Recent research from Northwestern University and the Massachusetts Institute of Technology has revealed that the average startup founder is not, in fact, a geek-chic millennial holding a freshly printed Ivy League degree.
A team of researchers combed through data from the U.S. Census Bureau and the IRS on 2.7 million people who started businesses from 2007 to 2014. Their most interesting finding?
The average entrepreneur is actually 42 years old.
It is important to note that some of these entrepreneurs opened local ice creams shops or pizza joints. That said, the data also encompassed businesses like tech firms and venture-backed companies that are likely to see significant growth.
The wisdom and experience these older founders brought to their startups also made them considerably more successful.
Entrepreneurs whose startups recorded the highest growth were about 45 years old, on average, and founders who spent time in previous jobs were 125 percent more successful than their counterparts who launched a company straight out of college.
Would-be entrepreneurs who fall outside the perception of founders as hoodie-wearing, code-typing whippersnappers are no longer the exception to the rule. And that is a good thing.
Old does not have to mean boring
If you are passionate about a product, a different way of delivering a service, or simply want to be your own boss, take confidence from your past experiences — both personally and professionally. You no longer carry the naïveté of youth. Capitalize on your realism and your understanding that it will take plenty of hard work to build something worthwhile.
I was no stranger to the insurance game when I set out to launch my own business. That wealth of knowledge is exactly why I have managed to stay in business over the years.
Before I blazed my own trail, I spent years gaining experience and helping my family-owned business grow. In addition to observing real-life business operations and any accompanying challenges, some of the most important lessons I learned involved my own passions.
As I felt a growing desire to start my own business, I knew I wanted to avoid inventory costs and realized there was something that nearly every American over the age of 16 has or wants: a car. Personal automobiles and transport trucks combine to put a lot of traffic on U.S. roadways, and all vehicles are required by law to be insured.
Based on these observations, I decided to start my own business underwriting and managing commercial transportation risks. It has been an incredible ride — and one that I could not have enjoyed without my previous work experience.
Creating your business plan
In many ways, older entrepreneurs are able to navigate many of life’s routine hurdles more efficiently.
According to the Kauffman Foundation, entrepreneurs older than 45 find mandatory tasks such as obtaining licenses, registering for a tax ID or applying for loans easier to tackle than their younger counterparts.
Regardless of your age or background, however, starting a business for the first time always involves some degree of risk. Making sound strategic decisions early on can help you hit the ground running.
Here are three ways to create a solid business plan that mitigates risks:
Choose your template carefully
Your business plan must suit your company and yourself. For the most part, business plans are either traditional or lean.
Traditional plans clearly outline a company’s first three to five years of business. Investors like traditional plans because they communicate the logistics of how your company will grow and generate profit.
Lean plans are less detailed and focus on the core elements of a business. These plans are structured around key points and take less time to create. They are great starting points for entrepreneurs who are short on time, and you can always develop them further if you need something more in-depth later on.
Know how you will find funding early on
Starting a new business without a clear funding plan can derail your journey before it even begins. Funding is generally easier for older entrepreneurs because they have had time to build up their savings and establish credit.
That said, you might not feel comfortable dipping into your 401(k) or obliterating that nest egg you’ve worked so hard to build. If you explore outside funding, research every possible option thoroughly so you can make informed decisions.
The good news? Your previous experience will reassure investors. They will be much more likely to back individuals who can point to a successful track record and some amount of personal wealth, even if they have no plan to fund their own venture. The ability to save in your personal life suggests you will be able to do the same thing professionally. When you make a pitch, be sure to showcase your experience, success and general competency.
Avoid reckless behavior
Older entrepreneurs tend to have maturity, wisdom and patience working in their favor — this theoretically should save them from careless mistakes. Be diligent in carrying out market research so you can measure risks and make informed, level-headed decisions.
All entrepreneurs should have extensive knowledge about their industries and their own capabilities, along with potential risks. Understand the past, present and future of your respective marketplace, and always consider how your mission should play into those events. A combination of thorough research and your past experiences can help fast-track your new endeavor.
You might not follow in the footsteps of Facebook founder, Mark Zuckerberg, and launch a company at 19, but keep in mind that the social media powerhouse might not exist had Charles Flint not started IBM when he was 61.
Do not be afraid to take a chance at any age, as there is nothing better than devoting your time to something you truly love.