Ready to Be an Entrepreneur? Here's How to Make Your Second Act a Success.
From what we see on TV, online and scrolling through social media, startup founders are young, male and living in Silicon Valley. But according to various studies the average first-time entrepreneur is in their 40s. The Kauffman Foundation found that older people started more businesses than younger people in recent years, and another study by the organization found that nearly 70 percent were married and 60 percent had at least one child when they launched their first business. The motives include everything from getting rich to not wanting to work for someone else.
And this isn’t just a “moment” for the older generations — the feeling of being stuck in corporate life has been building for some time.
Two-thirds of Baby Boomers and Gen Xers are not engaged in work, according to a 2013 Gallup poll, with the main reason being they aren’t tied to the company’s mission.
All of this culminates to many in the older generation wanting to jump into entrepreneurship — myself included.
After being diagnosed with lupus in 2010, at 45, I decided to change my eating habits, including getting creative for family night. We always had a pizza tradition for Friday nights, but the processed crust was causing painful flare-ups. So, I began experimenting with cauliflower. Three short years after first premiering at a local farmers market in 2016, my brand, Cali'flour Foods, now has a presence in Whole Foods, Albertsons, Safeway, Walmart and Kroger, among other stores. As of 2018, we were selling a pizza crust every six seconds online.
And while being an older entrepreneur has had its advantages — often more financial support, stronger network and experience — it also has its own set of challenges.
For those looking to make their second act a success as an entrepreneur, here are some ways to prepare — and avoid common pitfalls.
Start working on your business while getting paid by someone else
Want to make sure you don’t go back to the corporate life you currently hate? Then prepare. Start working on your business while you have the comfort of a 9-to-5 job. Take small steps to ensure your idea will resonate, can make money and is a good fit for the market. This may mean your weekends are sitting in front of your computer (vs. enjoying the neighborhood BBQ) or you are spending nights researching (instead of binging on Netflix), but it will help you tremendously when you are ready to hand in your resignation letter.
For instance, if you are a service-based business, you can start building up your client base. One thing I see a lot of people doing is working for free for their first few clients. The reason is that these people will not only give you feedback on what is working (and what isn’t), but they can help with referrals and provide testimonials for your offerings.
If you are a product-based business, launch your store. Start looking at how people interact with your business. Run small tests to see where your target customer is online. This will help you determine where you should be investing your resources and time for building your company.
Create a business plan
I realize not everyone is down with building out a complete business plan, but trust me, this will provide you a lot of insight — much more than a quick investor deck.
By taking the time to think of everything — from marketing to technology and finances — you can see where there are gaps and opportunities.
This isn’t something that takes an afternoon; building a solid business plan can take weeks (if not months), but it will help you determine what it takes for your business idea to succeed. It must be a working document, however, and a business owner must be flexible and willing to learn from their mistakes rather than get discouraged or frustrated. I truly believe that a mistake is actually an opportunity for growth — mistakes must be embraced. While it seems paradoxical, the more mistakes we made in our business, the more our business grew. It was outlandish and not something we planned for in our original business plan.
I would also suggest having a seasoned advisor review the business plan. I know enough to know how much I don’t know, so it’s important to surround yourself with people who know more than you do. This is wisdom acquired from Solomon Short who says, “Half of being smart is knowing what you are dumb about.” Since I had limited experience, I hired a veteran CFO to review the financials of our plan; his expertise helped tremendously.
Get your family on board
This decision can’t just be about you. If you have a partner and/or children, you need their buy-in and support. Otherwise, it is going to make home life stressful.
From the very beginning of Cali'flour Foods, my family has been involved. They are everything to me, so it was absolutely imperative they were on board. In the early stages, I made deliberate efforts to include my husband and children in every aspect of the business — from naming our company to developing product and selling at our local farmers' market in California. And to this day they are still involved.
While your family may not be part of the actual business, they are part of your life. When you are thinking of leaving your corporate job, you need to communicate this desire with your family. To get them on board, come to them with a plan. State how you are going to hustle, including how you can bring in income — either through the new business or a consulting gig while you are getting your company off the ground — and why it is important to you. If there will be anything that will change in their everyday routine, explain the shift and how you plan to ease into it. The more comfortable they feel, the better the transition.
Be financially prepared
This is a big one and can be the difference between making and breaking your business: be as financially prepared as possible.
While you may have more financial stability, you also have more financial responsibility. Make sure you have all your ducks lined up.
When I first started Cali'flour Foods, I was fortunate to have some savings that I could use as capital. Later on, once we were more established, I had built a credit line that I could fall back on.
But much of my early business was built on credit cards and living month to month. It’s a mental challenge to operate this way, especially when you have a team working with you that depend on you for their paychecks.
It is essential to have a back-up plan. It could be having a side freelance or consulting gig while you get your business up and running, or various forms of capital you can dig into if needed. For us, we relied on Shopify and Amazon, which both offer loans. Also, our local bank was extremely supportive in our initial stages, and we have since partnered with them for some fundraising efforts.
Consider all your options when starting your business. Think about developing a strong budget plan, meeting with a financial planner or attending a workshop along with building a strong reserve for cash flow.
Also, it is important to consider changing your daily habits. How much are you spending and how can you cut back? You need to plan for all of this, or as they say, if you fail to plan, you plan to fail.
Create milestones...for going back to work
The world of entrepreneurship is a crazy, roller coaster of a ride. There will be amazing highs and lows — and if you succeed, it is all worth it.
But there are many businesses that fail (some put the number as high as 90 percent by year five). Where do you need to be in your company to ensure you don’t have to go back to the corporate world? What revenue milestones do you need to hit to survive?
While some people just take things day by day, when you have other financial obligations — a house payment, your child’s education, etc.– this isn’t a great plan (and honestly, not a great strategy for anyone).
Decide on what you need for a salary to make it as an entrepreneur. Take into account your lifestyle, expenses and if you have a partner, their contribution. Then work backward. Create small, measurable steps you can take to achieve that goal. Set a timeline and revisit it often to see if you are on track. Adjust if needed but measure yourself up against it.
Lean on your network
Probably the biggest advantage you have as an older entrepreneur is that you have built up your network. Use them.
When you are considering leaving your corporate job (or recently did so), make sure you turn to friends, colleagues and acquittances for support. This could be in the form of an introduction, partnerships, financial backing or guidance. It is who you are surrounded with that will help propel you forward.
For me, when I was first developing Cali'flour Foods, I joined the Specialty Food Association and found an advisor through one of their seminars which I still attend today. This has been a key ingredient to our success, as I am around other like-minded individuals garnering insight and expertise. These industry-experts who may caution against pitfalls or who may make another connection that leads me to our next win.
Also, I met Bob Burke at a seminar, and he became a wonderful mentor. He has more than 30 years in the industry and is well-connected and highly esteemed. He taught me so much about the trade and introduced me to key influencers in the industry. I have since invited Bob to join our board of directors, which has been a tremendous blessing to me personally and to our company.
Finally, I would strongly advise investing in workshops and seminars. These experiences will offer industry insight and provide a solid network of colleagues to support you as you grow.
Have the right mindset
Often, I hear from older entrepreneurs who are worried they can’t compete with their younger counterparts. This mindset can be detrimental to your success. It is important to realize what you have -- experience -- and use it to your advantage.
Pain and hardships are physically or mentally facts of life. It is in these moments where you must embrace a “warrior mentality” and shift your perspective to success, garner grit and resilience, and press through adversity to come out stronger and better.
I believe a warrior mentality becomes stronger with experience because you learn to overcome obstacles and how to navigate and manage them in a more meaningful and positive way.