Don’t wait until it’s too late

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Photograph of Cod Liver Oil capsules.
(Photo credit: Wikipedia)

Some people wait so long to start something of their own that by the time they do it’s much more difficult. Do you have an idea? Have you validated your idea? Have you built up a cash kitty to fund your business?

Trend watchers are saying that more mature people are becoming entrepreneurs because of the down job market. One survey showed that people between the ages of 55 and 64 represented about 23% of entrepreneurs who launched businesses in 2013. This number of mature entrepreneurs was up about 14% from 1996.

On the plus side more mature people often have much experience and skills. This important asset shows through in the success rates of start-ups. One UK survey found that 70% of start-ups founded by people aged 50 or older last more than three years.

If you have been mulling on a big idea and want to set up your own business by bringing this idea to life, you may be overwhelmed by all the things you need to do. One of the first actions you can take is to do a review of your experience and skills as well as your contacts, networks and potential partners. It’s important that you are aware of your personal resources and assets. But it’s just as important knowing what skills you will need to bridge any gaps.

After you’ve done a personal inventory of your resources and assets, you would need to work on finding an idea or developing your big idea that you may have been dreaming about for years. This is where you need to validate your idea. This simply means that you need to do some research to find out if other small businesses are providing this product or service, the size of the potential market, and preparing a brief (one page) business plan.

Some would-be small business owners view preparing a short business plan much in the same way that they would find taking cod liver oil revolting. Yes, it may be important to remain flexible but what about mapping out your business model, your value proposition, your entry pricing and projecting revenues? A business plan no matter how short, sharpens your thinking.

Next up you will need to work on a proof of concept. This simply means that you need to test your idea in the market. You might run a three, six or 12 month test with an initial low price as you try to penetrate the market. This phase is important because it tests all your assumptions. It allows you to experiment and adjust to the realities of the marketplace.

It’s only after you have proven your idea or concept in the market that you need to formalise your business, get a lawyer if you’d need to take on board a partner, for example. If you follow the advice of some business adviser they’ll tell you to register your business, draw up the legal documents and take out a bank loan. For the mature entrepreneur it’s best to work on validating your idea and proving your concept before scaling up. Mature people nearing retirement or retired must safeguard their nest eggs and need to be especially careful to find alternative sources of funding.

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