{"id":5995,"date":"2016-11-13T10:57:53","date_gmt":"2016-11-13T14:57:53","guid":{"rendered":"https:\/\/kerryhannon.com\/?p=5995"},"modified":"2016-11-17T07:24:42","modified_gmt":"2016-11-17T11:24:42","slug":"how-to-start-a-business-after-age-50","status":"publish","type":"post","link":"https:\/\/kerryhannon.com\/?p=5995","title":{"rendered":"How To Start a Business After Age 50"},"content":{"rendered":"
\n
\n
\"destiny\"<\/a>
Destiny Burns, founder of CLE Winery, photo courtesy of Destiny Burns<\/figcaption><\/figure>\n<\/div>\n<\/header>\n
\n
\u00a0Yes, you can go home again. Ask Destiny Burns. For her, a return to her childhood roots in Cleveland, Ohio last year brought her full circle and inspired her to launch her own business: CLE Urban Winery<\/a>, a handcraft winery and tasting room, in a 4,400-square-foot garage in Cleveland Heights.<\/div>\n
\n
\n
\n
\n
\n
\n

Burns, 52, retired after a 20-year military career as a Navy intelligence communications officer with posts around the world from Japan to the Persian Gulf, and then transitioned to business development positions for large defense contractors in Washington, D.C. But she was ready for something new.<\/p>\n<\/div>\n

\"blog-2903_400\"<\/a>READ ON FORBES<\/a>: KERRY IN THE NEWS<\/strong><\/p>\n

\n

\"startingbiz_50_2016_KT\"<\/p>\n

After celebrating her 50th birthday and finalizing her divorce, she wasn\u2019t sure precisely what her next career move would be, or could be. Her daughter had graduated from college and was no longer living at home, and for the first time in more than two decades, Burns found herself with no dependents and a sudden freedom to do what she wanted to do.<\/p>\n

\u201cI had a real need to do something different and to find myself,\u201d says Burns. \u201cI was making a good living that was very hard to walk away from, but it was draining my soul, rather than feeding my soul.\u201d<\/p>\n

After some soul-searching, she came to the conclusion that Cleveland was where she wanted to spend the next chapter of her life. \u201cNo matter where I happened to be around the world, Cleveland always felt like home,\u201d says Burns.<\/p>\n

Once she made that decision, everything else began to fall into place. \u201cI was always the breadwinner in the family, and now I had a chance with a blank sheet of paper to do something I had always dreamed of: starting my own business. I just needed to figure out what that would be.\u201d<\/p>\n

Burns spent time thinking about the things she enjoyed in life, and her thoughts kept coming back to food and wine. \u201cI\u2019ve been a foodie for years and loved visiting vineyards. I liked sampling and learning about different food and wine as I traveled and lived around the world from the Middle East to Italy to Hawaii. I had the sense that I wanted a lifestyle business that was food and wine-related, maybe even a bed-and-breakfast.\u201d<\/p>\n

After nearly two years of planning and preparation, and a lot of hard work she finally opened her winery. Burns\u2019s business model is based on The Olney Winery, a storefront winery in Maryland that she frequented while living in the D.C. area. \u201cHow cool is this, I thought, when I first went there,\u201d says Burns. \u201cThis business takes the vineyard part and the risk out of it. I\u2019m not a farmer and I don\u2019t want to be.\u201d Like that business, CLE Urban Winery makes its own wine using grapes sourced from California, Oregon, and other parts of the country.<\/p>\n

She sells wine by the glass, from nine different varieties, for $6 to $8. Bottles start at $15 and go up to $25. Other offerings include a wine club and winemaking classes, and wannabe vintners can make their very own batches of wine. She also serves small food dishes, such as meat and cheese, dips, and spreads.<\/p>\n

Senior start-ups are on a roll<\/strong><\/p>\n

More and more workers age 50 and older are starting new businesses. Almost 26% of new entrepreneurs in 2015 were in the 55-to-64 age group, up from nearly 15% in 1997, according to the Kauffman Foundation<\/a>, a Kansas City, Missouri-based entrepreneurship institute.<\/p>\n

Meanwhile, approximately 29 million people\u2014two in five Americans ages 50 to 70\u2014are interested in starting businesses or nonprofit ventures in the next five to 10 years, according to research by Encore.org<\/a>, a nonprofit that promotes second careers focused on improving communities and the world.<\/p>\n

Many older entrepreneurs who have already had successful business careers typically have plenty of things in their wheelhouse\u2014a solid work ethic, management experience, a deep network of business contacts, and often access to capital.<\/p>\n

