We recently reported on the increase in the number of under 35’s starting their own business following the recession. New research suggests that the number of over 55’s starting their own business may also increase, following a change in pension legislation.
Under new legislation individuals have been afforded greater flexibility with their pension and are now entitled to take a greater lump sum of their pension tax free. For aspiring business owners the change in pension legislation may have revolutionised the way in which they views their pension pot. Research conducted by AXA Wealth reported that 10 percent of over 55’s planning to retire in the next two years are contemplating using part of their pension to fund a new business start-up, with a further 9 percent considering investing into an existing business.
However, care and consideration should be taken into account when deciding whether to start a new business and/or invest in an existing business. Following these simple tips can help to ensure that you are prepared to launch your start-up:
1) Use your experience
Draw on your personal experience and knowledge that you have acquired during your business career. The knowledge you have may place you at an advantage in helping you to identify gaps and opportunities that competitors may have neglected.
2) Construct a detailed business plan
Create a comprehensive business plan; take the time to strategise and establish clear aims and objectives. This will ensure you set goals that are both realistic and attainable as well as creating a time-line. Within your plan identify the marketing materials readily available and how this will factor into your budget. Do not under estimate the significance of social media which is becoming an increasingly cost effective way to raise brand awareness at zero expense and minimal effort.
3) Finance & funding
When using your pension as the primary source of funding for your start–up, consider the possible long term implications in relation to the impact of your quality of retirement. Consulting a specialist commercial solicitor at the earliest opportunity will allow you to determine which legal form is most suitable for your business as well as ensuring your personal assets are safeguarded if the worse case scenario were to happen.
If you require advice regarding a business start up contact Farleys, our experienced business solicitors can advise you across all aspects of commercial and corporate law. For further information call 0845 050 1958, please complete an online enquiry form.