At 52, corporate veteran Bob McEwen and his wife sold their home and moved into a friend’s basement so they could cover payroll for their young commercial sign company.
“It’s very humbling,” McEwen said.
A year earlier, McEwen had lost his six-figure salary after being laid off, ending a 22-year career that included working with missile systems and mortgage products.
During his frustrating and unsuccessful job search, McEwen attended a franchise expo and decided to invest in a Signworld business. He opened SignCraft Solutions in Wake Forest, N.C., in August 2009.
“It just felt right,” said McEwen, now 54.
McEwen is among a growing number of baby boomers — people born between the years 1946 to 1964 — who are turning to small business opportunities as a way to build a new career, supplement retirement, or give them a way to spend their time.
Research conducted by the Ewing Marion Kauffman Foundation indicates that the percentage of firms created by Americans ages 55 to 64 grew more than any other age demographic, up 6.6 percent to 20.9 percent in 2011 compared to 14.3 percent in 1996. Firms created by entrepreneurs ages 45 to 54 rose 3.8 percent in that period.
The trend is somewhat predictable, considering the number of baby boomers reaching retirement age mixed with an economy that has limped through the past six years, said Michele Markey, vice president of Kauffman FastTrac, an arm of the Kauffman Foundation that provides training and resources to prospective and current entrepreneurs.
Some boomers are turning to franchising, while others use existing skills to start a business from scratch. Regardless of the motivation, Markey said, starting a business requires consideration and planning, especially for boomers.
“Their (business) on-ramp and off-ramp are much closer together,” Markey said. “The biggest mistake is not spending adequate time planning.”
New boomer entrepreneurs need to understand how much money they are willing to invest, how long it will take to reap financial benefits, and when they’ll be able to exit the business, she said.
They also need to be realistic about the level of commitment a new business will take, surround themselves with resources and mentors, and build a network of support, Markey said. Solid financial advice is also critical, she said.
Jane Bryant Quinn, AARP Bulletin columnist and author of “Making The Most of Your Money Now,” said that training and an excellent business plan are key for boomers who are starting a business because of a need to build or supplement their income.
“At your age, you are going to be spending significant money to buy yourself a job and if that fails, if that doesn’t go well, you are going very hard-put 10 years from now,” Quinn said.
Kerry Dyer, who has 25 years of accounting management experience, decided to start her own firm in July 2010 after being laid off twice in three years.
Dyer, 54, initially started applying for jobs, but she was told she was over-qualified or the employer wouldn’t believe her when she said she would take less pay, she said.
“Finally I said, ‘If I am going to make that little pay, I might as well work for myself and do something I enjoy doing,’ ” said Dyer, whose certified public accountant firm caters to businesses making less than $3 million in revenue and have up to 10 employees. She obtained one client after she sent letters to friends and family. She met her second through her church. Then she joined a networking group.
“That was probably the best move I ever made,” Dyer said.
Dyer works from home in Raleigh, N.C., to keep her costs down and has met personal goals such as bringing in more revenue than her unemployment checks.
“I am hoping within the next two to three years to make what I made in corporate America,” Dyer said.
The advantages of building her own firm include working with other business owners who are passionate about their business, and being able to control every aspect of her business, Dyer said.
But that also means that she is a one-woman show that has to handle computer issues and meet the intense demand during tax season, which requires working from early in the morning to late in the evening and on weekends, she said.
“My husband says I live and breathe it,” Dyer said.
McEwen said he saw his January 2009 layoff coming, but it was still scary. His four kids were grown and out of the house, but he needed an income for bills and retirement.
After a six-month job search, McEwen decided to invest in Signworld, a company which helps entrepreneurs set up businesses that manufacture and distribute commercial signs. McEwen cashed out his retirement and paid $175,000 for equipment.
The company offers training and other support, McEwen doesn’t have to pay royalty fees, and it has more flexibility than an actual franchise, he said.
The first year, McEwen said, was hard, even with his wife’s income from her occupational therapist assistant job.
“There were days we didn’t know how we were going to cover payroll,” McEwen said. “We ended up going more and more in debt.”
McEwen worked 65-hour weeks, and didn’t earn a paycheck for two years. His debt topped out at $80,000 in 2011, but he has since been able to pay off $30,000 as business has increased, he said. Finances have become stable, and the business has continued to expand, so much so that McEwen’s wife was able to quit her job and start working full time for the company in 2011. “Within the next couple of years, we expect our business to be grossing a million dollars or more,” McEwen said.
Recently, a friend reached out to McEwen and said there was an open position at a regional bank.
“I had to think about that for a second,” McEwen said. “I felt like, ‘No, I don’t want to do that.’ I am committed to this. This is my lifestyle. This is where I want to be.”
Source: MCT Information Services