Launching A Business After 40Dec 13, 2021
If you are 40 or older and you are considering entrepreneurship…I’m sure you have a lot of questions.
You may be wondering…
- Is it too late for me to start a business?
- Should I take the risk?
- Do I need a tech startup to become successful?
- Is this a smart move at this stage in my life?
Here’s some good news: According to a recent study from Duke University, the Kauffman Foundation, The Founder Institute, and Northwestern, it was stated that the average age of an entrepreneur is 40 years old when launching their first startup, the average age of a successful entrepreneur is 42 and the average age of leaders of high-growth startups is 45 years old.
In this article, we will look at 3 areas to help you in your transition to a startup founder after the age of 40:
- The Advantages
- The Challenges
- The Strategies
#1: Access to Capital
At 40, you've most likely created more valuable assets and have a higher chance of bootstrapping your business over those younger than you. While I have previously discussed in my past articles that starting a business without much capital is perfectly doable, having startup funds and working capital can significantly help get your business off the ground quicker. Your access to capital may be through the savings you have accumulated over the years, your investments, your credit lines or your 401k.
Additionally, you may have an easier path to raising capital through an investor, VC, or a lending institution.
#2: An Established Network
Among the things that can help your business take off is having a deep network. Your long-standing relationships can bring credibility to your new venture.
Your network can help introduce you to the right people or point you towards a resource that you may require. Even if you don’t have an established network, the internet is full of avenues to help you begin building one.
It’s important to foster your relationships and lay the seeds down so that you can leverage the connections you make as you grow your business.
#3: Work and World Experience
It can be challenging to execute strategies when your experience is limited. When you’re in your 40’s, you most likely have experienced many things that have helped you develop a strong muscle memory.
You may have worked with all types of people, been in many difficult professional situations, taken on leadership positions, managed large teams and possibly developed plans from ideation to execution in a previous role.
You also may have experienced failure, which is always beneficial because you not only have learned from it, but know what it feels like. This is advantageous for you because you will be able to anticipate the worst-case scenario, while also helping you build strength and confidence during your journey.
#4: Refined Decision-Making Skills
An advantage to having so much experience is that it can help you make better decisions during difficult situations.
In fact, decision-making skills are one of the most important characteristics of a successful entrepreneur.
If you were in your 20s or 30s, you may have a feeling of invincibility, which makes you take more risks…especially ones that are not calculated. In your 40s, you are will most likely pay extra attention to detail and take a more strategic approach. You also understand the value of hard work, responsibility, and sacrifice and therefore it will help you make sound decisions.
Starting a business in your 40’s may mean working through a few things that come with age:
#1: Personal Behavior & Patterns
There may be habits and routines you’ve formed over the years that are hard to break out of. Learning new technologies and unfamiliar approaches may be a challenge for some who have grown so accustomed to how “they’ve always done things.”
In business, it is critical to embrace new ideas and innovation. Every day, people come up with more efficient ways to go about things. Automated accounting systems, for example, have replaced the traditional methods that keep track of our cash flow. Entrepreneurs these days are utilizing online platforms over physical stores to sell their products and services.
Traditional methods may still work, but when your competition is leveraging innovation and technology to drive their numbers and scale their businesses, you might get left behind. The good thing is there are free online tutorials and paid mentorship programs that can help you accelerate your learnings on modern approaches to business and the technology that can help you compete. You can also hire people who can help you.
#2: Lack of Emotional Support
If your family and friends are stuck with conventional wisdom, they might not understand your drive to start a business when you’re 40 or older. They might think this pivot may be challenging for you, or they may doubt your capacity to build and grow a thriving business. Your spouse might discourage your ambition because quitting your stable job that sustains your family to pursue your dream doesn’t seem wise. These reactions are usually coming from a good place.
Starting and running a business will demand a lot of your time, so it is important to anticipate this problem and minimize your business’s impact on your family. Communicate your ambition to your loved ones. Moreover, let them know your plans and assure them that you won’t go through with it unprepared.
