By Christine Graf
An estimated 29 million Americans between the ages of 50 and 70 say they are interested in starting a new business. In recent years, more than a quarter of all new businesses were started by people over the age of 50, analysts say.
Starting a business at any age can be a daunting task, and approximately half of all new small businesses close within five years. It is for that reason that experts warn those in the 50-plus age group to avoid investing their retirement income in new business. If a business fails, there is less time to rebuild these retirement savings.
Lake George human resources consultant Gail Hamel advises new business owners to be prepared to weather financial difficulties.
“They have to make sure they are going to be able to live without making money, and that they have some sort of fallback for a while until money starts coming in. I think that’s the hardest part for a lot of people. It’s not for everybody,” she said.
Hamel started her own business, Hamel Resources, when she was 52. She said it took almost two year before her business began to generate a steady stream of income. Before starting her own company, she worked as a human resources manager for a bank with more than 20,000 employees.
“I went from that steady paycheck getting dumped into my account every two weeks to draining my savings,” she said.
She remembered the day her savings account dwindled to just $100.
“That was the day I said, ‘You better get busy and try a little harder because what you are doing doesn’t seem to be working.’ It gave me the push I needed to do more.”
When husband and wife Ginny Brandreth and Arthur Zobel opened Zobel & Co. kitchens in Glens Falls in 2018, they were both in their mid-50s. Prior to opening their business, Zobel worked for one of Westchester’s largest kitchen design showrooms. Brandreth is a brand and marketing consultant and is now juggling two different businesses. She cautions new business owners to be realistic about the financial sacrifices that come along with opening a new business.
“You don’t have the same disposable income as you would as if you had been working for someone for 30 years,” she said. “You wake up at night and think about how you are going to meet these expenses. There are always unexpected expenses that you never saw coming. But there’s something very rewarding about making your own money. You can make less money and feel more rewarded than if you had a steady paycheck and worked for someone else where you don’t have any ownership.”
According to Leslie Kendall of Kendall & Associates, a Queensbury firm that specializes in organizational development, a business plan is essential for business owners of any age. For those over the age of 50, she said it is especially important that their business plan is realistic.
“There’s no substitute for planning,” she said. “Make your mission very concise, tight, and specific. And just focus on that and on how you’re going to get there.
“As we age, we have less energy, so you have to focus on exactly what you want to do. Find your niche and do that one thing well. Don’t try to be everything to everybody. You can do that when you’re 20. You can’t do that when you’re 60. And don’t overextend yourself in terms of any resources. Not in terms of your finances, not in terms of your energy, and not in terms of your commitment.”
As part of developing a business plan, Kendall advises people to think about the obstacles they are likely to encounter. She said this is something many people don’t want to think about.
“It’s difficult for people to look at obstacles that aren’t nice,” she said. “If you have a stated mission, you have to figure out what the obstacles are towards getting to that mission before you dive into your business,”
When Hamel started Hamel and Associates in 2006, SCORE provided her with the help she needed to develop her business plan. SCORE is the nation’s largest network of volunteer, expert business mentors. They are dedicated to helping small businesses get off the ground, grow, and achieve their goals. Their mentors have helped more than 11 million entrepreneurs since 1964. SCORE has local offices in Glens Falls, Saratoga, and many neighboring communities.
Brandreth said she and Zoebel spent a great deal of time developing a business plan before opening their kitchen design showroom. She found the process to be somewhat overwhelming.
“It’s exciting when you decide to be the master of your own destiny and have a vision for what you want to do. It’s very exciting and exhilarating and then it gets terrifying,” she said. “You need to write a business plan, have budgets, have forecasts, have sales projections, and figure out how you are going to establish yourself. We spend a long time on it. It’s very daunting.”
For many people who have never been self-employed, one of the more difficult aspects of drafting a business plans involves identifying how they will find their customers.
“It’s about striking a balance between getting customers and serving your existing customer base,” said Kendall. “How are you going to get new customers and how are you going to serve the ones you have? That’s especially related to how you spend your time and how you prioritize. It’s so easy to be distracted especially if you are starting a business in your home which is often the case for people who are older.”
According to Hamel who works out of her home, “You’ve got to make sure you have the ability to work independently and create your structure. That’s a big challenge for a lot of people. You’ve got to have a lot of discipline.”
When she started Hamel Resources, finding new clients proved to be challenging. She relied on networking to bring in new business, and never turned down an opportunity to speak at an event.
“It’s all about developing relationships,” she said. “You have to be really passionate about what you do, and you have to be willing to give it time to build your business. You have to really believe in yourself.”
Brandreth agreed that networking is crucial. “I network like it’s my job. I don’t miss any opportunity to go out and meet somebody. Eventually someone is going to need a kitchen, and they are going to want the quality and service that we offer.”
In addition to networking, Brandreth said she and Zoebel work long hours and rarely take time off. They started their business at an age when many of their friends are preparing to retire.
“That’s one of the things you sign up for when you start your own business. If you are going to be successful, you have to put in the time and the effort. And when you are in your 50s, you sometimes look around and see your friends taking awesome vacations, going places, and doing things.
“You need to ask yourself, ‘Am I up for two to five years of a lot of work, no vacation, long hours, six or seven days a week? Am I going to be okay with making some financial sacrifices?” she said. “You have to do a gut check. Is that really what you want at this point in your life? ‘No’ is a completely acceptable answer. It would be worse to take that leap, spend all the money, time, and effort and have it all fall apart and not be happy.”
Although Hamel admitted that starting her own business at age 52 was not easy, she said she has never looked back.
“It was harder than I thought it would be, but I never ever regretted the decision.
I started at 52, and I have been doing it for 13 years. I have no desire at this point in time to stop because I am doing what I love to do.”