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Starting a business after age 50

Key takeaways

  • Tap into your passion and skill sets to help define and drive your new business.
  • Keep personal debt in check and keep saving for your retirement.
  • Weigh options carefully to finance your new business.
  • Expect it to take 3 years to get your business on its feet financially.

Yes, you can go home again. Ask Destiny Burns. For her, a return to her childhood roots in Cleveland, Ohio last year brought her full circle and inspired her to launch her own business: CLE Urban Winery, a handcraft winery and tasting room, in a 4,400-square-foot garage in Cleveland Heights.

Burns retired after a 20-year military career as a Navy intelligence communications officer with posts around the world from Japan to the Persian Gulf, then in her mid-50s transitioned to business development positions for large defense contractors in Washington, DC. But she was ready for something new.

After finalizing her divorce, she wasn’t sure precisely what her next career move would be, or could be. Her daughter had graduated from college and was no longer living at home, and for the first time in more than 2 decades, Burns found herself with no dependents and a sudden freedom to do what she wanted to do.

“I had a real need to do something different and to find myself,” says Burns. “I was making a good living that was very hard to walk away from, but it was draining my soul, rather than feeding my soul.”

After some soul-searching, she came to the conclusion that Cleveland was where she wanted to spend the next chapter of her life. “No matter where I happened to be around the world, Cleveland always felt like home,” says Burns.

Once she made that decision, everything else began to fall into place. “I was always the breadwinner in the family, and now I had a chance with a blank sheet of paper to do something I had always dreamed of: starting my own business. I just needed to figure out what that would be.”

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Burns spent time thinking about the things she enjoyed in life, and her thoughts kept coming back to food and wine. “I’ve been a foodie for years and loved visiting vineyards. I liked sampling and learning about different food and wine as I traveled and lived around the world from the Middle East to Italy to Hawaii. I had the sense that I wanted a lifestyle business that was food and wine-related, maybe even a bed-and-breakfast.”

After nearly 2 years of planning and preparation, and a lot of hard work, she finally opened her winery. Burns’s business model is based on The Olney Winery, a storefront winery in Maryland that she frequented while living in the DC area. “How cool is this, I thought, when I first went there,” says Burns. “This business takes the vineyard part and the risk out of it. I’m not a farmer and I don’t want to be.” Like that business, CLE Urban Winery makes its own wine using grapes sourced from California, Oregon, and other parts of the country.

She sells wine by the glass from 18 different varieties. Bottles start at $20 and go up to $35. Other offerings include a wine club, wine education classes, live music, tango lessons and yoga classes. She also serves small food dishes, such as meat and cheese, dips, and spreads.

Senior start-ups are on a roll

Many older entrepreneurs who have already had successful business careers typically have plenty of things in their wheelhouse—a solid work ethic, management experience, a deep network of business contacts, and often access to capital.

While each new business owner takes a unique path, there’s a common spine that those who succeed share, according to Kerry Hannon, author of What's Next? Finding Your Passion and Your Dream Job in Your Forties, Fifties, and Beyond. “Many entrepreneurs at this stage of life are spurred into action after experiencing a life crisis, or major personal shift of some kind, perhaps a health issue, a divorce, or someone close to them died at a young age. And each person had a flexible time horizon for their venture. They didn't make any rash moves. If necessary, they added the essential skills and degrees before they made the leap. They often apprenticed or volunteered beforehand.“

They reached out to their networks of social and professional contacts to ask for help and guidance. They downsized and planned their financial lives so they could afford a cut in pay or the cost of a start-up. Several were fortunate to have a spouse's steady income or had some outside investments, retirement savings, or pensions in place to ease the transition to their new line of work, according to Hannon’s research.

You might know you want to do something new but don't have the nerve to do it yet. Take a breath. “You have to trust yourself,” says Burns. “For me, it was really hard to leave a great job and the money behind, but once I decided that I could do this, that this is what I wanted to do, I drew the line in the sand and kept going forward.”

7 ways to gear up your entrepreneurial venture

1. Get in financial shape
It can take 3 years or more to get a business rolling, even a home-based one. Create a budget and see where you can cut back on your expenses. A good place to start is paying down any credit card bills that have a balance. “Debt is a dream killer,” says Hannon. “It weighs you down and limits your flexibility. But when you’re financially fit, you’re nimble and have more choices. It goes a long way to helping you fund your start-up. And when you’re starting your own business, it tides you over until you can afford to pay yourself a salary—which can sometimes be a year or more.”

You may need to downsize your home, or pick up stakes and move to a less expensive place to live like Burns did. Refinancing a mortgage is another option because your living costs are usually the biggest chunk of your monthly budget.

Consider working an extra year while you lay the groundwork for your business. That’s what Burns did. She arranged to work remotely for her employer for the same salary for an additional year from her new Cleveland home. “I was able to keep my DC income in a Cleveland economy and that helped a lot in terms of saving,” says Burns. ”I also retooled my lifestyle to save as much money as possible, so I could have that little cushion and afford to take that jump off the cliff,” says Burns. “I did not do this willy-nilly.”

Keep in mind, while you no longer have an employer 401(k), you can—and should—still save for retirement, and sometimes, save even more. Admittedly, when you’re running your own business, retirement savings is probably low on your list of priorities, while you focus on meeting your business expenses. But understanding your retirement plan options can help you continue to save for retirement and lower your taxes—in fact, you may even be able to eventually save more.

