Retirement start-up guide: you're never too old to start a business
Animal lover Coleen Taylor had always wanted to run her own business but it was only after her long-term relationship ended that she finally decided to turn her dreams into reality.
The 51-year-old, who lives in Wigton, Cumbria, is currently remortgaging the house she shared with her partner, and plans to invest £100,000 into setting up a luxury kennel and cattery called Pawsawhile Country Kennels.
"The money I need to borrow would freak most people out, but that doesn’t concern me because I truly believe there’s a market out there for what I’m offering and that I can make a go of this business," she says.
Since the split 18 months ago, Coleen has researched the project, designed the kennel and found a builder who started work over summer 2008. The plan, she says, is to be open for business by Easter 2009.
Coleen is one of a growing number of so-called ‘olderpreneurs’ - defined as people aged at least 50 who have decided to take the plunge into self-employment after spending their lives either working for other people or raising families.
According to Laurie South, chief executive of PRIME, an organisation dedicated to helping over-50s set up in business, Coleen is a good example of people who have become self-employed after experiencing life-changing events.
Being made redundant, being left an inheritance or the breakdown of a marriage can all push people in this direction. In fact, about 15% of the 400,000 new businesses started each year belong to people over the age of 50.
"For some it will be their last chance to make money because they are unlikely to find another job," South says. "Some will always have dreamed of working for themselves, while others simply want a change of scenery."
A desire for a fresh challenge was the inspiration for Jain Castiau and Anne McMeehan to set up Cauldron Consulting, a London-based public relations firm, after years of working for major banks. Six years on Jain, 57, is delighted they made the move.
"It’s much more stimulating and I feel a lot more productive as I spend more time ‘doing’ and a lot less time managing others," she says. "Those endless management meetings are also a thing of the past. I earn considerably less, but this is more than compensated for by the job satisfaction and the absence of company politics."
The good news is that it’s pretty straightforward to start your own enterprise in Britain, says Stephen Alambritis, chief spokesman for the Federation of Small Businesses, which is why an estimated half a million people do so every year.
"It’s very easy to start because we have one of the easiest regulatory regimes," he says. "Even people who have no desire to earn millions can work from home, generate a turnover of £50,000 and enjoy a nice lifestyle."
So where do you begin when considering setting up your own retirement business? Well, the leap into running your own firm might seem daunting, but it will be far less fraught if you take it in bite-size chunks.
The first step is to be clear on your objectives. Do you just want extra cash or are you hoping the new venture will eventually take the place of your current job? Or have you already retired and see this as a way of topping up your retirement income?
You must also factor in your family situation. For example, if you already have financial commitments you need to decide how the bills are going to get paid while you’re trying to get the business off the ground. South adds: "It’s important to know what kind of person you are."
Then you need to decide what type of business you want to run. Do you want to run your own shop? Can you see a gap in the market for a service? Have you come up with an invention that you believe will make you a fortune?
If you’re stuck for retirement business ideas then why not consider turning your favourite pastime into a hobby with profits? Thousands of Brits choose this option every year and, in the best case scenarios, it can be the perfect way to combine business with pleasure.
Budding writers, skilled gardeners, talented painters and enthusiastic cooks have all found they can make money from their particular talents, while having a passion for what you do means you won’t resent the hours spent developing the business.
Keen photographer Garry Stephenson, 55, went down this route after being made redundant from his job inspecting motor homes. His business, SkyHiFotos.co.uk, enables unique pictures to be taken from the top of a 50-foot mast. The innovative idea ticked all the boxes. "It was something I could start almost as a hobby but could be worked as a business," he explains. "It was also something that I could keep doing into retirement."
He advises people to start planning their retirement business while still in regular employment, if possible. "Work it around your existing job, if you can, before deciding to go fully self-employed - it’s easier if you are already in work," he says.
Using existing skills
Another option is to harness the skills picked up in your previous profession. That was the approach taken by 57-year-old Ann Davidson. A year ago she set up My Village News, a local community magazine, after being made redundant from her job in newspaper advertising.
The monthly title, which is funded by local advertisers, is written and produced by Ann and her husband, John, and delivered to more than 5,000 rural homes in Cheshire.