#3: Your Energy
This is an essential factor when you start a business. Building a business demands a lot from you - both physically and mentally. When we age, our stamina and energy levels drop. We tend to lose our cognitive agility when we lack sleep.
This, however, shouldn’t stop you from becoming an entrepreneur.
The bigger problem is not the lack of energy but the absence of a proper strategy. While it is true that you may not have the energy to work the entire day as you would if you were younger, knowing clearly how to move your business forward with proper strategies in place can very well make up for this.
Additionally, it’s extremely important for you to stay healthy and in shape…a surefire way to prevent low energy.
#4: Financial Obligations
As you get older in life, you may accumulate assets such as a house and cars. These will most probably have outstanding payments on them, such as mortgage, financing and leases. Additionally, if you have a family and kids, there may be additional financial obligations such as school tuition, extracurricular activities, family vacations, general living expenses, 401K and 529 funds and anything else that tends to come with age.
Therefore, it’s more difficult to allocate funds towards a startup when you know there are other obligations that may take priority. Unfortunately, you most likely are not a single person in their early 20s that can live in a small “shoe box” apartment and on a Ramen noodles diet.
It’s important for you to be aware of what your financial commitments are, and determine if there are some expenses that can be eliminated for the short term.
As you begin this journey into the unknown, be sure to prepare yourself so that you are ready and able to anticipate anything that comes your way.
#1: Run a Financial Checkup
Before starting a business, it’s essential to know where you stand financially. Ask yourself whether you have at least 1 years’ worth of business operating expenses (not including your living expenses).
If you have to raise capital, determine what the cost will be to start and operate your business so that you are prepared during investment pitches.
If you plan to take a loan, it’s important for you to grasp the significance of debt repayment, plus budgeting your personal and business expenses. You want to ensure you don’t fall into a financial hole if your business fails.
#2: Have A Strategic Plan
The going theory is that as you get older, you will most likely take less risks. The reason for this is because you may have more responsibilities now than you did in your 20s, such as a family, mortgage and other obligations.
Therefore, do not go into anything blindly. Make sure you have are prepared. Research your market, industry, product offering, customer demand, and operational requirements. Be sure to create a business plan.
Many businesses fail because they produce products and services that the market has little or no demand for.
#3: Collaborate and Build the Right Team
With the network and relationships you may have developed over the course of your professional career, it’s important to reach out to those that align with your vision and can assist you with your new venture.
Be sure to ask for help in areas that you need assistance in. You can also work with business coaches who can guide you through the entire process and help you identify and reduce risks.
In the form of collaboration, you can partner with people or companies where both of you can leverage each other’s talents and resources. Gone are days of people competing to take the other out of business. This is the age of collaboration, where more entrepreneurs have realized that partnering is more profitable than fighting.
When it comes to building a team, hire people who will complement your strengths. You can also hire talented freelancers instead of hiring full-time employees to cut down on costs.
#4: Invest in Digital Marketing
These days, having a website, social media presence and content marketing initiative are a vital part of a successful business. Many of your customers and prospects look to the Internet to find products and read reviews.
If you’re not savvy with this, you can hire people to maintain your website, update your social media accounts, regularly send marketing materials to your leads, and interact with your customers online.
It’s never too late to start a business. If you have an entrepreneurial mind and spirit, don’t end up regretting not taking a chance on yourself.
It’s important to take into consideration all relevant factors when launching a business after you turn 40. Be open to change, leverage your experiences, rely on your established network, be strategic on all your decisions, partner with the right people, and continue to learn as much as you can during the journey.
As mentioned before, most successful entrepreneurs launched their businesses in their 40s, and therefore, there’s probably no better time to build and launch your business than now.
Don't Miss Out!
Sign up to get business tips and ideas straight to your inbox.
We DO NOT tolerate SPAM and will never share your email.