Posts Tagged ‘Business start up’

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In this post found in Open Forum, Anita Campbell , Editor and Founder of Small Business Trends, LLC, cites statistic showing that older Americans, ages 55 to 64, are far more likely to be or become entrepreneurs than the young. In fact, according to Bureau of Labor Statistics data,
 

 “The incorporated self-employment rate is four times higher among those aged 65 to 69 than among those aged 25 to 34—and a whopping 25 times higher than among those aged 20 to 24.”

 
Campbell posits a couple of reason for this:

• Older people have more skills and confidence
• Older people are free to pursue their dreams of entrepreneurship
• Older people are unemployed and unable to find traditional jobs

I would propose another possibility. 

Older People Want to Work

In general, older people are not anything like the widely held stereotype o f a slow moving, creaky and cranky old Grandpa.  Better health habits and better health care (new hips, new hearts, and new knees) have created a generation of healthy, active retirees who want to work – on their own terms.

If You Didn’t Work, What Would You Do?

This is America; everyone works here: the rich work, mothers of young children work, the disabled work, even Tim Ferris, who claims not to,  still works – a lot – he just calls it something else.

For at least some of today’s graying population, unremitting leisure holds little appeal.  They believe it is better to have some work, some purpose and meaning to their days.  And so, wisely, they start a business to pursue their interests, skills and talents, to share their expertise, to supplement their income and to give back to the community in an exchange of value.

Is it Wise? It Depends

Is it wise, Campbell asks, to use retirement funds to go into business?  The answer of course is, it depends.  A careful consideration of an individual’s current reality and resources and personal goals can guide early startup decisions to a course that fits the means. 

Starting a business does not have to risk money that should not be risked.  When I started my coaching business I could see it would require up front investments in training, website development, licenses, networking luncheons. So, seeing entrepreneurialism as a lifestyle as much as a job, I took the time to first establish Presto Espresso Gourmet Coffee Service a small vending machine route.  My high end, fully automatic espresso machines now generate passive cash flow.  It’ is not a lot but it is enough to fund the startup costs for my true love, Working Miracles, my small business coaching practice.

I’d love to hear from anyone who is planning or is currently pursuing entrepreneurialism as a retirement lifestyle.  What is your experience?  Was it wise?

I have argued for small, very small, businesses over big business.  To pursue this non-conformist philosophy requires a certain level of rugged individualism.

Take, for example, Guy Kawasaki’s advice in The Art of the Start: regarding managing for cash flow.  Kawasaki says that managing for cash flow isn’t a long term practice. Eventually, he claims, a business builder will want to strategize for “paper” profits like growth, market share or brand recognition.  Management for cash flow is a strategy only for early stage bootstrapped businesses.

If your intention is to be a very small business owner, his advice for bootstrappers is useful, just don’t be sucked in by the claim that cash flow is not a long term practice. It can be.

If your choice is to create a business that will afford you a certain, adequate lifestyle, consider the life you will create as you follow Kawasaki cash flow advice for early stage start-up businesses.

Happiness is a positive cash flow. Fred Alder

Kawasaki gives the follow advice to maximize cash flow from your business:

Choose A Product That Is Easy To Sell

He is right. As you choose a business, don’t make it hard for yourself. I have worked with clients who chose to sell a debt reduction tool. They always struggle because, despite its proven success, the product is expensive, the usefulness of the product is difficult to demonstrate and the market, by its nature, is cash strapped.  Better to choose a product your market already knows it needs. Even though the market is highly competitive, there will always be someone selling easy weight loss and get rich quick schemes because these products meet a widely recognized need.  Choose a product that is just as compelling as beauty and wealth – but look for a niche with less competition.

Position Your Product

Once people recognize their pain, you want to make it an easy step to buy what you are offering.  Develop a marketing funnel.  Give your prospects a chance to experience your wares with little or risk as they come to know and trust you.  Keep your entry level product affordable, risk free and provide plenty of opportunities to build the relationship.  Remember running a successful, very small business is all about cash flow and relationship. Give your customers every chance to deepen their relationship with you and with your product.

Fill a Need

Another mistake I see my clients make early on in the business start-up process is choosing a product that fills an narrow market need. Usually this need is based on the client’s personal interest instead of a true market analysis. I’ve seen clients struggle to sell designer cat food to co-workers, or premium travel vacations to the ladies in the Fire Hall Auxiliary.  Don’t start a business, even a very small business, without first considering the size and level of need in the market. Also check for competition. If there are only 10 customers in a 100 mile radius and someone already sells high end cat food to them, you will have an uphill climb.

Follow Trends

One way to identify a need is to follow the trend. Social Media is an obvious trend but there are others: green technology, being frugal or alternative health care, to name a few. Beware. There is an art to this part of the start.  For the very small business owner, the product and the market can consume a large part of your day.  Seek a balance between following a trend and finding a product you believe in.  You will want to enjoy your customers. If you don’t like young people, don’t open a tattoo parlor.  You will want to find meaning in helping the people you serve.

Choose the right trend and you can create the good life.  Follow the trends blindly and you may become a success but miss being happy. Choose wisely.

Piggy Back on Someone Else’s Success

Like those birds that live on the backs of water buffalo, look around and see who or what is big in your world. You could create the next killer I-phone application, if you are so inclined.  A client of mine provides rides from the hotel district to the corporate office of a local training institute. Another, moves cars around for the local car dealership when a new order arrives.  Be creative. Let someone else create the need, you fulfill the demand.

What is your product?  Share it with the Working Miracles Very Small Business community by leaving a comment and test the market.

photo by aldoaldoz

Seven ways to bootstrap your business.  We define bootstrapping as building a business using a self-sustaining process that proceeds without external help.

You may choose to go for venture capital -  eventually – but until then what should you be doing?

Podcast: Play in new window | Download (Duration: 5:02 — 4.6MB)