When Enegis president Jeffrey Eppink founded his energy consulting company in 2007, it wasn’t exactly a roll of the dice.
Eppink, then 51 years old, had 25-plus years of experience working for two leading energy companies, among other places. Since he knew and liked the energy industry, he bought out the consulting practice where he was employed to establish Enegis. He operated Enegis out of his home in Fairfax, Virginia for the first six months. He also self-financed his business without using retirement savings.
Unlike Eppink, some people use mid-life change as an opportunity to go into a new field.
But if you’re thinking about becoming an entrepreneur as a second act, Eppink’s measured, level-headed approach is worth noting no matter what type of business you may want to start.
The most successful encore entrepreneurs research their business idea thoroughly before they launch. They also pare expenses, prepare a budget and add necessary degrees or other training ahead of time.
“Older entrepreneurs are not necessarily more risk averse than, say, a millennial entrepreneur, but they’re generally more practical,” says Kerry Hannon, author of Great Jobs for Everyone 50+: Finding Work That Keeps You Happy and Healthy…and Pays the Bills.
“And for good reason,” she adds. “They can’t shell out for start-up costs, or step away from an employer offering a retirement plan with matching contributions with the knowledge that they have years to recoup any losses.”
While late-blooming entrepreneurs may have a shorter time window than their younger counterparts, they have many advantages. The biggest one, perhaps, is their collective life experience.
“When you’re older, you’re more aware of the processes involved and the things that can go wrong in a business,” says Eppink. “You also have more tools in the tool box to use.”
So what’s his advice for entrepreneurs looking to mitigate uncertainty?
Take calculated risks, have a high tolerance for rejection and expect to do everything yourself at first. Effective time management is key, he adds.
“You have to understand what you can and can’t control,” says Eppink.
If you’re one of those aspiring or new encore entrepreneurs who is risk-conscious, here are other tips to consider:
1. Have a heart-to-heart with your significant other.
Sometimes one retirement-age spouse wants to slow down – and the other doesn’t. Make sure your life partner fully supports what you’re doing. Otherwise, the resentment may destroy both your relationship and your business.
2. Work for someone else first.
Hannon recommends moonlighting, apprenticing or volunteering to find out what it’s really like to work in your target industry. This allows you to determine if the business is a good fit before you invest significant resources.
3. Test your business idea.
“Most startups fail because of lack of market for what they are selling,” says Gisele Stolz, director of the Mason Enterprise Center (MEC)’s business incubator at George Mason University. Stolz recommends the Lean Startup method to assess the marketplace before launching your product or service.
4. Find a business partner who offsets your weaknesses.
My husband, the founder of a retail bicycle business, is the face of the company and enjoys interacting with customers. His business partner is comfortable with spreadsheets and prefers to work in the back office. Together, they provide a balance that’s critical for the company’s long-term success.
5. Start small and grow slowly.
When you make mistakes in judgment, they won’t be as expensive, says Art Koff, an aging expert and the founder of RetiredBrains.com. “If an older entrepreneur loses her or his investment, it is more difficult to save for another shot at starting a business” Koff says. “Even if the entrepreneur has additional funds to invest, it becomes less likely that she or he will take a second plunge if the first was unsuccessful.”
6. Hire carefully.
Eppink, who has never laid off an employee, personally interviews all final candidates applying for jobs with Enegis. He also leverages his professional contacts made through the MEC-Fairfax (where his company is now located) to find quality referrals.
7. Ask for help.
Talk with people who have started businesses similar to the one you have in mind. Contact SCORE to find a mentor.
Here’s something else to know: The average age of a successful startup founder is 45, shows recent research based upon U.S. Census Bureau data. For certain industries, such as oil and gas or biotechnology, the average age is closer to 47.
In other words, embrace your age. You’re already ahead of the game by starting later.