While each new business owner takes a unique path, there\u2019s a common spine that those who succeed share, according to Kerry Hannon,<\/a> author of What\u2019s Next?: Finding Your Passion and Your Dream Job in Your Forties, Fifties, and Beyond<\/em>.<\/a><\/strong> \u201cMany entrepreneurs at this stage of life are spurred into action after experiencing a life crisis, or major personal shift of some kind, perhaps a health issue, a divorce, or someone close to them died at a young age. And each person had a flexible time horizon for his or her venture. They didn\u2019t make any rash moves. If necessary, they added the essential skills and degrees before they made the leap. They often apprenticed or volunteered beforehand.\u201c<\/p>\n

They reached out to their networks of social and professional contacts to ask for help and guidance. They downsized and planned their financial lives so they could afford a cut in pay or the cost of a start-up. Several were fortunate to have a spouse\u2019s steady income or had some outside investments, retirement savings, or pensions in place to ease the transition to their new line of work, according to Hannon\u2019s research.<\/strong><\/p>\n

You might know you want to do something new but don\u2019t have the nerve to do it yet. Take a breath. \u201cYou have to trust yourself,\u201d says Burns. \u201cFor me, it was really hard to leave a great job and the money behind, but once I decided that I could do this, that this is what I wanted to do, I drew the line in the sand and kept going forward.\u201d<\/p>\n

Seven ways to gear up your entrepreneurial venture<\/h2>\n

1. Get in financial shape.<\/strong><\/p>\n

It can take three years or more to get a business rolling, even a home-based one. Create a budget and see where you can cut back on your expenses. A good place to start is paying down any credit card bills that have a balance. \u201cDebt is a dream killer,\u201d says Hannon.<\/strong> \u201cIt weighs you down and limits your flexibility. But when you\u2019re financially fit, you\u2019re nimble and have more choices. It goes a long way to helping you fund your start-up. And when you\u2019re starting your own business, it tides you over until you can afford to pay yourself a salary \u2014 which can sometimes be a year or more.\u201d<\/p>\n

You may need to downsize your home, or pick up stakes and move to a less expensive place to live like Burns did. Refinancing a mortgage is another option because your living costs are usually the biggest chunk of your monthly budget.<\/p>\n

Consider working an extra year while you lay the groundwork for your business. That\u2019s what Burns did. She arranged to work remotely for her employer for the same salary for an additional year from her new Cleveland home. \u201cI was able to keep my D.C. income in a Cleveland economy and that helped a lot in terms of saving,\u201d says Burns. \u201dI also retooled my lifestyle to save as much money as possible, so I could have that little cushion and afford to take that jump off the cliff,\u201d says Burns. \u201cI did not do this willy-nilly.\u201d<\/p>\n

Keep in mind, while you no longer have an employer 401(k), you can\u2014and should still save for retirement, and sometimes, save even more. Admittedly, when you\u2019re running your own business, retirement savings is probably low on your list of priorities, while you focus on meeting your business expenses. But understanding your retirement plan options<\/a> can help you continue to save for retirement and lower your taxes\u2014in fact, you may even be able to eventually save more.<\/p>\n

Burns, for example, consolidated her previous employer retirement plans into a SEP-IRA, and plans to continue to contribute to it annually until she is 70\u00bd. She also has a pension from the military. \u201cIn Cleveland, the cost of living is much less than it was in the Washington, D.C. area, so I can actually pay my mortgage and my monthly bills with that pension,\u201d says Burns. \u201cThat\u2019s one big reason why I was able to take this leap\u2014because I\u2019m not going to be able to pay myself for a while.\u201d<\/p>\n

If you are under 65, you will need to shop for health insurance. Compare premiums, deductibles, and out-of-pocket costs from multiple insurers. Be sure to compare the plans and prices on Healthcare.gov<\/a>, the site for your state healthcare exchange, if your state offers one.<\/p>\n

A health insurance broker may save time and anxiety. Search for one at the National Association of Health Underwriters<\/a>. Check to see whether your preferred doctors are in-network. Also consider opening a tax-advantaged Health Savings Account<\/a> (HSA). This account works in combination with a high-deductible health insurance plan, which can help keep your health insurance costs down, and you can use the HSA to save money for future health care expenses.<\/p>\n

2. Tap your existing skills.<\/strong><\/p>\n

\u201cWhen I was working for the defense contractor I was focused on business development, and writing proposals for contracts worth hundreds of millions of dollars,\u201d says Burns. \u201cI had to make the case for why the government should give my employer the business, so I had those communication skills.\u201d<\/p>\n

