Our baby boomer generation is at a crossroads. We were brought up to believe that if we got a good education, worked hard and stayed loyal, we would be rewarded with a continuous career and the opportunity to pay off the mortgage, put the kids through school (without student debt) and retire comfortably. But the reality, particularly after the Great Recession, is that many of us need to make money well beyond the traditional retirement age of 65.
The pensions that were once the norm have been steadily morphing into 401(k)s where our investments are at the mercy of the markets and returns are much less predictable. Even if we have put aside significant retirement savings, more and more of us are dreading the prospect of retiring to a life of golf and leisure. Our bucket lists are still full of meaningful ambitions and a desire to keep working at a job we love.
Starting a new business may indeed be the answer to corporate uncertainty, ageism and other factors that conspire against us in the marketplace. But what business to start? That question is a tough one, particularly if we need to start generating income sooner rather than later.
My own corporate career in the entertainment business went off the rails in the early 1990s, and starting my own business was my only real option. Founding a technology start-up during the dot-com era gave me a crash course in making the transition from executive to entrepreneur. Now, as a career coach, I’m helping other baby boomers make the same shift.
Here are three principles that have helped me and my clients start off on sound footing when making the jump into small business ownership.
At the beginning of a career transition, we may favor the prospect that seems to shortcut the longer, seemingly more uncertain process of waiting for the right business to come along — or doing the research and hard work to launch our own business. We fear that if we let the first opportunity go, there won’t be anything better to come along. But we need to beware. Impulsive moves like this could come back to haunt us. In our desire to avoid being out of work for a long time, or because we lack the confidence to start a viable business on our own, we may overlook or discount some very real business fundamentals. We need to slow down, do our due diligence, and stop giving in to short-term pressures — either our own or from those touting the opportunity.
We often limit ourselves by believing we’re only suited for a business that directly relates to what we’ve done in the past. We think, for example, that we should only consider consulting in the same field or industry that we already know.
I’m not knocking this as a strategy — it often is a great way to transition out of a corporate job and pull in clients with whom we worked under the corporate umbrella. Many “encore-preneurs” have started out this way, and it’s a fine way to go. But we shouldn’t let that approach limit us. Looking ahead, we must be committed and inspired by what we’re going to do in the next ‘act’ of our lives. Particularly if we’re going into consulting or small business ownership, there will be tough days. We’ll need the passion to keep going and get up in the morning with a sense of excitement that this is a business we’re glad to have chosen.
One of the surprising things that ‘recovering’ corporate managers learn at this stage is that what they know about running a business — the priorities, relationship-building, customer-service, etc. — is more important than the specifics about the business itself. Domain expertise for a new business can be learned, researched and hired; managerial wisdom is rare, and it’s a quality that we’ve learned and earned through our decades at work.
One common mistake that many boomers make when starting a new business is to think they’re still the same person they were in their younger years. Yes, we may have long harbored a fantasy about getting into a particular business or moving to a particular place, but before we jump at the chance to fulfill those longstanding dreams, we should double check our assumptions first.
Whatever we think we know about the particular business field or idealized retirement location, we need to update our knowledge and consider all of the long-term implications. Since we first formulated the dream, many things may have changed, including our health, the economics of that business sector and our own interests. For example, as a serious amateur photographer, I often assumed that I would open a photography studio in retirement. But in the intervening years, photography as a business has changed significantly, and I have to admit I don’t find the field quite as absorbing as I once did. It would be a mistake for me to try to convince myself to start a business in that field.
The common thread running through this advice is to be mindful of all the possible factors affecting our decision. While it’s impossible to account for every eventuality, if we take our blinders off and take a step back to consider a new business concept with a sense of perspective, we can make a smart decision that we’ll be grateful for. Setting ourselves up for success has never been more important, and taking advantage of all available resources — including the input of expert advisers as well as the family and friends who know us best — will ensure that we’re making the right decision for our future.
This post appeared previously as one of my blog posts for Guidant Financial, a financial services company focused on small business, including Roll-Overs for Business Startups (ROBS).