Financing Options When Starting Your Own Business After 50

Starting a business after 50 can be a good way to generate post-retirement income. All businesses however require financing some form of financing. Depending on what kind of businesses you want to start, there are a number of financing options that one can consider when starting your own business.

Financing Options When Starting Your Own Business After 50

Financing Options When Starting Your Own Business

Self financing when starting a business

I was working full-time when I first started my Career Development business.  I also had a partner who was fully employed. I didn’t need a lot of money to start the business as we had already built an externally-accessed office when we were doing a home renovation so my main expenses were a new computer, printer and some business cards.

If you are starting an online business the start up costs are minimal, but be aware that the ongoing monthly costs can quickly add up.  And I have found that over the years my training budget grew larger as I sought out the mentoring of people whose promise exceeded the reality of the help they could give me.

Of course ECommerce stores can require a lot more investment. That is when you might want to consider other financing options.

Raising money from friends and family

If the business financing goes beyond what you can self finance, you can considering raising money from your close family or friends. Collectively, they can typically offer a loan of up to USD50,000. However, asking money from family and friends is never easy.  If there is something you feel uneasy about, then the next financing option might be suitable for you.

Getting a personal loan for starting a business

The next option is to get a personal loan. This is for businesses that require capital of less than USD100,000. This financing option is good for physical stores or online businesses that are more capital intensive than a blog. Usually, banks will require the lender to be evidence of a regular salary or an asset pledge or both in some cases.  Currently, there are even small business loans for folks who are entrepreneurial in spirit. This is an alternative to a personal loan that you can consider.

Raising money from investors

If you are have a bigger ambition, then it is possible to raise money from venture capitalists or angel investors. This investment group is looking to finance business ideas that are scalable and is able to address a big market. If you business idea requires that kind of investment then this is the group you should be talking to. However, getting equity investments is never easy. You might need to delicate at least 6 months to prepare for the kind of due diligence work that these investors require.

Getting money from customers

This is a more radical idea but one that is becoming more common. If you have a business that addresses a pain in the market, there will be customers who might want to pay you upfront so that they get priority in terms of enjoying your solution. This requires you to get out there and talk to potential customers as much as you can. Find out what is really their pain points and create a mock up of your solution. Then present the mock up to your customers again and see if this is something they are looking out. If you get this right, there will be people dying to give you their money first so that they can get their hands on the solution as fast as possible.

Using crowd funding

A more recent financing option is crowd funding. On websites such as Kickstarter, you can list your project or business ideas and explain why the crowd should fund you. These type of funding is more suited for technology or innovative projects that carry a lot of risk.

Hope this is useful for you to start your own business and generate some post-retirement income.

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Jenni Proctor

Hi, I'm Jenni Proctor from Boomers Next Step. Remember when the formula for success in life was simply to strive for good marks at school, gain qualifications, get a great job, work hard and save for your retirement? Yes, I believed it too! For years my husband David and I wanted to develop a business that we could operate anywhere in the world, but both of us were educated to be employees.  We had entrepreneurial dreams and ideas, but still had employee mindsets. 14 years ago I took the giant leap!  I left my job in Education to start a business as a Career Counsellor and Coach, helping mature adults transition from one career path to another, and particularly from employment to entrepreneurship.  I had studied long and hard to gain new qualifications but sadly I hadn’t learnt how to market my new business. About 12 years ago we realized that we were not tracking well towards having the sort of retirement we wanted. We’d saved; we’d invested; and like so many other people we’d also lost some money along the way. It didn’t help that my business was not bringing in as much as I had been earning as an employee. Our dreams of extensive travel and helping our family were being replaced by a growing concern that we would outlive our savings. It seemed that a traditional retirement would not allow us to maintain the lifestyle we wanted. I love helping people plan the next phase of their lives, but we realized that was not going to be enough.  We needed a way to create an income stream that would pay for the travel and other lifestyle luxuries we wanted, that would provide mental stimulation, and would interest us both.

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