That is the warning from government advice body Business Link, which has carried out a survey of its advisors.
The poll found that 90% of advisors to www.businesslink.gov.uk felt that small businesses were not yet ready for the October changes.
The new legislation will make age discrimination in the workplace illegal and will affect a number of business activities, including hiring younger or older staff, advertising vacancies and choosing staff to go on training courses.
The survey also looked at the benefits of employing older workers. Three-quarters of respondents said experience was the biggest advantage. Other plus points included creating a more diverse workforce, helping to address skills shortages and reliability.
A lack of understanding of what the new laws actually mean for businesses was highlighted by 80% of advisors as the reason why companies are not prepared. A further 20% pointed to a lack of time.
"Businesses need to make sure they understand the implications of this new legislation," said Jonathan Hollow, portal editor at businesslink.gov.uk. "There are many benefits to having a workforce made up of a wide range of ages. Employment issues can be complex, so managers should seek advice or support if they are unfamiliar with what their obligations are."