A recent study shows that women typically start a business because they undergo a career change, have passion for an idea that addresses an unmet market need, or see that the environment for the business is right, said Ellen Rudnick, clinical professor of entrepreneurship and executive director of the Polsky Center for Entrepreneurship.
Rudnick presented her findings and offered a variety of tips to the University of Chicago Chicago Women’s Alliance Group during her presentation “Entrepreneurship After Age 45” at the law firm of Holland & Knight, LLP in Chicago on November 20.
“Most women entrepreneurs start their careers in a more traditional corporate environment before embarking on their own,” she said. “This is usually through the result of mergers and acquisitions, corporate downsizing, being asked to relocate, or just not having fun anymore in the corporate environment. Some take early retirement or are semiretired and just want to say involved in the business world.”
Among the advantages to launching a business after age 45, Rudnick said, are:
“The times, they are changing,” she said. “The new middle age is over 50. Large corporations are no longer safe havens. Job satisfaction and control over one’s life rank higher than financial rewards for most of the students and entrepreneurs we work with.”
Rudnick addressed four areas involved in starting a business: vetting the idea, identifying resources, developing a business plan, and financing the plan. “Vetting your idea is probably the most important thing you can do,” she said. “You do market research, talking to potential customers, colleagues, and competitors. Find out what you can do to differentiate your business. Find out how much people would be willing to pay for it, who the ultimate decision maker is on that purchase, and how you get to them.”
Potential resources include economic development centers, your business network, small-business-friendly banks, the internet, books and articles, and advisory boards, Rudnick said. The business team might include a lawyer, accountant, consultant, or business broker, she said.
All entrepreneurs should develop a business plan, regardless of whether they intend to raise capital and regardless of the size of the business, Rudnick said. “The business plan is a roadmap to help you define your objectives, develop your strategy to help you meet these objectives, and figure out how you’re going to prioritize your scarce resources to make money,” she said. “It forces you to look at your business opportunity in a disciplined fashion.”
Most entrepreneurs seldom seek institutional money for their ventures, Rudnick said. In fact, 66 percent self-fund the enterprise, 30 percent get funding from friends, family, business colleagues or “angels” who invest their own funds, and just 4 percent receive venture capital, she said. “The longer you can bootstrap the business before you seek outside capital, the higher valuation you’re going to get when you have to give up equity,” Rudnick said.
— Phil Rockrohr