Start-ups for Grownups			  February 2007
7.4 million boomers are self-employed. Only 44 percent of new businesses last four years. Is launching a start-up late in life risky? 

By Carole Fleck
Move over, Google boys! Older Americans are the new entrepreneurs. Nearly half the country's self-employed workers—7.4 million—are boomers, reports the U.S.
Department of Labor. And that figure is expected to climb as people retire from one career to start another, lose their jobs or simply want the independence and flexibility of working for themselves

"I am willing to bet that over the next 10 years, entrepreneurship is going to increase for people 50 and older, and especially for those 65 and older," says Robert Litan, vice president for research and policy at the Kauffman Foundation in Kansas City, Mo., which advances entrepreneurship in America. 
"Some will become entrepreneurs out of necessity," Litan says. "They can't find a job but still need income, so they'll end up starting their own businesses. The baby boom generation wants to continue working."
But is it wise to launch a start-up or buy a business at midlife? Experts say it's risky at any age, but for older adults, particularly those who finance their venture with savings and retirement funds, the stakes can be painfully high: If a venture goes belly-up, there's less time to work and restore retirement savings. The statistics are sobering. According to the Small Business Administration, 66 percent of new companies survive at least two years but only 44 percent last for four years.
John Challenger, CEO of the consulting firm Challenger, Gray & Christmas and an expert in older-worker issues, says prospective business owners should ask themselves, "How much of your savings are you willing to put at risk to try and leverage greater income in your later years?" 
They also should be prepared to spend most of their waking hours at their new business. "The amount of time, energy and stamina that a new business takes—those are the biggest pitfalls" to success, he says.
Despite the odds, recruiter John McDorman, who has counseled many older workers, says he often advises those clients to consider buying or starting a business if they can't find a job that pays what they think they're worth.
"If you're 55 and looking for a job, you're looking at a long job search," says McDorman, a managing partner at Transition Consulting in Dallas. "You're burning your life savings, and it may take you nine or 12 months to finally land a job. Three or four years later, odds are you're out of a job again because the average length of stay is three to four-and-a-half years. So which is more risky—the job or the venture you controlled?"
To minimize the risk, McDorman suggests buying a "fairly low-end" business with a record of success rather than financing a start-up. Examine the company's financials thoroughly and make sure it has a positive cash flow and potential for growth. [See "Questions for the Self-Starter."] 
McDorman says new owners often run a business better than their predecessors because they're more adept at controlling costs, expanding market share and diversifying the product line and channels of distribution. They're motivated and fresh, he says, compared with previous owners who may be burned out. 
Tom and Sue Ann McGoldrick followed McDorman's advice when they bought Paws in Heaven, a pet crematory in Texas. They increased advertising and distributed brochures to veterinary clinics in neighboring counties while keeping operating costs in line—earning handsome revenues in the first year. "What I'm doing," says Tom, "it's a real labor of love." 
Read below for five inspiring profiles of 50+ entrepreneurs:

Bob Axisa, 52
Business
CertaPro Painters, Staten Island, N.Y.; residential and commercial painters; started 2005
Previous jobs 
Information technology for 21 years at J.P. Morgan Chase & Co.
Investment 
$90,000, including cost of franchise
Motivation
At age 50, he figured it would be difficult to get another job without taking a pay cut. 
Worst moment 
His first dissatisfied customer.
Best moment 
His first really satisfied customer. "When you go into people's homes, you have to make sure everything is done right." 

Silas Lumpkins, 73
Business 
Lumpkins Courier Service, Cleveland; started 2004
Previous jobs 
Medical records and supplies courier for a medical clinic
Investment 
$6,000 to buy and insure two vans
Financing 
Savings
Hours worked 
18 a week (two days)
Employees 
1 full-time, 2 part-time
Years to turn profit 
Immediate
Biggest challenge 
Hiring reliable employees
Motivation 
The clinic decided to outsource its work to contractors and he wasn't ready to retire. "I loved what I was doing and I was familiar with it."
Worst moment 
None.
Best moment 
When he was awarded a contract for the courier service, which renews each year.
Bottom line 
"It gives me independence, to work for myself, and I can render services. My drivers are happy and I'm happy. I have peace of mind."

Judy Finch, 58
Business 
Echo Valley Campground, Tremont Township, Pa.; started 1998
Previous jobs 
Human resources management; engineer 
Investment 
$500,000 acquisition
Financing 
Owner financing for 2 years, then bank loan 
Hours worked 
60 a week
Employees 
3 part-time
Years to turn profit 
Three
Biggest challenge 
In the spring and fall, there are RVers and other campers, "but in the winter it quiets down. It's really tough to get the bills paid."
Motivation 
She disliked her job and thought it would be a "neat lifestyle" to own a campground (even though she'd never been camping). 
Worst moment 
"The bank didn't want to give me a loan because I'm a single woman in a high-risk business."
Best moment 
"Having really nice people enjoying the campground and telling me how beautiful it is."
Bottom line 
"I just needed to do something different. It's been a struggle, but I'm still here. It was a huge risk, but I have really adapted to the area."

David White, 53
Business 
Heaven's Best Carpet and Upholstery Cleaning, Bristol, Tenn.; started 2001
Previous jobs 
30 years at Eastman Chemical Co.
Investment 
$12,500 franchise acquisition
Financing 
Paid cash; still has retirement funds and savings 
Hours worked 
50-60 a week
Employees 
2-3
Years to turn a profit 
Three 
Biggest challenge 
Learning (with corporate support) how to clean carpets and match solvents with stains; and dealing with employees-two had drug or alcohol problems.
Motivation
Took early retirement at 48. "I always wanted to be my own boss for as long as I can remember."
Worst moment 
Cleaning stained church pews-they looked worse when he finished, he said. 
Best moment 
When he figured out how to clean the pews. "I went back three times."
Bottom line 
"I had never cleaned carpets before. I chose the business for the exercise. And I liked to travel around the area." 

Tom & Sue Ann McGoldrick, 55 & 56
Business 
Paws in Heaven pet funeral home and crematory, San Antonio; started 2003
Previous jobs 
Information technology
Investment 
$1 million acquisition 
Financing 
Half of Tom's 401(k) funds and savings to put down 25 percent; financed 75 percent with loan
Hours worked 
80-plus a week 
Employees 
3 full-time, 4 part-time
Years to turn profit 
Immediate, and nearly doubled revenue in three years
Biggest challenge 
Finding financing 
Motivation 
Tom's old job ended and he wasn't willing to retire or re-enter the corporate world. "My wife and I decided we wanted to go into business for ourselves." 
Worst moment 
"Dealing with people who have unreasonable expectations and are disappointed with the service. Those are hard moments for me because we try so hard." 
Best moment 
"When we get unsolicited cards and very nice thank-you notes from clients." 
Bottom line 
"We wanted to do something we feel good about when we go to bed at night. We treat every animal like we wanted our dog Apollo treated. We do a lot of grief counseling with our clients."

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