Seniors In Business
Chalk it up to the baby boomers' refusal to fade into the background, but 21st century retirement bears only a vague resemblance to the "golden years" of past generations. True, some traditionalists continue to spend newfound leisure time on the golf course or at bridge club. A significant number, though, are viewing retirement as an opportunity to start over with new plans, new goals, new careers.
As reported in a study by the Pew Research Center's Social & Demographic division, about 54% of workers ages 65 and older say they continue to work primarily because want to. What's more, a fair number choose self-employment - 15% among those ages 50 to 64 and 25% among workers 65 or older.
The reasons seniors become entrepreneurs - sometimes dubbed seniorpreneurs, gray entrepreneurs or third age entrepreneurs - vary. Some have always wanted to start a business, but lacked the financial or family flexibility to follow through. Some see it as a progression of their career. Some must go this route because they lack acceptable alternatives and enough money to retire early. Others simply can't warm to the idea of enforced leisure.
Whether deciding to remain in a current job, seek new employment or start a business, older citizens do have choices to make - and resources to help them do so.
Evaluating Your Options
Older entrepreneurs may find starting a business easier than their younger counterparts because they have confidence born of experience, industry credibility, a career track record and established assets. On the other hand, business ownership can eat up every second of free time and may pose a serous threat to retirement savings.
The American Association of Retired Persons (AARP) suggests a
planned approach to deciding whether to launch an enterprise or
take on a salaried job. Here are some pointers:
- Determine how much risk is acceptable. Consider time investment, financial safety nets, health coverage cost and employability in the job market if the business fails.
- Decide whether your current salaried position can provide the same rewards as self-employment. Sometimes, negotiating new, creative assignments, more flexible hours and a change in department can be as satisfying as going it alone.
- Consider a transition plan. Some older entrepreneurs hold on to full-time jobs while developing their companies after-hours. Others switch to part-time schedules to focus on their own businesses.
- Take time to prepare. If entrepreneurship is a real possibility, devise a strategy a year or so before retirement looms. Enroll in a small business start-up course. Or write a business plan, and then invite professional input from support organizations such as SCORE (www.score.org) or a Small Business & Technology Development Center (SBTDC).
- Take family into account.Launching a new business can eat into time spent with loved ones - even more than a regular job. And when a small company is home-based, the issue becomes too much togetherness.
- Failure, unfortunately, is always a possibility. What will happen to your family if your business is slow to make a profit or sinks entirely? Plot out the scenarios with a financial planner and make sure that you have an adequate cushion.
- Explore other investment options.When launching a venture strictly for monetary reasons, other options may generate better returns. Consult a financial specialist for guidance.
The Entrepreneur: Access to Capital
A small-business grant would be a terrific source of start-up money - if they were more available. In fact, while the U.S. government provides a slew of other resources, neither federal nor state government agencies offer grants for starting a company or paying off debt or covering operating expenses. This includes "special" gifts for minorities, veterans, the disabled or anyone else. Given this, loan programs are the most likely funding source for senior entrepreneurs.
While the federal government does not lend money directly to small businesses, it does offer lender guaranties, a security blanket that encourages private banks and lending institutions to approve loan applications. These include a variety of low-interest loan programs for business owners who may be finding it tough to procure traditional loans. The SBA offers the most for senior entrepreneurs, including:
- Basic 7(a) Loan Program
All 7(a) loans are provided by non-government lenders, which include the majority of American banks, as well as some non-bank lenders. Available on a guaranty basis and structured on SBA requirements, this program requires that applicants be both eligible and creditworthy. In a nutshell, applicant businesses must: meet SBA size standards, be for-profit, lack business or personal resources to come up with financing and be able to demonstrate repayment.
- CDC/504 Loan Program
In cooperation with Certified Development Companies, the 504 Program, a financing tool for community economic development, offers small businesses long-term, fixed-rate financing for major fixed assets, such as buildings and land. Usually, a 504 project includes a private-sector loan secured with a senior lien covering up to 50% of the project cost, a loan secured with a junior lien from the CDC covering up to 40% of the cost and a contribution of a minimum 10% equity from the applying small business.
- Microloan Program
This program, which recently received additional funding through the Recovery Act.works with commercial lenders to provide loans in amounts too small (up to $35,000) to be of interest to larger loan programs. Small business owners are the target market, particularly those with minimal capital requirements.
Because SBA loans come through commercial sources, business owners must visit their local participating banks or lending institution.
Visit www.sba.gov/localresources/district/or/financing/OR_ORPLPCLP.html or a list of SBA lenders.
Lenders typically consider the following criteria:
- Ability to Repay. Banks look at business cash flow and collateral, so start-up owners should put together a loan package detailing a projected repayment plan.
