a mere $42,500.

But even if you do have a million dollars, stock market crashes, cyclical bear markets, and inflation can quickly eat into your retirement nest egg. Some experts now say you need two or three million to retire comfortably.

No wonder 95 percent of Americans rely on Social Security or other government programs to help them keep a roof over their heads during retirement! But when you have your own profitable business, you don’t have to rely on family members or Uncle Sam for support. You remain financially independent, able to support yourself in the lifestyle to which you have become accustomed.

WHAT BRINGS YOU TO THIS DECISION?

Let’s talk a bit about how you have made the decision to start a home-based business. If you’ve just retired and are now living on a pension, Social Security, or investments, that gives you some income on a continual basis, which is a big plus. That steady income gives you breathing time to put your business together without the pressure of finding money fast.

Others of you may have come to this decision because you were laid off or fired, or you have some other reason for needing to start an income-producing business quickly. In this case, you will probably need to move more quickly in setting up your business and won’t have the luxury of easing your way into the transition.

WORD TO THE WISE: CLAIM UNEMPLOYMENT

For those of you who just got fired or laid off, possibly because of your age, things will be a little rough if you do not have enough money put aside to live on for a few months until you get your business rolling. If that is the case, go online to file for unemployment immediately. If you get laid off today, file tomorrow. Every day you delay in filing your claim, you will lose that day’s money if you do get approved.

If you don’t get approved, then fight the decision. You will be notified about participating in a phone interview concerning what happened to you, and you will need to stand up for yourself and define the good job you were doing, particularly if you can show documentation to your interviewer. Your interviewer has the authority to override the employer and charge their account for money due to you. How you present yourself and your case makes the difference in their decision. Be firm, accurate, and do not insult your former employer to the interviewer. Just be sure to get your point across.

Once approved, it takes a full month before you see your first unemployment paycheck, but then you will receive several back paychecks, which will help enormously. But, until then, you will have a month to suffer until that payment comes in. Every state handles the unemployment process differently, so it is up to you to find out what to do and how to do it. Do not feel guilty about accepting unemployment insurance: It’s your tax money.

No matter which route you’ve taken to the decision to start your own home-based business, most likely you are feeling that there has to be more to life; that you want to live a richer, fuller life, and that you want to be in control of what happens to you. You’re tired of bosses who run you around and tell you to do things that really don’t make sense and are not efficient in accomplishing your work. Not only that, but the threat of being fired or laid off without any input is humiliating and degrading.

After age 50, the threat of being fired looms especially large, since employers often are prejudiced against older workers and prefer to hire younger people. Therefore, if you lose your 9-to-5 job, it is difficult to find another. Setting up your own business may be a more viable option than looking for another job, since age doesn’t matter and you won’t have to answer to anyone else.

Being a business owner changes your whole mindset. While there is fear of the unknown, it is still a liberating feeling to think you can be in control of making your own money while doing work that you enjoy—and you can do so for the rest of your life, if you so choose. It is not an easy path, especially in the beginning when you are trying to put it all together. There does come the day, however, when you can finally take that vacation you’ve always wanted, or buy that car or house you’ve dreamed about.

HOW THIS BOOK CAN HELP

In the chapters ahead, you will find some ideas for home-based businesses that could bring you the kind of schedule and financial freedom you have only dreamed of. You will learn about businesses such as freelancing, coaching, Internet marketing, and selling imports and exports, among others.

These are not get-rich-quick schemes but real businesses that will require hard work, planning, and organization to make them succeed. To help you, this book provides ideas about how to set up your business, organize your home office, market your services, and operate as a virtual company.

You’ve spent decades working for someone else; let the information in this book help you strike out on a new path. It’s not too late.

STRAIGHT TALK FROM BOB

What’s scarier than starting your own business?

In my opinion, it’s having a 9-to-5 job!

What makes me say so?

Well, there has been a huge “paradigm shift” (forgive the jargon) in employment that has turned the work world upside down. When I was a young lad fresh out of college in the late ’70s, getting a corporate job—like I did—was the safe, secure thing to do.

Entrepreneurs, by comparison, were seen as crazy risk-takers—gambling their futures on uncertain ventures.

Today, it’s quite the opposite.

By starting their own companies, entrepreneurs take control of their work life. They protect themselves from pink slips by being business owners, because they are their own bosses. Meanwhile, the 9-to-5 world has become a shaky and uncertain place. The old “guaranteed” job security of the 1970s is gone.

So, what can you do about it now? If you are in your 50s or 60s, you are easing toward retirement or perhaps you’re already retired. Or, maybe you’ve been downsized—or even pushed out by a company after you’ve given it decades of your best work. Starting a home-based business can provide the extra income you need to live on now and fill your coffers so that you can achieve your retirement investing goal.

If you are in your 70s, 80s, and beyond, you are almost certainly retired from full-time work, which usually means you no longer have much income outside of Social Security or pensions. You may be living more frugally than you’d like. Operating your own small business can put thousands of dollars of extra cash into your pocket to supplement your pension and Social Security.

Regardless of age, there are very few of us in today’s economy who couldn’t use more money. Launching your own small business is one of the surest ways to earn the extra income you need.