04/ 02/ 2007
by Emily McMackin
Finding gold in a graying America
What will your business look like in 2012? If yours is like most, you will probably see lots of gray heads. Whether the gray belongs to you, your employees,your customers or your clients, it will forever change the way you manage, market and grow your business.
Americans are not only looking and feeling younger than previous generations, they are also working longer. Nearly half of small-business owners surveyed by the NFIB Research Foundation say they never intend to fully retire, preferring instead to phase out of the
business rather than end their involvement by selling or handing it over at a typical retirement age. The fastest growing segment of entrepreneurs, according to the Ewing Marion Kauffman Foundation, which promotes entrepreneurship, are adults over age 55 who are coming out of retirement or leaving corporate jobs to start businesses later in life. This segment is expected to grow as the 78 million-plus baby-boomer generation ages. Workforce trends also indicate a rise in the percentage of employees age 55 and older, despite an expected worker shortage as baby boomers retire. Not only is the workforce aging, so are consumers, with baby boomers alone spending $2 trillion on goods and services as their wealth peaks and inheritances kick in.
Discover how our graying society is redefining retirement and the marketplace, and learn how tapping into this trend will gain profits for your business.
Back in business
At 72 years old, Tom Musser runs three businesses, commutes weekly between his Pennsylvania and Florida offices and isn't ready to slow down. He tried retirement once. It lasted only three weeks before he started getting on his wife's nerves. Three years after selling his $62 million electrical contracting business to a big corporation, Musser bought it back.
"If you've been in business all of your life, and you've had a good experience, it's hard to walk away from that--it gets in your blood," says Musser, who now serves as chairman and co-owner of his Kennett Square, Pa.-based business, The Tri-M Group.
Even during his time off, he never picked up hobbies like golf or boating; he worked--first as regional president for a national contracting association, then as chairman of NFIB's board. When Musser discovered that the corporation to which he sold his company was faltering, he knew that he had to buy it back--not only because he missed the work but also to protect the jobs of his 400 former employees.
"I get excited about working with people and providing them with opportunities--the best way I know how to do that is by building and growing businesses," Musser says.
It wasn't enough to return to his old company; he wanted to try new ventures, too. Along with a partner, he started Premier Integrated Solutions, a Tampa, Fla.-based company that constructs and provides products and services to multi-family homes. Now Musser is also taking on the high-tech world with his recent purchase of a Pennsylvania company that is exploring ways to use optical technology to power electronic devices like fighter jets.
While starting a business (or several) is always risky, Musser doesn't consider it as much of a gamble as when he started his first business in 1964 with less than $300. Though the industries encompassing his businesses are different, his experience building teams applies to all cultures. Technology like cell phones and e-mail--along with his penchant for hiring good managers--makes it easier to keep up with the nuances of running multiple companies. It also gives him the flexibility to take time off, a luxury he couldn't always afford as a younger businessperson.
"If I want to take off a few weeks to travel to Europe, I can," Musser says. "It's the best of both worlds."
This time around, his objectives are different, too. Being an entrepreneur is less about making money and more about having the freedom to live how he wants.
"I have to be involved in something all the time, or I get bored," Musser says. "I couldn't sit at a bridge table if my life depended on it."
Musser depicts what will likely be the reality for many Americans, as the number of self-employed ages 55 to 64 has grown to 1.8 million, up 29 percent since 2000, according to the U.S. Labor Department. Entrepreneurs over age 65 aren't far behind with an 18 percent growth rate. Though the need to make money to maintain a high standard of living, afford health care and build a better nest egg drives some of the growth, finances are a minor impetus, says Bruce Phillips, senior fellow in regulatory studies for the NFIB Research Foundation.
"People today are more likely than their parents to have pensions, 401(k)s and investments," Phillips says. "Instead of buying more things and taking more trips when they get older, some baby boomers may decide it's more useful to invest in a business and try to grow something."
Some are serial entrepreneurs investing in a business as a silent partner or angel investor. Others are corporate retirees pursuing a dream. Still others are consultants contracting with former employers or contacts part-time. Whatever their motivation, the advancement and affordability of technology and the trend of outsourcing and globalization make it easier for them to run a business on their terms, Phillips says.
"With a computer, fax, cell phone and Internet connection, you can run a business from anywhere," Phillips says. "You're limited only by your abilities and imagination."
