One of the fastest growing groups of business owners is made up of entrepreneurs in their 40s and beyond. A recent survey by Guidant Financial found that among current busines owners 41% are Baby Boomers and 46% are in Gen X.
But entrepreneurs in this age group sometimes feel like it’s hard to compete with the twentysomethings heading out to Silicon Valley to raise financing.
It doesn’t have to be that way. David Shriner-Cahn, who runs the Smashing the Plateau podcast and a private community for entrepreneurs, shared insights with me recently on how those in their 40s, 50s, 60s and beyond can build the confidence to jump start a thriving entrepreneurial career.
David Shriner-Cahn, host of the Smashing the Plateau podcast, says it is critical for midlife … [+]
Here is an edited excerpt from our interview.
Elaine Pofeldt: What are the challenges people face in midlife when they start a business?
David Shriner-Cahn: The challenges are particularly emotional. For people who tend to be high achieving, when they are insider in an organization, their inbox is overflowing. Their calendar is always full. People always want to get their attention. There is always a line outside their office door. They are always in demand. Their self-identity is tied to who pays them. You go from that when you leave your job, whether it’s voluntarily or involuntarily, to become a consultant, and you go from this place where you are overwhelmed to an empty inbox, an empty calendar. The social structure you had from work is gone. You spend all your time alone. Your self-identity has been shattered.
Beyond that, you haven’t sold anything yet. You have to get up and market and sell yourself. Selling yourself is very different than selling something for a company. You have to pitch yourself. It makes the issues with regard to the self-confidence get blown out of proportion. You wonder “Can I really deliver a solution?” The more time you spend alone worrying about these things, the harder it is to convince yourself you can actually do this. It makes it harder to sell yourself. It’s a vicious cycle.
Elaine Pofeldt: You’ve drawn on your own experience in guiding your clients. Could you tell me how it comes into play?
David Shriner-Cahn: With my job, I saw it was coming for about year. There was a new CEO who had overlapping skills with mine. At some point, the organization would not want to keep paying the number of big salaries they were paying. I saw it coming. And I knew I wanted to work for myself as opposed to get another job.
Especially when I did it in 2006, it was not as common as it is now. The linear path for me would have been to be CEO of another nonprofit organization. I had the track record, skills and connections. I chose the road less traveled. I had basically decided what I wanted to do and how I wanted to it. Someone else decided when it was going to happen. That in and of itself was quite traumatic. The organization was as gentle and gracious as an organization can be when firing someone.
One thing that’s not discussed is there is a lot of shame associated with unemployment. Even if it’s not because of you or your performance, you still are going to feel like you’ve done something wrong. There is shame, trauma. You feel you’ve lost something
Elaine Pofeldt: What is the first thing someone can do to help themselves, if they want to start a business?
David Shriner-Cahn: It’s really important to build a new network. If your next step is to work for yourself and start your own business, you need time to deal with the emotional turmoil. What I recommend to people is they take a sabbatical. I use the word sabbatical because it has a positive connotation in our culture. You need some breathing room to process all the stuff that’s happened.
When you leave a job your income drops precipitously. If you get a new job, your income will be back up to 100%. When you start a business, it takes time. It can take a long time. The average, I heard, is 2 years.
You need a lot of financial runway to maintain your lifestyle. Particularly if we’re talking about people in their 50s and 60s, they’ve been supporting a particular lifestyle for a good bit of time. I would say connect with other entrepreneurs, get yourself into some community or communities of entrepreneurs.
When you’re taking a sabbatical, if you have the financial circumstances where you can afford to not bring in income for months or even a year or two, then spend as much time as you can doing self-reflection. If you can’t afford to do that, another way to take a sabbatical is to find some work that will pay you some money that will help you maintain your lifestyle as much as possible but that you don’t perceive of as being long-term.
You can do things like take a contract job that may be time-limited. A really common first consulting client, even for people whose job has been terminated, is to set up a consulting agreement with their last employer. They may not be in a position to pay you on a salary basis your full compensation. Maybe they can pay you something to do some pieces of what you were doing to provide a little bit of financial stability while you are building your business. As angry as you might be at your employer for firing you, it’s really important to maintain good relationships with them. I’ve heard from many people that their last employer was their first client.
Elaine Pofeldt: How can readers find the right business for them?
David Shriner-Cahn: Some key questions to ask are:
1. What do you love to do?
2. What is it you’re most competent at doing?
3. Whom do you want to serve?
It’s hard to answer these questions on your own. If you’re in a small cohort, you can bounce these questions off of other people.
Then do market research. Ask people what keeps them up at night. What do they struggle with? What are they interested in solving? What do they want to pay someone else to solve? You want to get these kinds of questions answered when doing your market research. Find out as much as you can about whom you want to serve and what they are trying to solve. You don’t have to do this with a lot of people. If you interview 15-20 people you’ll get a sense of what you might be able to offer.
Elaine Pofeldt: How do you reach back out to your former employer?
David Shriner-Cahn: You want to have a conversation with the decision maker. It might be your previous immediate supervisor. The best way is with a live conversation. Use an email to set up a time to speak. Ask for advice. People are usually flattered when they ask you for advice. “Hello, supervisor. I really enjoyed working with you for the last x years. I think we did a good job on the last things we worked on. Could we find a few minutes to speak? I’d like to ask for some advice.”
Elaine Pofeldt: How can people tap into their network most effectively?
David Shriner-Cahn: When you think about reaching out to your network, think about leveraging their relationships, as opposed to selling to them directly. You’ll get more mileage when you think about everybody as a potential referral source at the beginning.
You have a hypothesis of whom you want to serve. I was looking for organizations that were weak when it came to internal operations and financial matters. That was my strength. I would ask, “Whom do you know who has a great program and a great client base, and they’re on pretty good financial footing as far as revenue, but in terms of their internal infrastructure, there are a lot of things they don’t do well—they struggle to produce financial reports on time or with team building issues?” See what they say. They might say my organization, or, “I know so and so.” Always ask “Who else do you think I should speak to. Some will suggest several people. Then it starts to snowball.”
Elaine Pofeldt: What do you recommend to people who feel intimidated about approaching certain organizations because they will be one of the older employees?
David Shriner-Cahn: Keep in mind that with age comes wisdom. You have so many experiences where you have solved the kind of problems the people in this organization are facing. It may be the first time they are facing them. Keep in mind you may have a breadth and depth of experience they don’t have.
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