Preparing for the Financial Roller Coaster of Entrepreneurship

Many baby boomers have turned to entrepreneurship by necessity.

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Most people are used to having a paycheck, and there is a great sense of security in it. During the late 1970s, people got paid every Monday, enabling them to really live from paycheck to paycheck. At most, one would have to wait seven days for the next one to be distributed.

Many baby boomers have turned to entrepreneurship. Some do this by choice, while others, called necessity entrepreneurs, have the choice made for them.

Baby boomers' parents raised them to be employees. It was expected that their kids would go to work for a father-like company that would, in return, take care of their kids. Those companies no longer exist. The concept of a secure and steady paycheck is a thing of the past.

Despite a baby boomer’s ability to logically predict the amount of money they'll need upon going into business – along with time predictions to become profitable – there will still come a point when the reality of that missing paycheck will wake them in a cold sweat at 4 a.m.

No mind over matter can erase the fact that the absence of a paycheck is scary. It can take a long time to curb this insecurity, but one of the biggest helps is to become profitable as quickly as possible.

One of the most prominent emotional hurdles for new entrepreneurs is managing cash flow. Being used to a steady paycheck creates uneasiness when transitioning to the ebb and flows of business cycles.

Revenue will decline in some months, while expenses may spike. Managing this fluctuation with a month-to-month mindset can cause an emotional roller coaster. Avoiding this requires a lot of planning and specifically preparing for the ups and downs that may occur.

Baby boomers who want to become first-time entrepreneurs mistakenly think they need to be able to do everything. They watch shows like "Shark Tank" and think those represented are model entrepreneurs. They're not.

Rather than thinking it's necessary to be able to do everything, a baby boomer needs to ask him or herself:

  • What am I good at?
  • What am I not good at?
  • What do I like to do?
  • What do I not like to do?

From there, make a list of those things that are either not a strength or not enjoyable, and find others who can accomplish those items instead.

While many baby boomers may think: “I cannot afford to pay someone to do those tasks,” the fact is they can't afford to do those things on their own.

The other two categories require some analysis as well. Prioritize them based upon favor, and redistribute the things that fall to the bottom of the list as tasks for others.

Just because someone is good at something doesn't mean they should do it. Here are typical scenarios:

  • A very technically savvy person is capable of managing their own website. Instead, he or she should consider outsourcing the development. There are others who can do it with greater efficiency and success.
  • Numbers come easy to some, however, it may make sense for those people to hire someone else to handle their bookkeeping. A second set of eyes in this area is a great thing.
  • Many entrepreneurs are familiar with marketing concepts and could both write and implement their own marketing plans. It may make sense to have someone else handle the mundane tasks like email marketing or creating editorial calendars.
  • Good writers can also use help. They should find someone who can proofread and edit their work. The value of this assistance is great, as it only takes a few minor writing or formatting errors to harm one’s credibility.

This is all about building a support team that can free the entrepreneur from tasks that don't have to be done alone.

Relationships are key to moving from a steady paycheck to being an entrepreneur. A team does not only offer support when it comes to business functions, but also provides a stabilizing effect when the emotional roller coaster begins. Even highly logical and seemingly unemotional baby boomers will experience this crazy ride, and switching away from a paycheck mentality to one of an entrepreneur will certainly help promote an even demeanor.

Are you ready to leave the security of a paycheck? Are you prepared for the emotional roller coaster that you will ride?