- Credit History. Obtain your personal credit rating well before applying for a loan. Errors take up to four weeks to rectify, so make sure it is correct and up to date. For help in interpreting or evaluating your credit report, consult an accountant or banker you know well.
- Equity. Even start-up business owners usually must invest some personal funds into the company. The amount depends upon the type of loan.
- Collateral. These are those personal and business assets that can be sold to repay a loan. Most loan programs, including microloans, mandate at least some collateral.
- Experience. Entrepreneurs lacking experience in their new businesses should not apply for loans unless they plan to take on partners or staff familiar with the field. In addition, the owner should take time to work in the discipline first, as well as enroll in related classes.
For additional guidance on small-business funding, visit Business.gov at http://search.business.gov/startLoans.html.
The Entrepreneur: Procurement
Some of the most lucrative business relationships for seasoned entrepreneurs come through government sector contracts. Big government purchases a host of goods and services, including appliances, office equipment, automobiles, clothing, food items, electronics and much more. Obtaining one of these deals is both an art and a science, but is eminently doable. Refer to these protocols when bidding on government work.
- Research and prepare. The Small Business Administration's Web site (www.sba.gov) offers an in-depth overview of policies and procedures around loans, including tips and contact numbers. Other good sources are: the National Center for Small Business Information (ncsbi.fit.edu) which offers classes on government contract procurement at all levels. Specific opportunities are available at FedBizOps.gov (www.fbo.gov/index), including a comprehensive listing of agencies and departments that regularly request bids. The SBA likewise provides an extensive online list of government procurement offices at http://www.sba.gov/about-offices-list/2.
- Understand that competitive bidding may be part of the process. Federal guidelines make the lengthy process well-nigh mandatory in most cases. For this reason, do not expect a quick decision in vendor choice.
- Ensure a solid CCR profile. The CCR is a government-wide registry for organizations wishing to do business with the federal government. Besides allowing for automatic payment transfers when doing business, it also requires a brief company profile - a real opportunity to do a little marketing.
- Understand the bidding process. The government issues an "Invitation to Bid" when work is available. Though instructions are detailed, deadlines can run 30 days or less. For this reason, always keep company information handy in boilerplate form. This makes it fairly simple to save time by to filling in final details according to the job specifications.
- Design a competitive bid. Low pricing is not always a deciding factor in winning a bid. Experts point out that companies with strong histories and excellent performance records typically land the best contracts; so emphasize these points in your proposal
- Network and collaborate. Companies too small to handle contracts in their entirety should team up with other businesses who also want government work. In addition, economic development organizations provide deep support for business owners needing to connect with peers and colleagues for contract procurement.
Older entrepreneurs can get plenty of support in establishing post-retirement businesses - and smart ones do. But once operations are humming, many find themselves wanting to help someone else in turn. Becoming a mentor allows an older, experienced individual to share expertise, wisdom and guidance with younger people in a similar profession or line of work.
A responsible mentor typically:
- Provides support by listening to a protégé's needs and concerns
- Guides protégés through problematic situations
- Helps protégés establish personal and professional goals
- Provides professional opportunities, where appropriate
- Commits sufficient time to the relationship
Though a mentor-protégé relationship may develop from academic and professional liaisons, several organizations assist in connecting the right people.
The Service Corps of Retired Executives (SCORE) is likely the best-known mentor group, with chapters in towns and cities nationwide. A nonprofit association, SCORE is dedicated to educating entrepreneurs and facilitating the establishment, growth and success of small businesses. The SCORE counselor staff consists of retired business owners and professionals who share their knowledge and experience at no cost to the client. To learn more about getting involved, visit www.score.org.
Established in 1991, Menttium is a private company
aiming to foster development and diversity in the business
community by designing mentoring systems consistent with the
mentor's business strategy. Programs include formal one-to-one
mentoring processes; formal internal group mentoring process;
and self-directed processes. In all cases, the company matches
mentors and protégés through a personalized
process. More information is available at www.menttium.com.
icouldbe.org is a volunteer organization in which mentors work with at-risk teens online to help them with educational and career planning. Youngsters participate through their schools or after-school programs, choosing mentors matching their interests. Volunteer mentors must commit to at least one hour per week.
Elder Wisdom Circle (www.elderwisdomcircle.org) enrolls people age 60 or older to counsel younger folks who visit the Web site. Currently, 200 volunteer mentors belong, answering questions on topics ranging from careers and business to relationships and bereavement.
AARP (www.aarp.org) continually updates its data base of mentor and volunteer opportunities for seniors, so check back occasionally for new entries.
