Explain the challenges faced by second career entrepreneurs?
What will be an ideal response?
About a third of retirees who return to work decide to become self-employed. There are three main challenges for such entrepreneurs-adjusting to the entrepreneurial life, reestablishing self-confidence, and keeping personal finances out of the business.
Working for others for most of their life, second career entrepreneurs are likely to have gotten used to having many of the daily chores of running a business done for them. Even for former managers, the mechanics of getting the location cleaned or the payroll checks written may have been things they could take for granted. As entrepreneurs, they have to do these things themselves or arrange to have them done. All entrepreneurs get used to a do-it-yourself approach, and this is a challenge for everyone, but it can be especially trying for late career entrepreneurs, who may have hoped that life would get easier rather than harder later in their careers.
The second challenge comes from a loss of confidence. The stigma attached to older workers' departure from their former job can make a tremendous difference in their level of confidence. Being given early retirement can be seen as a company's effort to replace expensive (if capable) older talent with junior people who work for less. But being laid off or downsized suggests that the person was expendable at best. The difference in labeling makes a difference in the late career entrepreneur's self-confidence.
The third problem is keeping personal finances out of the business. Often when individuals are laid off or given early retirement, they can receive lump-sum financial settlements. Frequently, people intending to become second career entrepreneurs plan to use a substantial portion of these funds to start the new business. Sometimes this happens because second career entrepreneurs see their personal funds as "easy money." Many people who take the easy money are also taking the easy way out. They fail to carefully consider how they will invest the money in the business, and how it will be used. Taking the easy way out can often mean late career entrepreneurs are underprepared for the rigors of business, and they are risking their retirement nest egg.
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