A hiring gold mine
At 38 years old, Brian Hughes, vice president of Montvale, N.J-based Hughes Environmental Engineering, is too young to consider retirement. Ironically, though, one-third of his employees are over 50 and are dreaming about their golden years.
Though a few have been with the company as long as Hughes has been alive, many are ex-corporate employees who were forced to retire before they were ready or wanted the flexibility that a small business could offer as they approached mid-life. Hughes, whose great-grandfather founded the business, is happy to accommodate, offering adjustable schedules to those who need time off to travel or care for relatives.
When he posts positions, he gets as many calls from middle-aged job seekers as younger ones. Hughes has noticed that many of the older candidates aren't as preoccupied with compensation packages as their younger counterparts and often are more experienced--starting with the interview.
"When I interview people over 50, it's much more relaxed because they're not trying to impress me," Hughes says. "Their accomplishments speak for themselves."
Hughes rejects the stereotype that older employees are unwilling to adapt to new technology; a 66-year-old heads his building automation department. As for the notion that hiring older employees increases health-care costs, Hughes notes that their health insurance is much less expensive than young adults with dependents.
Best of all, experienced employees bring an inherent sense of loyalty not always present in younger workers who often consider the job another rung on the career ladder. Few older employees leave, and Hughes likes the message this sends to the rookies.
"They know this is a place where they can stay for the long haul," Hughes says.
A buying boon
Fifty is the new 30. That's how many baby boomers feel about middle age, says Matt Thornhill, who heads the Boomer Project, a research group that helps ad agencies target consumers over 50. Boomers still see themselves as young with much to accomplish.
Boomer consumers remain one of the most powerful groups in the marketplace, but this generation that built its reputation on bucking authority and challenging established notions doesn't want to be defined by assumptions, Thornhill says.
"Knowing their age won't tell you what stage they are in their lives," he says.
Sales spiked for Chris Graham, owner of Wayzata, Minn.-based Graham Jewelers, when he began targeting his large base of boomer customers. Not only did he increase the font size on his Web site to make it more readable, he began carrying a wider jewelry selection at different price brackets to give boomers more choices. To prove his service was the best, he added a certified gemological laboratory to repair jewelry in-house and hired employees whose age and demographics mirrored the boomers he hoped to attract.
"They have money to spend, but they're going to be choosy about where they spend it, especially if they have lots of other options," he says.
A market is even emerging for the growing demographic of 50-plus entrepreneurs. After learning that some of his friends wanted to start businesses after getting downsized at corporations, Jeff Williams launched a Web-based business to give them the tools to do it.
"These are people in good shape who are spirited and nowhere near ready to take a backseat," Williams says. "They're looking for an adventure--whether that means climbing a mountain summit or starting a business."
Redefining Retirement
Can entrepreneurship be as fulfilling the second time around? Retiree-turned-business-owner Gayle Holmes, 59, discovered it could be better.
Seeking a challenge: After 20 years of living on airplanes, Gayle Holmes was more than ready to retire from her business, which implemented customized mentoring systems for Fortune 500 companies. For two years, she did what she wanted--keeping busy with family and volunteer activities. But something was missing.
At a textile fair in Germany, Holmes found the answer when she met a Brazilian woman who made baby blankets from luxurious fabric. Holmes fell in love with the blankets--and with the idea of opening an upscale baby boutique. She proposed a partnership, and Tirza Baby was born.
Learning curves: Despite her entrepreneurial experience, Holmes faced plenty of obstacles in getting the business going. "If I was looking for a challenge, I found it, from learning the language and how to negotiate down to the dollar, to understanding shipping and customs," she says. Navigating the nuances of retail was also an adjustment. Tirza Baby began as a Web boutique, until Holmes discovered it was more profitable as a wholesaler. Despite the challenges, her tenacity as a seasoned business owner kept her from giving up. "You can't be intimidated by your mistakes," Holmes says. "You have to move forward and think optimistically."
Better with age: Optimism is the most valuable characteristic many entrepreneurs who start businesses later in life possess, says Jeff Williams of www.bizstarters.com. "They believe no challenge is too big," he says. The key is finding a venture to suit your passion and lifestyle, Williams says.
Holmes likes that her business allows her to travel less and primarily use contractors instead of managing staff. "Most days I feel young and vital," Holmes says. "I don't want to stay home and rock in my rocking chair when I still have the health, intellect and capacity to do something relevant."
NFIB.com
Learn how to market to baby-boomer women, the largest demographic of that generation, in the "Web Extras" section of www.NFIB.com/toolsandtips.
