Becoming an Entrepreneur When You Can’t Find a Job bulletin.aarp.org/yourmoney/work/articles/
After two decades as a music industry sales executive, James Glay was laid off last year. “It was a real surprise,” says Glay, 60, of Arlington Heights, Ill. “I thought I’d be the last to go because of my tenure and performance.”
Glay immediately called all his contacts, started networking and spent hours applying for jobs online. “It’s just been horrible,” he says. “I had six interviews in one year, and the only jobs available paid less than $10 an hour.” He has taken a part-time job selling sheet music, but most of his energy is devoted to starting a business and website centered on his passion, drums and drumming.
Despite their years of experience, older workers like Glay are facing the highest unemployment rates since the Great Depression. They are also remaining out of work longer than younger workers, with over 40 percent staying jobless six months or longer. And once they land a job, they often must settle for lower pay than they’re used to.
So it is no wonder a growing number of older adults are becoming “reluctant entrepreneurs,” creating their own jobs.
Nearly a quarter of age 55-plus workers who were laid off last year say they’re considering starting their own business, according to a July 2009 Careerbuilders.com study. “I’m seeing an uptick in interest from involuntary boomer entrepreneurs,” says Jeff Williams, head of Bizstarters.com, a Chicago-based coaching firm. “People over 50 have a strong aspiration to be their own boss, and they dream of only doing work they love.”
Entrepreneurship is familiar to this age group. Already, 15 percent of workers ages 50 to 64 are self-employed—and that rises to 25 percent for workers 65 or older, according to government figures.
One reason, says a recent Ewing Marion Kauffman Foundation study, is that older adults often have the experience, cash and contacts to start a business. Another factor may be that lifetime employment with a single company, particularly for men, has fallen dramatically in the last 50 years. “You can no longer count on the gold watch,” says the study’s author, Dane Stangler. “You have to find other ways to earn your daily bread.”
Consulting, starting microbusinesses—those with five or fewer employees—and other forms of self-employment are a natural fit, says Tay K. McNamara, codirector of research at Boston College’s Sloan Center on Aging and Work. “Self-employment offers independence and flexible work hours. Those are advantages older adults really value.”
Self-employment can range from just hanging out a shingle to complex ventures requiring a business plan, advisers and outside financing. Many who start out with trepidation wind up successful and satisfied, often surprising even themselves.
Before he was laid off, Glay had never been tempted to go out on his own. “I didn’t want the hassle, the paperwork or the headaches,” he says. He changed his mind after attending a dot-com workshop. A professional drummer, Glay owns a collection of vintage drums and accessories valued at $100,000 to $150,000. “I realized I could start an online business on a shoestring, since I’ve already got inventory,” says Glay.
He expects to spend about $5,000 on website development. Besides selling drums, he has created www.vintagedrumsandmore.com, a website for his company, Crash Boom Bam. “I want this to be a destination site for collectors, drum geeks and anybody interested in vintage instruments,” he says.
But is it smart to launch a start-up in a sour economy? “If we look at the last four or five recessions, they don’t seem to matter to people starting a business,” says Kauffman’s Stangler. “If you’re driven by an idea, a recession won’t slow you down. In fact, it might spur you on and give you a wider pool of potential employees and less competition.”
Passion is what drove University of Missouri civil engineering professor Henry Liu to leave teaching in 2001 and launch an R&D firm for environmental technology. His latest invention, “green bricks” made from waste byproducts of coal-fired power plants, has been licensed in 11 countries.
It took nine years for the company to return a profit, says Liu. “But profit was not my primary motivation. I was trying to get these environmentally friendly technologies to the commercial market.” Liu works every day, 10 hours a day. “Luckily, I’m in good health at the age of 73, but this way of life might not be for everybody,” he says.
Budding entrepreneurs often underestimate the amount of time and money a start-up requires. New ventures can lead to fame and fortune: Household names like Crate & Barrel home furnishings, Celestial Seasonings teas, and handbag and luggage company Vera Bradley all started small.
In Freeport, Maine, Trina Beaulier’s online and retail business, Simply Divine Brownies, is successful by any standard. Her hand-decorated brownies are tucked into Oscar-party gift bags and handed out at corporate events and celebrity weddings.
“My business has grown 400 percent since I started five years ago, but I have yet to draw a paycheck,” says Beaulier, 61, a retired teacher. “I have 30 people working for me, so everything goes back into the business.” Her advice for other self-starters: Start with enough capital—profit takes time.
Small-business experts agree, and advise against financing a venture with credit cards or retirement savings—it’s just too risky.
After Cincinnati urologist Richard Wendel retired in 1997, he launched a construction firm and employed vocational education students, hoping to give them a leg up. But faced with unanticipated zoning issues, he could complete only five of the eight homes that he’d planned.
“I lost about $125,000,” says Wendel, who now is a volunteer counselor with the nonprofit group SCORE. He uses his own business failure as a cautionary tale for others.
One-third of start-ups fail within two years, according to the Small Business Administration. But James Glay doesn’t think he’ll be among them. Someday, he predicts, he’ll look back at his layoff and call it a blessing.
“If I said I was unafraid, I’d be lying,” he says. “But I really want to make this website a growing enterprise. I never want to go through the horror of job-hunting again.”
Check out the article for links to resources at the end...Don
Co-Team Leader for All Health Pros, Binghamton Area Losers & Laid Off But Staying Strong SparkTeams
Don't die with your music still in you. -- Dr. Wayne Dyer
"We either make ourselves miserable or we make ourselves strong. The amount of work is the same." --- Carlos Castaneda
"You yourself, as much as anybody in the entire universe, deserve your love and affection." --- Buddha rules4humans.com
| Pounds lost: 78.0