Without the social support inherent in a 9-to-5 job, senior entrepreneurs may find they lack connections to keep them in the professional and communal loop. Of course, local chambers of commerce, universities, professional organizations and senior centers have always provided opportunities for older entrepreneurs, but these days, the easiest way for the harried business owner to keep in touch is by getting online.
Web sites such as Facebook (www.facebook.com) and LinkedIn (www.linkedin.com) offer quick access to virtually thousands of fellow subscribers. Moreover, savvy seniors have found that setting up a business page on one of these sites is a simple, inexpensive way to market.
Social networks usually are free, requiring only an e-mail address and password. Most ask for a profile (rather like a resume), which can be as limited or extensive as you wish. These networks are relatively easy to navigate, providing numerous prompts for any function, so even beginners should be able to get around.
Although hundreds of pages have sprouted since the movement began a few years back, a handful court the baby-boom generation. These merit a look:
Eons.com (www.eons.com) is the online community for those born between 1946 and 1964 (or earlier). An offshoot of Monster.com, the employment site, Eons.com allows subscribers to keep in touch with friends and family, pursue interests and explore new areas. Dozens of groups, many devoted to business and technology, are open for membership.
Seniorocity, an online community for mature adults and seniors, enrolls members age 40 and older. In addition to postings, videos and photos, the site hosts a slew of special interest groups, with business and money among the most popular.
AARP, the granddaddy of senior citizen organizations, hosts a lively online community, too. Featuring more bells and whistles than most sites (e.g. featured discussions and videos), members can participate in discussion groups on numerous topics, and also submit videos, journal entries and photos. For details, go to www.aarp.org/onlinecommunity.
Opting for the Workforce
Seniors who decide entrepreneurship is not for them still have some chores ahead of them - particularly when seeking new careers. Sometimes, the best way to decide what to do next is to get outside help.
A qualified career counselor will help clarify career goals, write resumes, teach interview skills and put together an individualized career plan. This comes at a cost, though, so it's a good idea to pursue other avenues first.
An excellent resource is the AARP Foundation Senior Community Service Employment Program (SCSEP). This initiative helps senior job seekers sharpen skills, obtain training and, ultimately land jobs. Visit http://www.aarpworksearch.org/ for details on how to get started.
Community colleges likewise have a lot to offer senior job seekers, with classes on everything from business management and computers to course work in specific disciplines. Many offer internship programs and job search services. To locate one in your area, check out the Community College School Guide, www.collegebound.net/community-school-guide.
Upon establishing a post-retirement career path, most senior job seekers will need an updated resume. Extensive skills, experience, perspective and a mature work ethic are assets, and a resume should emphasize this. Here are some guidelines culled from AARP and other experts.
- Know what a prospective employer seeks. Check a company's Web site to learn about its business strategy and products and how it treats employees. The exercise will help position personal experience and skills most effectively.
- Highlight accomplishments. Think about the positive results created for previous employers. Use verbs such as "established," "developed" and "organized" to introduce the accomplishments.
- Mind the length. One page may not be enough for a long, distinguished career, but more than two pages is probably overkill; highlight only the most salient aspects of work and experience.
- Keep it relevant. Non-work experience and hobbies are useful to include—but only if they highlight skills or interests relevant to an employer
- Address gaps in work history. In the case of lengthy absences from work, identify activities (e.g. classes, volunteer work) for that period that showcase work-related skills.
- Avoid personal information such as age, height, weight, sex, race or religion.
- Offer an e-mail address. This has become the preferred method of communication for those who handle hiring at companies.
Once a job interview is in place, seniors may encounter some anxiety, which is certainly understandable. For the best outcome, experts suggest handling the entire process systematically.
- Prior to the interview, try to relax. Deep breathing, exercise or a good book all can help.
- Be professional: Timeliness, appropriate dress, clear diction and positive body language are important.
- Most employers will ask: How can you add to the success of our company? Be prepared to answer.
- Expect questions on personal behavior, such as "Tell me about a time when you had to deal with a difficult boss." Describing real-life examples is the best way to go.
- Emphasize achievements and skills rather than your length of experience.
- Answer questions directly and concisely. Always ask for clarification if a question is confusing.
- Avoid negative remarks about former employers or co-workers.
- Respond to age-related questions by focusing on skills and job-related experience. Emphasize willingness to work with younger people, offering examples from a prior position.
- Ask informed, specific questions. Researching the market and company prior to the interview, visiting the corporate Web site and reading articles about the firm in question are all sound practice.
- At the end of the interview, reaffirm your interest in the job. Summarize your strengths and how you can help the organization. Finally, ask about the timeline for a decision.
- Do not mention salary unless the interviewer brings it up. If asked, inquire what range the employer has in mind. If pressed, say "negotiable."
- Follow up with a hand-written thank you note, and wait a few days (unless you're told to call) before checking back.
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