Burns, for example, consolidated her previous employer retirement plans into a SEP-IRA, and plans to continue to contribute to it annually until she is 70½. She also has a pension from the military. “In Cleveland, the cost of living is much less than it was in the Washington, DC area, so I can actually pay my mortgage and my monthly bills with that pension,” says Burns. “That's one big reason why I was able to take this leap—because I’m not going to be able to pay myself for a while.”

If you are under 65, you will need to shop for health insurance. Compare premiums, deductibles, and out-of-pocket costs from multiple insurers. Be sure to compare the plans and prices on, the site for your state health care exchange, if your state offers one.

Tip: A health insurance broker may save time and anxiety. Search for one at the National Association of Health Underwriters. Check to see whether your preferred doctors are in-network. Also consider opening a tax-advantaged health savings account (HSA). This account works in combination with a high-deductible health insurance plan, which can help keep your health insurance costs down, and you can use the HSA to save money for future health care expenses.

2. Tap your existing skills
“When I was working for the defense contractor I was focused on business development, and writing proposals for contracts worth hundreds of millions of dollars,” says Burns. “I had to make the case for why the government should give my employer the business, so I had those communication skills.”

As she was putting together her business plan and looking for lenders to work with, she applied those same communication and analytical skills to sell her concept. “It’s all about the value proposition for them, what would make my business successful, and analyzing what was already here in Cleveland in terms of wine bars and wine-related businesses.”

3. Do your prep work
Find a mentor. Who do you know who might be able to pilot you along your new track? Once Burns decided on the kind of business she was interested in launching, she asked for help from the winery in Maryland that first piqued her curiosity. The owner agreed to be a paid consultant for her. And to find a winemaker, she contacted the director of the winemaking program at Kent State’s Ashtabula campus. That led her to Dave Mazzone, an experienced wine professional who has worked in Napa Valley, and is also a Cleveland native.

“My winemaker and I went to Maryland for a week and he worked with their winemaker while I worked with the owner and management staff, to understand their operating procedures, how they started up, and their financial numbers,” says Burns.

4. Be prepared
Running a business usually takes more than a humble passion for what you’re doing. You may need to go back to school and get certifications.

Community colleges, business schools, and other post-secondary institutions are committing more class time to teaching the fundamentals of starting a business.

Add any needed skills or certifications. You may have to study marketing, finance, and employment law. Sign up for a community college or certification program to get the necessary skills. If possible, take required courses before you quit your current job. Burns, for instance, earned a certification in food service.

Do something every day to work toward your goal. “During the nearly 2 years before I launched, I made it a point to keep at it every day, even when I was still working and traveling for my full-time job,” says Burns. “Sometimes all that meant was making a phone call for some market research, but it helped me crystallize what I was doing. It kept it real.”

5. Line up sources of funding
If you’re in decent financial shape with no debt—or at least very little beyond a mortgage—you will likely have several options for funding your start-up. A good resource to learn more is BusinessUSA, the federal government’s site for entrepreneurs seeking small business loans. You can search by state to see what special programs might be available to you. Other sources of funding could include personal savings, friends and family, banks and credit unions, and crowdfunding websites such as Kickstarter.

6. Put your professional team together
You can’t do it alone. “I own my dream and now own my business. But I also have an accountant, I have lawyers, and I use the services of a payroll company,” says Burns. “I need all that support.”

As Burns’s business got off the ground, her lender helped with point-of-sales solutions tied into her business banking accounts. For now, she has one full-time employee, winemaker Mazzone, but she offers no benefits (he has benefits through his wife’s employer). And she has 8 hourly workers for the tasting room. “I was nervous about hiring people,” says Burns. “As an officer in the military, I know about leading and managing people, and how tough it can be.”

7. Brace for setbacks
Starting a new business in unfamiliar terrain takes time. It might take off as you planned, as Burns’s winery has, but like most small-business owners, you will have setbacks. This is when a solid mentor by your side can be so important.

“Don't give up,” says Burns. “I wasn't deterred when my loan was rejected the first time. I picked myself up and went back to the mentors at the small-business development center and tweaked my proposal, then went back to another bank. I had 2 or 3 other banks lined up if that one didn’t work. I was determined to get the funding I needed.”

Finally, you should expect that it will take at least 3 years before your business gets on its feet financially, but be prepared for it to take longer. “My business is my retirement plan,” says Burns. I’m young and healthy now, and have the time for it to grow.”

All told, her first full year revenue topped $500,000. She also continues to expand sales to high-end grocery stores and continue to add restaurant accounts. She is also eyeing the possibility of franchising her concept.

The biggest reward: “I pinch myself to be able to work in this space that I built, bringing business to this neighborhood and being part of a community, and, of course, kicking back and sipping on a glass of my own full-bodied, piquant Syrah.”

Tax-free retirement income? Sounds good.

A Roth IRA can be a powerful way to save for retirement since potential earnings grow tax-free.

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*Reprinted with permission, Crain's Cleveland Business. © Crain Communications, Inc.

Views expressed are as of the date indicated, based on the information available at that time, and may change based on market or other conditions. Unless otherwise noted, the opinions provided are those of the speaker or author and not necessarily those of Fidelity Investments or its affiliates. Fidelity does not assume any duty to update any of the information.

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