Tue 19 May 2009
Small Business Week: Boomers in Business
Posted by Megan Dorn under Entrepreneurship, Small Business
Of the nearly 80 million baby boomers reaching retirement age in the near future, about 80 percent plan on working in retirement, according to an AARP survey. While some will be opting for some alternate form of traditional employment, what many in this age group have done or are planning to do is start a small business. The Kauffman Foundation research cited in yesterday’s post showed that American’s in the 55-64 age group are starting small businesses at a greater rate than all other age groups.
So why are boomers dominating the entrepreneurship game?
- Baby boomers have the knowledge and experience needed to successfully identify, evaluate and exploit viable business opportunities.
- Baby boomers often have the financial means to fund their startups, therefore making their ventures less risky and even more desirable to potential investors.
- Baby boomers starting businesses because they are tired of their previous careers are finding their passion in their new entrepreneurial ventures.
While it may seem like baby boomers are perfectly primed for entrepreneurship (and don’t get me wrong, many of them are), they still come with their own unique set of challenges. What worries financial advisors about this particular age group is the idea of boomers cashing in their entire nest egg to pay for their new business. The savings that you’ve accrued for your retirement days should be a last resort, advisors say. Instead boomers should be exhausting all other possible channels before they dip into their retirement fund.
The sheer size of the baby boomer crowd indicates that the small business formation for this age group will continue to grow exponentially over the next decade, especially with the depletion of the retirement accounts of so many. Whether they’re trying to replace their previous salaries, pursue hobbies and passions, or keep themselves busy and their minds sharp, baby boomers are going to continue to create businesses in masses and play a large part in building up this nation’s suffering economy.
May 26th, 2009 at 6:54 am
In the Fall of 2004, I closed a business that had been operating continuously for one-hundred twenty-one years. I had been running this company for twenty years, first as Vice President and General Manager, then as President. My mission was to create the estate that the owning family would take home with the retirement of the owner, my predecessor as President, and pass on to heirs. I departed the satellite ground systems development and operations business, where my customers were NASA, NOAA, and DOD, and I joined the family business in 1984. My new customers were printing plants. This career change included moving my young family to a new home across hundreds of miles. It was really worth it, though. In fact, it was a complete and total success beyond anyone’s expectations.
We survived a typical small family business succession struggle, doubled the company’s footprint to one-thousand machines installed in two-hundred ninety-seven production facilities across fifteen countries, and we reduced the cost of making our products and operating our business by thirty-five percent. We paid off the owner’s debt, eliminated the business’ debt, tripled profits and free cash flow, doubled the guy’s net worth and covered his massive tax consequences, too. His daughter and grandson eventually inherited a debt-free nearly seven-figure estate containing cash, marginable AAA securities and prime real estate. Unfortunately, the innovative idea that started the business in 1883 had run its course. It was no longer relevant enough to be the foundation of a going concern. So, I outsourced the brand and the fulfillment of the remaining orders to a consulting client, closed the books on December 31, 2004, and set out to find a new job. I was justifiably enthusiastic. I had one successful career change under my belt, and I expected this job search to be fun, manageable and brief. It was none of these.
Four and one-half years later in the Spring of 2009, I was firmly re-established in a new career with a second tier supplier in the Aerospace and Defense industry. They pay me to negotiate contracts and related business agreements, or in other words, “seal the deal.” I also settle contract disputes and resolve conflicts in our business relationships with DOD, foreign national defense ministries and first tier helicopter manufacturers in several countries. I had previously stumbled through two turns at management consulting, a brief stint as a stock broker, and a move from the New York Metropolitan Area to Northern New England. I also married my second wife during this four and one-half year transition. She is the love of my life, and it is the second marriage for both of us. We miss our children, who are grown and live far from our rural New England home.
The transition to my third career was extended by the U.S. manufacturing decline, the skepticism of employers about career men in their middle age, and my quality of life value, shared by my wife, that we should live much closer to nature than we ever could in the New York Area. The core challenge, though, was finding something that was new and different that I really wanted to do. I subscribed to websites, made plans and updated them, read books and journal articles, and I signed up for training. I burned through several jobs that turned out to be anything but what I really wanted to do. There were many times, when it seemed like the search would never end. One day in January 2007, a recruiter called to pick up our discontinued conversation about a contract employee opportunity with a large aerospace and defense company. I started on January 29, 2007, and in April 2007 I moved over to my present position. With the next eighteen months of on-the-job training, I established myself in this role and completed the transition that had begun in much different circumstances more than four years earlier. I am fortunate to have an exceptional supervisor. He is encouraging, and he showed me the ropes.
Today, I am an accomplished contract manager. I am a professional negotiator, and contracting is what I do. I have a key role on many of our new business capture teams. I’ve negotiated new contracts worth $100-million since I joined the team, and I saved the company $850-million with the contract dispute settlements I negotiated. These were team efforts, and it is a privilege to have so many great professionals with me. I am a “go to person” for several specialty disciplines in the contracting field, and I am mentoring a local small business supplier, who is a valued technology partner, as well. The mentoring and getting all of those deals have been very rewarding. Yet, it is a humbling experience to change from the executive at the very top of a successful company to an individual contributor, albeit in a professional role. I’ve always made a good living by getting things done that make sales and earnings happen. That’s the most satisfying thread of my three careers. My story doesn’t end here, though. There are many things that I know how to do that my present job does not call on me to do. This gap can be frustrating, yet it is also a powerful and persistent motivation, while I continue to seek new and exciting opportunities. I wonder, where will the next one cross my path?
May 26th, 2009 at 11:43 am
Looking for a small business owner who can use my 20 plus years in the ABL and factoring field. I’ve financed every type of business including construction companies.