Recent studies demonstrate that middle age is the best age to launch a successful new business–are you ready to be your own boss in 2013? Before you charge forward, you need to be aware that 50% of all new businesses fail within the first five years. Also keep in mind that fewer than 1% of all new business start-ups receive third-party funding, so be prepared to self-finance. I’m not trying to scare you off! Starting up and flourishing as an independent business owner can bring great satisfaction along with significant monetary reward, even if your start-up doesn’t become the next Google or Facebook.
When you look in the mirror, do you see a budding entrepreneur staring back at you? Entrepreneurs come in all shapes and sizes and in both sexes (actually more women than men succeed in start-up ventures), but when you examine your heart and soul, you will need to affirm every one of the following personality traits:
- An independent streak. You are hungry for knowledge and advice and you get along well with others but in the end you want to make and be held accountable for your own decisions.
- Passionate and driven. When you take up a project or a cause you give it 100%; you don’t drift away into something else when the first distraction comes along.
- A self-starter. You don’t need a boss to assign workload or to get you going on a project and to keep plugging away until positive results are achieved.
- A hard worker. Starting up or purchasing a business is never easy, including those “shoestring” home-based opportunities. Don’t be deceived by radio and Internet ads promising “easy money from the comfort of your home.”
- Resilient. As any entrepreneur knows, frustrations, roadblocks and temporary failures abound. Those who succeed are the ones best able to dust themselves off, be flexible and bounce back.
- Not risk-averse. Are you prepared to give up that steady paycheck for an uncertain, highly volatile stream of income over the first few months, even years? Remind yourself continually, success almost always takes longer and costs more than you first expect.
- Willing to sacrifice. Are you willing to forego vacations, give up luxuries, perhaps even sell you home to finance the early stages of your business. Unless you have a large nest egg set aside and are willing to risk it, you will need to plan out these sacrifices in advance so you can avoid the panic of inadequate funds.
- Flexible. Successful entrepreneurs have a realistic back-up plan in mind. Heck no, you don’t intend to fail, but that doesn’t mean you shouldn’t have a safety net just in case.
- Full support from spouse and offspring. Do they understand and share your vision and enthusiasm? Are they willing to sacrifice alongside you? If family members are lukewarm or strongly opposed, your chances of failure skyrocket.
Studies reveal one attribute you won’t need to succeed as an entrepreneur: you don’t have to be super smart! Obviously, you will need basic intelligence plus the ability to think outside the box but your most important attribute is the ability to “know what you don’t know.” Lone ranger start-ups with one person attempting to do everything are the ones most likely to fail. Even if you are highly qualified in finance, production/engineering, marketing and administration, you simply won’t have enough hours in the day to handle all of these functions and to perform all of them well.
Most of us are not independently wealthy and our family living expenses won’t magically go away, so how can you finance your start-up? Home and business software will really help keep track of the finances. Your first task is to visualize the size and nature of the business you have in mind. To be your own boss, there are several options:
- A personal services start-up on a shoestring budget. This usually involves tapping into an existing venture, following a proven formula, and selling your own time and talents. Multi-level marketing (MLM) and home-based Internet businesses are the most common examples. Start-up cost may be a few hundred dollars plus $45/month for an Internet connection. Financing this type of start-up is not a major issue but you will need exhaustive research to locate the opportunity right for you. “Am I good at and would I enjoy performing the tasks required?” Locate and talk to current participants; never rely solely on references provided in sponsor promotions.
- Purchase a new or established franchise. There is a vast range of cost and potential in the fanchise world, but the average start-up cost is around $175,000. Never purchase a franchise without extensive research of both the franchising company and existing franchise holders. Is the company reliable with a proven concept and brand name? Do they provide all the tools and support you will need? Is this the type of business you will enjoy operating day-in and day-out? Is there a void in your community which this franchise can fill? What about the competition? Can the sponsors demonstrate a realistic risk/return business plan which shows break-even and a favorable five-year return on investment?
- Buy an existing business that you can build upon and make better. Cost and quality of businesses for sale range all over the chart. You may need to hire a financial advisor to evaluate past financials. Will you be able to access current owners for advice? Will most existing customers stay with you? What qualities do you bring to the party to sustain and grow the business? Can you access or raise the funds needed both to purchase the business, then to meet payroll and operating expenses over the first few months of operation?
- Launch a new business based upon your own unique concept or product idea. Do you have an idea for a unique new product or service or for a better way of delivering an existing product? If so, your initial task is to recruit a team with varied talents, all of whom are sold on your idea and willing to commit extensive time and energy to your project with uncertain pay-off.
If you can recruit a team of fellow budding entrepreneurs with the necessary complementary knowledge and skills, there are several creative new methods of financing you can try. Don’t waste time at your local bank asking for a long-term venture loan; that’s not the business they are in. There is money out there through new vessels like crowd funding, peer-to-peer lending and angel networks.
Your first step is to demonstrate viability by targeting your customers and launching a pilot project. Next comes a realistic financial projection and long-range business plan.. With genuine creativity, unflagging initiative and the right team of players, you will find a way to obtain the funds you need. But never forget, you don’t need an elaborate business plan or a team of experts to become your own boss in a low-cost personal services start-up right out of your home.
Is 2013 the year you venture out on your own? For additional advice on evaluating, planning for and financing your own business, tune in to the December 24, 2012 and January 7, 2013 broadcasts of my Internet radio show, “Middle Age Can Be Your Best Age” on WebTalkRadio.net. You can access this program from our website www.middleagerenewal.com. On these two shows, I interview three experts who cover all aspects of starting and financing your very own business. After listening in, look at yourself once again in the mirror: do you see an entrepreneur?