The Courier & Advertiser (Angus and Dundee)
Business tips for a start-up at 50-plus
In 2015 new pension flexibilities were introduced that allowed people aged 55 and over to take lump sums out of their pension savings to spend, reinvest or perhaps use as start-up capital for a business venture.
Suddenly a whole generation of men and women with a secret and long-harboured business idea were jauntily humming Abba’s I Have A Dream.
To some of us this might sound like a lot of hard work, but these days 50 is the new 30.
The average lifespan in the UK is now 81 years of age and the new buzzword in financial circles is “planning for the 100-year life”. More of us than ever before will live to see our telegram arrive from Buckingham Palace.
This means that if at 50 you have the appetite for a new challenge, there’s more than one route to consider.
You could take early retirement and put your feet up, or you could finally start the career you have always dreamed of – the one where you follow your passion, live your dream and call the shots.
If you’re 50 and have a business idea, you’re in good company. The founders of Coca Cola, KFC and Mcdonald’s were all in their 50s or 60s when they started their businesses. Making a new start after 50 can be “finger-lickin’ good”, and is more common than you think.
In fact, according to AGEUK, the number of self-employed people aged 65 and over has more than doubled in the past five years. This is not so hard to believe when you think about the options that open up in later life.
With children leaving home, we are not pressured with the same financial burdens. Similarly, our savings, investments and pensions may be looking healthier than ever.
But no matter how certain you are that it is the right decision, there is still plenty to think about financially. These are seven points we recommend considering:
• Funding – the costs of setting up a business can be significant. How much capital do you have to set up your business? There may be grants available to help too.
• Structure – what is the best business structure for you? Limited company, sole trader or, if you don’t want to go it alone, a partnership? Each one will have an impact on not just your taxes but your liabilities too.
• Plan – every new venture needs a business plan, preferably one that will provide a framework of goals, strategy, threats and opportunities, and will be “futureproofed” to evolve as you grow.
• Market analysis – look at who your competitors are and identify where you have an edge. Perhaps there is a gaping hole in the market, or maybe you have a niche audience.
• Survival – businesses can take time to establish and generate income. Plan how you will cover your day-to-day costs, regular bills and savings commitments in those first few critical months.
• Connections – think about adding people who could offer professional support to your network. Having a circle of trusted partners including banks, accountants and legal services can help you feel prepared for all eventualities.
• Insurance – what are the financial risks to your business? Consider how you might cover loss of earnings if, for example, you were affected by a health setback.
There is a lot to consider and personalised financial planning can help. With a range of expertise, crucial information and financial advice under one roof, this is where AAB Wealth comes in.
Of course, there is always an element of risk inherent in launching a new venture, but that risk is minimised when you work with us to put all these building blocks into place.
To use the words of one of our clients: “Even with the positive figures, you still have to weigh up the pros and cons, but when is it not a risk to follow your dreams?”