The idea was sparked by her concern that villagers were in danger of becoming isolated from one another due to fewer post offices and bus services, while the fact she had spent years selling advertising space meant she already had the right skills.
"After being made redundant your first instinct might be to do something completely different," she says. "However, consider the experience that you’ve gained in the workplace and think about going with something that’s familiar."
Alternatively, you may like the idea of buying into a franchise. This is where a company chooses to grow by granting a licence to others to sell their product or service. In exchange for this support you will pay a fee and ongoing royalties.
Lynne Lister, managing director of the franchise X-Press Legal Services, believes older entrepreneurs make very suitable candidates. "People of 50-plus have plenty of energy and drive, coupled with the wisdom that comes from real-life experience," she says.
Ray Barnard opted for a franchise after accepting voluntary redundancy at the age of 52 from the chemical company where he had worked since the 1970s. Wanting a fresh start in an unrelated area, he started up the Chester branch of Mail Boxes Etc.
The initial idea was to go into business with a colleague who had also taken voluntary redundancy, but when he pulled out, Ray decided to press on with his plans and invested £40,000 into the enterprise, along with a further £60,000 loan from the bank.
The business, which offers services such as professional packing and mail-forwarding, quickly became a family affair, with Ray’s son, Simon, joining on full-time basis, while his wife, Joan, and daughter, Maxine, also work there in a part-time capacity.
"The benefits of a franchise are that you’ve got a system in place that can give you the opportunity to demonstrate your entrepreneurialism," adds Ray. "Franchising is a safer option - but certainly not easier. It still requires the same amount of hard work."
Doing your homework
After deciding on the corner of the business world in which you intend setting up camp, the next step is to do your homework. Carrying out proper research into your chosen subject is essential to ensure it’s feasible, that there are enough customers, and that you can make a profit. Don’t rely on a quick poll of your friends and family as they will be biased. Speak to potential customers as their input could be worth a fortune. Being honest with yourself at this stage will save you a lot of disappointment, not to mention money, further down the road.
You will then need to get all your ideas down on paper. This will allow you to tackle important questions, including: Where will your business be based? Is it possible to operate out of your living room or will you need to invest in suitable premises? Will you need to take on employees? How much capital do you require to get everything up and running?
This can seem overwhelming, but there are plenty of resources available to which you can turn for help, insists PRIME’s Laurie South. "Everyone feels humbled and lacking in confidence before the whole idea of running your own business comes to fruition but the thing to realise is you’re not alone in that," he says.
As well as PRIME’s own website, it’s also worth taking a look at other sources such the Business Link website, where you will find detailed information on a wide range of subjects.
The advice covers areas such as company structure, tax requirements, insurance and your legal responsibilities to customers and employees. You will also be able to access contact numbers for business link advisers in your area who will listen to your ideas, help develop your business plan and suggest ways of making it grow.
One of the earliest issues to tackle is finance. You’ll need money to invest in the business to get it off the ground, and your options will be using your savings, borrowing from friends and family, getting a loan from the bank or attracting outside investors. There may even be grants available in your area. Those without suitable assets to put up as collateral may be able to get help from the Small Firms Loan Guarantee, a joint venture between the Department for Business, Enterprise and Regulatory Reform, and a number of lenders.
Another thing to consider is tax. Anyone boosting their earnings by running a business - either full or part-time - is also likely to have to pay tax on their earnings. The basic rule is if you’re making a steady income from whatever you’re doing, then you’re going to be liable for tax. Using an accountant is likely to be a sensible move. You will have enough on your plate running the actual business without spending every evening trying to cut through the endless red tape which will come your way.
You’ll also need to take a look at your pension arrangements. Were you part of your previous employer’s pension scheme, for example? The best option is to seek the advice of an independent financial adviser who will point you in the right direction.
Regardless of what has led ‘olderpreneurs’ down the path to self-employment, those who succeed rarely want to return to their old lives. As South puts it: "If I had a million pounds for everyone who came back and said they wished they had done this before, I’d be rich."
Changing mortgages without moving home. Property owners chiefly remortgage to get a better deal but some do so to release equity in their homes or to finance home improvements, the costs of which are added to the new mortgage. Even though you’re not moving house, you still need to engage solicitors, conveyancing and the new lender will require the property to be surveyed and valued.