As she was putting together her business plan and looking for lenders to work with, she applied those same communication and analytical skills to sell her concept. \u201cIt\u2019s all about the value proposition for them, what would make my business successful, and analyzing what was already here in Cleveland in terms of wine bars and wine-related businesses.\u201d<\/p>\n

3. Do your prep work.<\/strong><\/p>\n

Find a mentor. Who do you know who might be able to pilot you along your new track? Once Burns decided on the kind of business she was interested in launching, she asked for help from the winery in Maryland that first piqued her curiosity. The owner agreed to be a paid consultant for her. And to find a winemaker, she contacted the director of the wine-making program at Kent State\u2019s Ashtabula campus. That led her to Dave Mazzone, an experienced wine professional who has worked in Napa Valley, and is also a Cleveland native.<\/p>\n

\u201cMy winemaker and I went to Maryland for a week and he worked with their winemaker while I worked with the owner and management staff, to understand their operating procedures, how they started up, and their financial numbers,\u201d says Burns.<\/p>\n

4. Be prepared.<\/strong><\/p>\n

Running a business usually takes more than a humble passion for what you\u2019re doing. You may need to go back to school and get certifications.<\/p>\n

Community colleges, business schools, and other post-secondary institutions are committing more class time to teaching the fundamentals of starting a business.<\/p>\n

Add any needed skills or certifications. You may have to study marketing, finance, and employment law. Sign up for a community college or certification program to get the necessary skills. If possible, take required courses before you quit your current job. Burns, for instance, earned a certification in food service.<\/p>\n

Do something every day to work toward your goal. \u201cDuring the nearly two years before I launched, I made it a point to keep at it every day, even when I was still working and traveling for my full-time job,\u201d says Burns. \u201cSometimes all that meant was making a phone call for some market research, but it helped me crystallize what I was doing. It kept it real.\u201d<\/p>\n

5. Line up sources of funding.<\/strong><\/p>\n

If you\u2019re in decent financial shape with no debt\u2014or at least very little beyond a mortgage\u2014you will likely have several options for funding your start-up. A good resource to learn more is BusinessUSA<\/a>, the federal government\u2019s site for entrepreneurs seeking small business loans. You can search by state to see what special programs might be available to you. Other sources of funding could include personal savings, friends and family, banks and credit unions, and crowdfunding websites such as Kickstarter<\/a> and Indiegogo<\/a>.<\/p>\n

6. Put your professional team together.<\/strong><\/p>\n

You can\u2019t do it alone. \u201cI own my dream and now own my business. But I also have an accountant, I have lawyers, and I use the services of a payroll company,\u201d says Burns. \u201cI need all that support.\u201d<\/p>\n

As Burns\u2019s business gets off the ground, her lender is helping with point-of-sales solutions, e-commerce, and even a website\u2014all tied into her business banking accounts.<\/p>\n

For now, she has one full-time employee, winemaker Mazzone, but she offers no benefits. And she has five hourly workers for the tasting room. \u201cI was nervous about hiring people,\u201d says Burns. \u201cAs an officer in the military, I know about leading and managing people, and how tough it can be.\u201d<\/p>\n

7. Brace for setbacks.<\/strong><\/p>\n

Starting a new business in unfamiliar terrain takes time. It might take off as you planned, as Burns\u2019s winery has, but like most small business owners, you will have setbacks. This is when a solid mentor by your side can be so important.<\/p>\n

\u201cDon\u2019t give up,\u201d says Burns. \u201cI wasn\u2019t deterred when my loan was rejected the first time. I picked myself up and went back to the mentors at the small business development center and tweaked my proposal, then went back to another bank. I had two of three other banks lined up if that one didn\u2019t work. I was determined to get the funding I needed.\u201d<\/p>\n

Finally, you should expect that it will take at least three years before your business gets on its feet financially, but be prepared for it to take longer. \u201cMy business is my retirement plan,\u201d says Burns. I\u2019m young and healthy now, and have the time for it to grow.\u201d<\/p>\n

So far, her business is on track with monthly net revenues exceeding $25,000 in the tasting room and $5,000 from sales to local restaurants, which is enough to service her debt and more, she says. All told, she expects her first-year revenues to top $300,000 and she plans to expand sales to high-end grocery stores and continue to add restaurant accounts. She is also eyeing the possibility of franchising her concept.<\/p>\n

The biggest reward: \u201cI pinch myself to be able to work in this space that I built, bringing business to this neighborhood and being part of a community, and, of course, kicking back and sipping on a glass of my own full-bodied, piquant Syrah.\u201d<\/p>\n

Learn more<\/strong><\/p>\n