We’ve all heard the predictions. Baby boomers won’t retire — they’ll start second careers. And many of them will become entrepreneurs.
What does that really mean? In many cases, they’ll be sole proprietors — people who set up one-person shops that leverage the expertise and contacts built up over several decades of corporate employment.
Sole proprietorships are by far the most common form of startup: 85 percent of all business tax returns are filed by companies with no employees, according to the National Association for the Self-Employed.
Often, these businesses don’t require much start-up financing. Empowered by the Internet, Boomer entrepreneurs often keep overhead low by setting up shop in their homes. And rather than take on the responsibility of hiring employees, they strike up relationships with other sole proprietors to provide key services, such as bookkeeping and marketing.
In many cases, the goal is to generate enough income to replace a salary that’s been left behind. Al Brown, a 20-year veteran of corporate purchasing jobs, quit his fulltime job just before his 50th birthday and started SupplyMex, a one-man consulting firm in Naperville that helps American companies find and manage product suppliers south of the border.
He was aiming to replace 80 percent of his previous salary with consulting income within 18 months of starting SupplyMex. His business is now about a year old, and he’s already 60 percent of the way there.
Still, leaving the world of fulltime employment can be a huge — and frightening — leap into the unknown. It’s important to plot your course carefully, make sure you’ve got a good financial safety net and put together the right team to support your venture.
Whenever possible, start planning while you’re still employed fulltime. “You can do a lot to get ready before you strike out on your own — while you’re still getting a paycheck,” says Terri Mauer, an Akron, Ohio-based interior designer and industry consultant who has operated as a sole proprietor for many years. “Do your business planning and market research. Is the business you want to go into something that will be viable?”
One way to jump-start the process is to hire a business coach. Al Brown worked with start-up coach Jeff Williams of Arlington Heights-based Bizstarters. Together, they sifted through several concepts. “One idea was to buy an existing business that fit my interests and capabilities,” Brown recalled. “Another was general purchasing management and consulting and global sourcing. The third was Mexico.”
Supply management in Mexico won out because of Brown’s extensive experience working there over the years, his relationships in government and industry and because he speaks Spanish.
Gordon Miller followed a more impetuous path to entrepreneurship. After a 25-year career in sales and marketing positions at large office product and information technology companies, Miller woke up one morning bored with work — and dying to scratch an entrepreneurial itch he’d had since boyhood. “When I look back, I always had this entrepreneurial spirit in me. My dad owned a small-town diner for many years back in Iowa where I grew up. I always had that spirit and drive inside of me, and was always asking myself, ‘Why not do your own thing?’
“I sat down with my wife in the living room and laid out what I was thinking. She said, ‘Why don’t you just take 90 days and just go out and test the waters — talk to a bunch of people and see what gets you excited.’ ”
Miller — who is based in Denver — spent a summer networking, focusing exclusively on people in businesses far from his own background. “We all have this tendency to stay within our own small sphere of influence,” he says. “I wanted to meet people I didn’t know and find out what they were up to, and their vision for the future.”
Ultimately, he decided that he liked the idea of being an executive coach, helping other business people manage the same life transitions that he’d been navigating. Today, at age 59, he does small business consulting, writing, speaking and coaching.
Still, Miller advises his clients to be a little less impetuous. “Do what I say, not what I do,” he says with a laugh.
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Mark Miller writes Retire Smart, a weekly syndicated column that appears in more than 30 newspapers. He also publishes RetirementRevised, which covers careers, personal finance, health, travel and lifestyle topics. Mark is president of 50+Digital LLC, a multimedia publishing company dedicated to serving the information needs of the Baby Boom generation.