Is now the right time to take the plunge, back yourself and start your own business? This might sound crazy at a time like this, but I bet it’s crossed the minds of many. The economic impact of COVID19 has meant that lots of people are being furloughed, retrenched, made redundant or forced into early retirement, and lots will be thinking about what’s next for them. The prospect of a drawn-out job search, perhaps long-term unemployment or accepting lower pay and benefits could be just too gloomy for many, especially those who were looking to do something different before all this mess happened.
Research in 2019 from Penn State University found that older people are an underestimated source of entrepreneurial flair! They found that people like us often have a wide variety of interests and these stimulate and feed ideas and innovation. In addition, our ideas often have community interests at their core.
The perception that innovation and entrepreneurial behaviour is the domain of the young is unfounded – research from MIT and Northwestern University highlighted that entrepreneurs 50 years and older are nearly twice as likely to achieve success than those in their 30s.
The reasons for this success are likely to include things like a richer network to tap into for suppliers, co-founders, new hires and financial supporters. Older entrepreneurs are also likely to have their own money to invest in the venture and we can’t overlook the years of experience they bring to the equation. Even better if the startup business is in the same industry because then we can leverage all our experience and knowledge.
If you are considering the bold move to your own business, maybe you should! Carefully consider the need for your business idea. While it might sound contradictory, it is clear that recession hits small businesses the hardest. However, it also creates a fertile ground for innovative startups. For example, I recently saw an online start-up where the service being provided was the set up and facilitation of wonderful online events e.g. birthday parties, 50th wedding anniversaries, etc. Not an idea that perhaps would have gotten much traction in 2019, but 2020 is a whole new ballgame!
In addition, research suggests that it’s the things we don’t do in life that we regret the most! So, if you do want to start your own business there are some important steps to get busy on:
1) Get clarity on your idea
Try to understand what you want to do and why you want to do it. Getting clarity here is critical.
2) Conduct your research
Is there demand for your idea? Do the research to make sure that you have support for your assumptions; check that people will pay for what you’ll offer, understand who are your competitors and what will you do that competitors aren’t doing already? You’ll also need to explore likely pricing, costs and profitability. Also review what skills you will bring to the enterprise and where you might be lacking. Is it realistic for you to bridge those skill gaps yourself or can you fund buying these skills in?
3) Create a business plan
This will help you test profitability, understand your financial needs, and give you a roadmap for bringing your business to life and growing it. There are some helpful business planning tools online to help with this. Over estimate how long it will take you to begin to earn income, can your finances carry you through that period?
4) Obtain registration and incorporation
This step usually includes things like choosing a name, deciding on the legal structure for your business, obtaining a bank account, obtaining a domain name for your website, getting a tax number etc.
5) Corral the team
Round up the people with the expertise you’ll need for success, for example marketing, customer service, technical support, accounting, banking etc. To keep expenses down at the outset while you test your concept, can you do some of this yourself, or do a barter agreement for something you can provide? OR this could be rewritten to say identify what you can do yourself and what you MUST outsource at the outset. Those you must outsource, can you do any form of barter agreement with the provider or pay in installments?
6) Financial Resources
There are multiple sources of funding and interest rates are at their lowest in years. However, take time to explore the costs and benefits of each potential source of funding, such as your own cash, a loan, an overdraft, cofounders, friends and family etc.
Don’t get me wrong! I am not advocating that this is a great time to set up a business. Ultimately, with the world and domestic economies in a state of uncertainty, it’s probably a difficult time to summon the courage and follow your dreams in terms of starting your own business. However, whether it’s by choice or not, more people than ever will be questioning the merits of the standard employer/employee relationship and thinking strenuously about what’s next for them. If you took the plunge, what would you do?