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5 New Business Owner Mistakes

3/30/2017

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Boomers are changing retirement from our parents' version - lounging and early-bird specials - to our own brand: starting our "second act," taking up something we love to do but didn't have time to pursue during our career.

For some of us, it's starting our own business. 
If that's something you're considering, or you know someone who is, read on.

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Launching a business in midlife can be both rewarding and profitable, but too many first-time entrepreneurs make big mistakes in the process, which is why 80% of new companies fail in the first three years.

Here are the 5 most common mistakes we make, and how to avoid them, from Boomer Second Act Coach and author Kathleen Rich-New who has spent extensive time studying successful & unsuccessful new mid-life businesses:
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Mistake #1: Not having a why that’s stronger than your why not
You must have real clarity around the why of your business before starting it. Otherwise, you’ll likely be stymied by the “yeah, buts” ("yeah, but I’m not sure how to do this") and will find yourself giving up before achieving success.
Your vision for your enterprise needs to pass the mind/gut test: Be clearly developed and feel right. If it does, you’ll then be able to view pesky startup problems as minor irritations.

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Mistake #2: Thinking a business loan is the way to go
Since the success rate for new businesses is low, many banks are reluctant to back new ventures, and they’ve become especially restrictive on lending since the financial meltdown.  Typically, the only way you’ll be able to get a loan for your enterprise is by pledging as collateral the equity in your house or your investments or other assets, which means if your business fails, the bank will own the all you've pledged.

Better to finance your business through personal savings, credit cards, opening a home equity loan, or selling some assets.  Estimate how much you’ll need to support the business and still cover your personal expenses for up to three years. (It can easily take that long before turning a profit.) Then, add an additional 50% to that figure, because with launches, things rarely go as planned.

For advice on financing your new business, you might want to work with a free expert consultant from SCORE, the nonprofit resource partner of the Small Business Administration that’s dedicated to educating entrepreneurs and helping them succeed.

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Mistake #3: Assuming customers will automatically find you & buy
For some reason, many first-time entrepreneurs forget this key fact: To succeed, you must be able to sell the product/service you’re offering.  And, frankly, that's not easy.

Potential clients have already established their buying habits and chosen their service providers. You have to woo them away from their comfort zones, offer compelling reasons to make a switch then exceed their expectations so they’ll keep coming back.
People buy for two reasons: to avoid pain or to gain pleasure. If you find their pain and can fix it, you’ll earn their business.

With that in mind, spend the time to comprehensively identify your ideal customers then determine how you plan to target them in your marketing.
Ex: If you plan to enter the skin care business, “anyone with skin” is not your client. You’re actually looking for people over 45, who are concerned about wrinkles and feel a need to look younger and fresher. Go after them to fix their (figurative) pain.

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Mistake No. 4: Starting a business without a clear exit strategy
Figuring out how you’ll eventually unload your company when you haven’t even opened it yet may sound odd. But it’s important to begin with the end in mind as Stephen Covey urged in The Seven Habits of Highly Successful People. This way, the decisions you make about growing the business will be more likely to attract investors who share your exit strategy.

Many new entrepreneurs don’t think about how they’ll recover the time and money they’ll put in. They just figure everything will work out in the end. But if you assume you’ll easily be able to sell your business whenever you’re ready to move on, you’re wrong. Only about 10% of businesses that are put up for sale actually get sold.

The rest go begging because they’re either not profitable enough to attract a buyer or their owners don’t have financial documentation to establish what they’re worth. (This article “3 Mistakes to Avoid When Selling Your Business” can help you develop a smart exit strategy.)

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Mistake #5: Not getting up front buy-in from your family or spouse/partner
Your loved ones will be affected in a variety of ways when you start a business - like stress regarding the money you’ll be pouring into the business, or vacations may not be possible for a while, or long work hours - so you’ll need their initial and continued support.

Starting a business requires an 24/7 mindset and lifestyle, at least in the beginning. The more everyone you care about understands this, the more likely your business will succeed and your relationships will remain intact.

You have been officially alerted...

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10 Tips for Starting a Business Once "Retired"

7/23/2015

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You're heard all about it, here and in the news...Boomers don't retire, they go into their "second act". 

Whether retired by choice or not, many of us take the time we're given to finally pursue that something we've always wanted to do.

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And...for many of us, that means starting our own business or non-profit (some may discover that pursuing their passion doesn't fit into the traditional for-profit model, so starting a non-profit is the best option).

While it can be fairly easy to start something, particularly one that requires no office space or retail location, it isn't right for everyone. To make it work, you need to have the right idea at the right time, plus the skill to get your product in front of potential customers/donors.


So, here, from US News & World Report's Money column, are 10 tips from Boomer second act experts, on how to know if entrepreneurship is right for you.
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First, determine whether your idea is really a good business plan:
What problem does it solve? "Be very honest with yourself in the business idea you come up with," says Jeff Williams, who owns Bizstarters.com, which provides training and consulting to entrepreneurs. If your passion doesn't translate into a viable business, maybe you're better off pursuing it as a hobby or volunteer. "Don't worry about finding the next hot business idea," says Nancy Collamer, author of Second-Act Careers and guest of this show. "Just take a look around you and see where's the need."

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Evaluate your skills:
Sure, you know the business specs, but as an owner, you're chief cook/bottle washer (at least in the beginning as you grow it...), so you must also determine if you'll be good at every aspect of business operation; marketing, bookkeeping, sales, HR...imagine every department in your old company...you'll be all of them and must be good at all of them to survive the deadly first 2 years (when most businesses fail)...

Consider the time commitment involved:
Different business models require varied time requirements; a bricks/mortar franchise will require a whole lot of your time each week (most up to 80 hours), whereas a home based network marketing business like Shaklee or Mary Kay allows you to determine your own hours.  Absolutely determine, up front, the amount of time you're willing to put in per week/month.

Seek the best advice:
Most cities have lots of free and low-cost resources to help beginning entrepreneurs.  Also take advantage of networking opportunities, and conferences & trade associations in the field you're considering.

Determine start-up & upfront business maintenance costs:
Simply put, don't invest money you can't afford to lose, and include in your calculations both start-up costs, and on-going outlay until your business starts turning a profit.
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Gauge your need for interpersonal interaction:
Many people who start businesses in retirement don't want the burden of managing employees. On the other hand, if you're running a one-person business, you'll end up spending a lot of time by yourself, and not everyone likes that either. Decide which setup is the best fit for you.

Embrace technology:
If you're going to run a business, you will need to learn social media, online commerce, website management and other technical skills. "Many of these things are just plug and play," Collamer says. "It really enables you on a shoestring budget to have the look of a high-end business."

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Protect your assets:
Make sure your business structure accomplishes this. The best way to do that will vary by state and by the size of the business. If your business goes down the tubes, you don't want to lose your savings as well.

Don't expect overnight success:
You may need to try several things and radically change your initial business plan before you find a formula that works. "Understand that this whole journey to an encore career is not going to be a linear thing," says Marci Alboher, author of The Encore Career Handbook and VP of Encore.org. "Let yourself take some rides and try on a few things before you decide."

You have been officially alerted.

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