Gen X Aims to Create Financial Security Through Entrepreneurship

Genx starting a business

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By Gib Olander, Chief Product Officer, Northwest Registered Agent

We experienced the rise of personal computers and the internet. We witnessed the fall of the Berlin Wall and the election of Nelson Mandela as the first Black president of South Africa. The first generation named after a letter in the alphabet, Generation X may have grown up with the debut of “The Simpsons,” but today we are motivated by more serious concerns.

The fact is that Gen X, my generation of nearly 50 million adults in the U.S. born between 1965 and 1980, is worried about having enough money for retirement. Having lived through the Great Recession of 2008, when home mortgage foreclosures skyrocketed and the stock market lost half its value, many are unsure if they can retire at 65 and concerned about their nest eggs.

In response, a growing number of Gen Xers are launching businesses as a key component of their retirement strategy, aiming to build financial security. With over 20% of new businesses failing in their first year and close to 50% in their first five years, however, aspiring Gen X  business owners are seeking reliable ways to create stability in their entrepreneurial endeavors.

Let’s examine some key questions to help achieve success:

Young woman gen x financial security

What types of businesses can Gen Xers start to maximize their financial security?

For those of us in our “sandwich years,” many taking care of parents and kids at the same time, businesses that offer flexibility are paramount. According to current trends, and the experience and skills of Gen X, some of the best businesses with growth potential include:

  • Consulting services: Many Gen Xers have deep professional experience and can offer consulting in their field of expertise, from management to marketing, teaching to tech.
  • Technology solutions: Given Gen X’s comfort with technology, these include developing software, launching need-based apps and providing IT support.
  • E-commerce: Starting an online store is a natural for members of Gen X, whether selling niche products, offering handmade goods or drop shipping.
  • Creator/influencer: With a great idea and a laptop, you can work wherever or whenever, creating digital content or serving as a social ambassador for brands while having time to spend with family as you transition into empty nesters.
  • Financial Services: Offering financial planning, investment advice or tax prep services can leverage Gen X’s financial acumen to assist individuals and small businesses.
  • Real Estate: As a steady income stream, Gen X should consider investing in real estate, whether through property management, rentals or renovation/flipping.
  • Health and Wellness: Opening a fitness center, yoga studio or wellness business can tap into the growing demand for these health-related services.

What are the most common pitfalls for Gex X and other first-time entrepreneurs to avoid?

Starting a new business is exciting, but it comes with real-world challenges, especially for those who may have never run their own business.

The first thing to avoid is a lack of market research. Failing to understand your target audience, the competition and the marketplace can be remedied by putting together a solid business plan. Both of these can be aided by AI platforms like ChatGPT. Some useful market research prompts include “Identify the key trends in the [industry] market over the past five years,” “Analyze the competitive landscape for [product/service],” and “Provide a detailed demographic profile of the target market for [product/service].” In developing a business plan, consider prompts such as “Outline the key components of a business plan for a new [product/service] startup,” “Create a financial projection for the first three years of operation for [business idea]” and “Describe a marketing strategy and sales plan for launching [product/service].”

Your business effectively starts with getting clients. Before you can generate cash flow, however, you have to estimate the funds needed to start and sustain the business. On its website, the Small Business Administration offers a spreadsheet to calculate startup costs, whether for brick and mortar establishments, service providers or online businesses. Equally important is knowing all of the legal and regulatory requirements, such as permits, licenses and other items to remain in compliance. as well as allowable tax deductions, such as rent, utilities, salaries, insurance and maintenance.

What do Gen Xers need to do to open their business legally and efficiently?

Beyond permits, licenses and trademark searches, every aspiring entrepreneur needs to choose the appropriate business structure, a separate legal entity designed to protect you and your personal assets. These span from sole proprietorship to S-Corp and C-Corp to LLC and LLP, based on your business needs and future goals. This choice affects liability, taxes and regulations. You’ll need to apply for an EIN (Employer Identification Number) from the IRS and register your new business name with your state government. You may also need to register for a “Doing Business As” (DBA) if operating under a different name than your own.

Akin to your company structure, opening a business bank account is essential to keep personal and business finances separate. And then there’s creating your unique “Business Identity” and communicating with the public, which in the modern world requires buying a website domain name, web hosting and SSL verification certificate, building a customizable website and social sites, and securing proprietary email addresses and a business phone line. A registered agent can help with all of these.

How can Gen X and other entrepreneurs quickly adapt to changing market conditions?

As a key provision in your business plan, you need to stay agile to survive. Older first-time business owners must overcome a tendency to “stick to your vision” as market conditions, trends or customer needs change, but businesses that endure are flexible enough to pivot to new approaches, products or services as needed.

Here are some fundamental strategies for staying nimble in the face of change:

  • Regularly monitor industry trends, emerging technologies, consumer behavior and market reports through such “information traps” as Google Alerts, X (Twitter) lists, Facebook groups, or other discourse communities such as Reddit.
  • Listen to customer feedback, use NPS surveys, monitor Google reviews, etc., in order to innovate and improve your products or services
  • Utilize digital tools and platforms to streamline operations, boost customer engagement and conduct data analytics that can provide insight into performance metrics and trends. Consider easy-to-use no-code and low-code platforms to create websites, apps and automated workflows without extensive programming knowledge.
  • Avoid a myopic focus on short-term profits in favor of long-term growth, monitoring your cash flow and finances to ensure you have the resources to weather market shifts.
  • Nurture customer relationships, and establish quarterly business reviews with your most important clients, through ongoing engagement, in order to foresee shifts in their needs that allow you to quickly adapt.
  • Double down on your people focus by connecting with other entrepreneurs, mentors and industry experts to share insights, and to provide and receive support, especially among other older business owners whose experiences can keep everyone focused on the shared goal of financial security.

Gib Olander is a business strategist and chief product officer of Northwest Registered Agent, whose new product, Business Identity, is helping entrepreneurs start businesses quicker than ever. Business Identity offers corporate formation, domain buying, web hosting and customer support all from one trusted provider.

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