When Shirley Green, 52, was laid off early this year after 23 years at an IT data center, she decided she wouldn't wait for the company to rehire her. Instead, she took early retirement and launched her own business, Personal Records Organizer LLC, a Westminster, Colorado, consulting firm that helps families deal with elder-care issues. The idea for the business grew from her own experience: "I was taking care of my mother and giving advice to people taking care of their older parents," she says.

Although Green had no entrepreneurial background, she recognized a niche market and decided to capitalize on it, despite her fears of start-up. "I'd be lying if I said I wasn't sacred spitless, but I took the leap," says Green, who will officially open her business in September 2003 and expects to bring in $70,000 by year-end 2004.

Green is part of a growing number of people over 50 who are becoming entrepreneurs after long-time careers. According to Jeri Sedlar, a New York City executive search and transition coach and co-author with Rick Miners of Don't Retire, REWIRE!, there are three factors driving this trend:

  1. People are living longer and are in better health.
  2. People are recognizing the need for additional income, especially those forced into early retirement because of layoffs and buyouts.
  3. People are looking for intellectual stimulation.
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A recent AARP study found that 76 percent of retirees work post-retirement because they need the money, while an equal number reported they worked for the enjoyment of it. Joanne Fritz launched her own business in Scottsdale, Arizona, after she was laid off as an associate director at Elderhostel, a nonprofit educational travel organization for seniors. "I recognized it wasn't worth spending too much time and money in this economy-and at my age, 62-looking for another job," says Fritz, CEO of American Dream Publishing and the Web site Not Yet Retired. "I knew I'd be better off with my own business."

Joe McCain, 54, of Greenville, South Carolina, concurs, even though he wasn't laid off from his sales job: "I saw the writing on the wall. After 50, you're marked. I wanted to control my own destiny." In 2002 McCain opened his own location of The UPS Store, one of 13 such franchises in his metro area. Today, the store grosses anywhere from $10,000 to $30,000 per month.

Other retirees find they don't need to change industries; they become consultants to the field in which they worked. A recent study conducted by The Conference Board found that 80 percent of companies rehire retirees as consultants. Dow Chemical regularly hires retired technical staff as consultants. And Delphi Corp. reports that 65 to 70 percent of the retired engineers it brings back as consultants wind up working on projects they worked on while employees.

Merle Meyer, 63, and his wife Linda, 60, who live in the Louisville, Kentucky, area, owned a resort and bed and breakfast before they retired in the early '90s. Merle was lured back into the hospitality industry as a consultant for several years; when he retired again, he and Linda decided to travel for a while, but they missed the industry. Now they're back in it as interim innkeepers, and they also run the INNterim INNkeeper Network, a matchmaking service for interim innkeepers and those in need of their services. "We didn't want a full-time responsibility," says Meyer. As inn sitters, the couple earns about $148 per day, plus traveling expenses.

Defining Your Drivers
Not everyone is cut out to be an entrepreneur. "You have to know what motivates you. Learning? Creativity? Accomplishment? Recognition? That will guide you on what business, if any, is going to make you happy," says Sedlar, who dedicates much of Don't Retire, REWIRE! to helping readers identify what she calls "drivers."

A post-retirement business ought to fulfill passions and interests. "You have to love it, or you won't stick with it through the tough times," says Fritz, who began her post-retirement business selling on eBay, an endeavor she expected to gain more pleasure and profits from than she actually did. That's when she switched gears and launched her consulting firm. "Helping other people was an important part of what was missing before," she says.

Passion is what led Ed Metz, 68, of Montville, New Jersey, to Bob Crosby's Bob Cats, a Swing-era band that plays major venues around the country. Metz had spent much of his adult life as an investment banker. "I have always loved music. I'd been playing in bands since I was in college," Metz says.

A jazz pianist, Metz had been with the Bob Cats for about 10 years, when bandleader Bob Crosby passed away. In 1995 he and a now-deceased partner acquired the rights to the band name from the Crosby family estate. When he retired from investment banking in 2000, dedicating himself to the band was a natural. Metz pulls in about $150 per day for his role in the Bob Cats. The band earns about $50,000 a year on a dozen or so gigs.

The Meyers were looking for a flexible schedule and an opportunity to travel. Their interim innkeeping business serves both needs. The couple can be selective, working when and where they want. "For instance, in January and February we inn-sit in San Antonio, where it's warm, and in July we go to the Pacific Northwest, where the weather is cool," Meyer notes.

