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How to set the stage for your encore business

Starting a business for the first time later in life? These steps can help ensure your new venture is built to last.

minute read


    If you’ve been thinking of turning experience into a new business venture, it’s not too late.

    According to a recent survey by SCORE, a nonprofit organization and resource of the U.S. Small Business Administration, people who start new businesses for the first time as they near retirement age — known as encore entrepreneurs — are fueling a major movement. They’re shaping American business as the largest sector of entrepreneurs in the country.

    The number of first-time local business owners over age 55 is on the rise, and 21% of these encore entrepreneurs are in their first year of ownership.

    Whether you plan to turn industry contacts into the clients of your new consulting firm or trade in your medical scrubs for a catering apron, you can take steps to help lay a strong foundation for encore entrepreneurship.

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    1.  Determine the right legal structure for your business

    The difference between having a good idea and owning an encore business is determined in large part by the business structure you choose. This is one of the more consequential decisions you’ll make for your business because it affects how much you’ll pay in taxes, your daily operations and how much of your personal assets you’ll be risking. Will you have a business partner, seek outside investment or bootstrap and keep your business simple and small? Questions like these are essential in choosing the right structure. Your answers should also inform and be included in your business plan.

    If you’re just starting out and don’t plan on having employees, you may be thinking about a sole proprietorship. This business structure could simplify things for you and potentially give you maximum control, since you wouldn’t have to consider shareholders or legal partners in your business decisions.

    Along with its benefits, a sole proprietorship also has limits. For example, a sole proprietor is personally liable for all the company’s debts and obligations; there is no separate business entity to carry any of the responsibility. For encore entrepreneurs with significant nest eggs, this type of risk may not be worth taking, as there are other structures that might offer more protection. Moreover, if you are interested in building a legacy company and eventually transferring ownership to a family member, by definition, you can’t remain a sole proprietor. Plus, without the ability to sell stock, sole proprietorships often have a harder time raising money and qualifying for bank loans.

    The fact is, there are many types of business structures. No choice suits every business. It’s important to do a little research to find the one that’s best for you.


    2.  Test your business idea

    One of the main reasons startups fail is a lack of market for what they’re selling. As a business owner, you can’t predict the future, but you can and should measure demand before investing heavily in your encore venture. 

    The Lean Startup methodology offers one proven way to know whether you’re on the path to creating a desirable product. First popularized in the Bay Area’s tech community, the methodology favors experimentation over planning and relies on customer feedback versus intuition. You may have heard of some of Lean Startup’s concepts like “minimum viable product” and “pivoting,” which businesses of all types and sizes now use. According to this method, you want to introduce the most basic version of your product or service and then ask your customers for feedback that can help inform changes to its design.

    If you already sell a product or service, arrange a focus group. Lean on early customers for feedback. What do they want more of? What could they do without? Present your expanded business idea to them and ask whether it’s something they would like to try. Customer interviews are a powerful tool for validating a new product. The insights you get can also help you refine your new offering and increase your chances of making it big in the market.


    3.  Take inventory of your financial resources

    Like most business owners, encore entrepreneurs tend to tap savings accounts (76%) and personal credit cards (37%) to finance their businesses. While exciting, capitalizing a business involves risk. How much cash do you have on hand? What other income streams could you live on or sink into your business to generate more clients, more sales and more work for yourself?

    Make a list of your assets, including savings, retirement and business accounts and home equity. Then list all your liabilities, such as credit cards, rent or mortgage, and car payments. Subtract what you owe from what you own to get your net worth. No matter how this inventory exercise turns out, you’ll have better cash flow information to help with decision-making.

    Always think through the worst-case scenarios. You should consult your financial, legal and tax advisors. Run the numbers to project what could happen to your financial picture if your business fails. You don’t want to sacrifice quality of life. These are your golden years, after all. 

    It may be easier for accounting and tax purposes to keep your personal and business accounts separate. Chase offers products that can be helpful in the early expansion stages of your encore business, including business checking accounts and cash management solutions.


    4.  Build a brand and an online presence

    Even if you have, or plan to have, a brick-and-mortar business, statistics say your customers will encounter your brand online first. For example, people search Google for websites about 5.6 billion times per day. In fact, if a business doesn’t have a modern website, searchers might think the business isn’t reputable and click away.

    Your encore business is more than a collection of products or services. It’s a brand with a personality, one that can help set your business apart. Names, taglines, logos, colors — these elements influence how people perceive your business, whether in person or online. Think about your target customer. How will they identify with you? What kind of values do you want to express to them? How do you want them to feel about your business? Is your business cool? Serious? Playful? Pick a personality that you think will resonate with the kind of customers you’d like to serve. Make sure all the images and words you feature on your website reinforce your business’s personality, including its name and tagline.

    When coming up with a tagline for your business, it’s helpful to look to brands people admire for inspiration. Consider TED, the company that hosts conferences and then distributes talks for free online. The media company has an inquisitive personality. Its tagline, “Ideas worth spreading,” invites people to tune in and share what they learn. Try to keep your tagline short, descriptive and evocative. Then run it by a focus group of friends or industry contacts to make sure it’s making the desired impact. Think about how you want your slogan to appear next to your logo. For your logo, consider working with a graphic designer who specializes in branding. Also, consider putting your tagline in your social media bio and at the top of your website. 

    Your website is the online hub of your business. Anything about your business that might be useful to your customers should be on your website. Social media posts, emails, videos and more can then point people to your website, where visitors can learn more about your business or make a purchase. There are plenty of easy-to-use website-building platforms if you want to do it yourself. But a professionally designed website that brings together all the elements of your brand may be worth the investment.

    Remember that your brand can’t be everything to everyone. It must be focused, especially in the early days. Document the purpose, mission and values of your business. These statements are foundational for your brand and the story you will continue to tell. They also can help steer marketing and even business decisions as your business evolves.


    5.  Find talent to fill the gaps

    Skills gaps exist in every business structure. This is where a little strategy goes a long way in the hiring process. When looking to round out your staff and your operations, it’s important to complement your own skill set, not replicate it. This is especially important in the beginning if your funds and resources are lean.

    Look within your network first. Do you have a family member or a friend who can lend a hand part-time? In-network help could keep your startup costs down. If you need to cast a broader net, there are several online services that let you manage your hiring from start to finish. If you choose that route, don’t rush your job posting. Consider including these things in your post:

    • Your company’s mission
    • Must-have qualifications
    • A pay range based on qualifications
    • A screener question or two to identify responsive, quality candidates

    Know that the right business partner in your corner can accelerate progress — and profits. If you’ve done your homework, adding a new member to your team could be worth the investment.

    When in doubt, ask for help. Talk with business owners who’ve built something similar. You can also contact your local Chase for Business representative and visit the Knowledge Center to find helpful tools and resources.


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