For many of us, the idea of becoming an entrepreneur didn’t necessarily start out early. There were no lemonade stands or lawn mowing rounds as kids, just the desire to get a job and get paid by someone else.
Data from the ABS shows that the highest number of entrepreneurs in Australia are aged between 45 and 54. And the portion of entrepreneurs 45 years and older have increased in recent years (from 55.9% in 2007 to 57% in 2012).
Taking the leap
So, why after all those years of working for someone else are we becoming entrepreneurs at a later age? There reasons are highly personal but can include:
- Perceived lack of job security in their current position/industry
- A desire to follow their dreams
- Increased opportunities for a more flexible life, with the ability to create a business that is time and location flexible
For me personally, it was about making a difference and leaving a legacy. I started my business in 2014 after 20+ years in the public and private sectors. Now 4 years down the track, I’m glad I did.
If you’re 40+ and looking to make the leap, these are four things I wish someone had told me before I started.
1. Take care of yourself and get connected
Something that may catch you completely by surprise when starting a business is the potential toll on your mental health. My family will tell you I’m a fairly level person.
Yet, this journey has been more of an emotional roller coaster than I can ever remember. I’ve wanted to quit many times. There’s been high highs and low lows. I’ve:
- made $10,000 in one hour (high high)
- had a client tell me that he was leaving, and had discussed my business with my other clients and they weren’t happy either (low low).
In business, you may have less social contact than you did in your job. I spend most of my time working from home, communicating electronically with my clients and team.
With this in mind, building a network is really important. Give people a call occasionally just to see what’s up. Hanging out with other entrepreneurs is really helpful too.
Entrepreneurs understand the stresses that come with running your own business and can provide an excellent source of ideas and support.
2. It’s all down to you
As an employee, your job likely comprised only part of the company’s activities. No one works in sales, operations, finance, and HR all at the same time.
Yet, for your own business, especially in the early days, you’re responsible for all of those functions – even the ones you hate. As a sales/marketing guy, the idea of handling operations enthuses me as much as cleaning out a septic tank.
Yet, take care of it I must. Outsourcing can help a lot but until the money starts rolling in, you may be limited in what you can afford.
Be aware also your former organisation probably had standards and policies in place that were necessary for that business (and normal for you) but may be completely unnecessary for your new business. You get to set what’s ‘normal’ boss.
3. Needs and wants
As an employee, I had access to all sorts of cool stuff – an expense account, a company car, regular travel etc with no concern for the cost. But now that this is your business, you’re going to need to pay close attention to your costs because you’re paying for them.
One thing I really liked having was Qantas Gold Frequent Flyer status. I got access to an airline lounge, priority seating, faster check in etc.
But this higher class of travel comes at a cost. After starting my own business, I basically spent my profit for two months by travelling as I had when I wasn’t paying.
Have a close look at what you really need as a business owner versus what you’ve been getting courtesy of your old employer. You’re not in Kansas anymore Dorothy.
4. Show me the money
Anyone starting their own business should be pretty clear that there are going some lean times financially, especially at the start. No surprises there.
But if you’re a 40+ first time entrepreneur and a long-time employee, there’s something else you need to consider.
Chances are you have a family, a mortgage, and/or a range of financial commitments.
What all of this adds up to is an established expectation about your quality of life. Eg. “In our family, we eat out once a week, go on nice vacations etc”. Your move into entrepreneurship may just put that on hold for a while.
To soften the blow, discuss your plans with affected parties, and have a close look at your financial commitments.
What costs can you put on hold? How are you financial reserves for handling the mortgage? How will your other half feel about less money coming in?
So what now?
While there are challenges, starting a business after 40 isn’t all bad – far from it:
- You have life experience that 20 somethings lack
- Your self-awareness should be better than ever
- You know what you’re good at and what you’re not – what you like, and what you don’t.
With these insights in your back pocket, your chance to live a great life awaits.
Go get ‘em tiger!