Identifying a Market
Knowing what you want is a good start, but it won't mean a thing unless someone else will value what you offer. A post-retirement business is like any other in this regard: There's no business if there are no customers.

In fact, a built-in customer base is what attracted McCain to his franchise. "I used Mail Boxes Etc. and The UPS Store when I was in sales, so I was familiar with them," he notes. "We looked at the demographics and the franchise to help me figure out where to locate myself for maximum foot traffic."

It was the Meyers' own experience as full-time innkeepers that informed them about a market. "We knew innkeepers get burned out being there 24/7. That's when a lightbulb went on. We realized there was a major need for interim innkeepers, so owners could have a break," explains Meyer.

Challenges

Retirees starting a business are likely to face slightly different challenges than other entrepreneurs. Marilyn Tellez, owner of MJT Consulting, a career coaching firm in Yakima, Washington, specializing in people over 50, says capitalization can be a big problem. "A lot of older people are afraid of tapping into their retirement money or taking a loan, but the fact is, your business won't work if you don't fund it," she maintains.

Another issue, especially among retirees who have been forced out early, is a lack of confidence. "People come off that experience pretty demoralized," says Fritz. "They need to give themselves time to build their self-esteem and psych up again before they can start something new."

Another challenge retirees face is insufficient technical know-how. "Learning how to use computers and software is a must," says Tellez.

There are indications that older Americans are becoming more computer literate. The "Consumer Internet Barometer"-a quarterly survey by NFO WorldGroup, Forrester Research and The Conference Board that tracks Internet usage among Americans-found that people ages 55 to 64 with online experience rose from 59 to 64 percent from 2001 to 2002.

Having to market a business can throw some retirees for a loop. "I find that a lot of older women were raised to believe that selling oneself was unseemly," Tellez says. "They have to get beyond that in order to market their businesses."

There are many community resources where people can acquire new skills. Community colleges, professional organizations, the chamber of commerce, senior centers and AARP often offer classes in everything from marketing to finance to graphics.

Planning
"Take your time and fiddle with your plan before you commit to it," advises Fritz. A smart plan can be the difference between success and failure.

"Seek counsel, suggests Sedlar. "Find people you trust, and create your own little board of advisors."

Older entrepreneurs are at an advantage because they can tap into a lifetime of professional contacts. McCain regularly speaks to other small-business owners, including his competition-other franchises-in his area. "We bounce ideas off each other," he notes.

On the horizon is company-sponsored post-retirement business planning. A number of organizations have charged their human resource departments with the task of finding ways to assist retirees-to-be in exploring entrepreneurial options.

"Companies are beginning to see the tangible benefits of helping employees transition into productive retirement," says Sedlar. "We're still a long way off from having this kind of planning offered across the board, but at least some companies, like Chase/J.P. Morgan and Proctor & Gamble, are taking a look at it."

According to Sedlar, the advantages for companies include improved fiscal and physical health for retirees, who in turn rely on fewer costly retirement benefits. Also, companies benefit from the retained institutional knowledge that can be sourced when former employees open post-retirement consulting firms instead of forgoing the industry for the fairway.

Hours & Skills
Be prepared to work hard and tackle new challenges. With his background in sales, McKain had no trouble marketing and advertising his business; it was keeping the books that proved most challenging. "It's a lot of work, and I'm still learning," he says. "I'd never done it before."

Sedlar suggests neophytes shadow a pro before launching their own companies. "Just because you were good at your job doesn't mean you're going to automatically be good at business," she cautions.

Another surprise, especially to those who spent a lifetime working with colleagues, is how lonely owning your own business can be. For those working solo, Tellez recommends joining professional organizations. "These are good places not only to network, but also to socialize," she notes.

Another way to stay connected is to rent a shared office. "This is good for people who are used to working around others because it keeps them from becoming too isolated," explains Sedlar.

Motivated by passion and money, older entrepreneurs aren't showing any signs of fading. "We're too young to retire to a rocking chair," Meyer says. "I don't think we'll ever be old enough for that."

Next Step
  • AARP has developed a Web site exclusively for small-business owners over 50.
  • SCORE is a nonprofit organization comprised of retired executives who offer free start-up advice.
  • Individual franchises and organizations hold seminars geared at retirees, some of which can be found through the International Franchise Association.