As prospects for a comfortable retirement fade across the employment spectrum, more over-50s than ever are taking the self-employment route to making money. Jane Simms met some "olderpreneurs" to find out more
You don't have to be young to be an entrepreneur-hundreds of people every year start businesses after the age of 50. Self-employment for this age group rose between 1997 and 2001, bucking the national trend, according to PRIME (Prince's Initiative for Mature Enterprise), a not-for-profit subsidiary of charity Age Concern, dedicated to improving business opportunities for those over 50. While many of these so-called "olderpreneurs" have self-employment thrust upon them-as a result of redundancy for example-others consciously choose to go it alone, often fulfilling a long-held dream.
Dick Pyle had always planned to retire to France, but ended up starting a business there instead. In the Gers region in the south, he spends his mornings spreading manure on his truffière, or truffle orchard. It may not be every 63-year-old's cup of tea, but for Pyle, a chartered accountant and retired executive "it knocks the spots off sitting in board meetings".
The idea behind Truffle Tree, which Pyle set up four years ago, is that people "adopt" a tree for around £150 and, in exchange for an annual £35 fee, they receive the truffle yield-typically around 300g to 400g every year-from their tree. Pyle recently introduced some "super trees" to his orchard which yield 6kg to 9kg of truffles every season and will do so for the next 50 years. So far, 281 trees have been adopted by people in 21 different countries, including celebrities and business people. He has never had to advertise or raise finance and, with 1,280 plots, it all adds up to a pretty good income.
Pyle had worked for multinationals such as Bell & Howell, Pitney Bowes, PricewaterhouseCoopers and Morgan Grenfell, but never felt at ease in corporate environments. "They tend to be about management by committee, whereas I am a despot," he says.
Truffle Tree is a different beast. "It is hard physical work, but very rewarding," says Pyle. "And my daughter is keen to move here to help, so it will become a true family enterprise." His advice to directors marking time in corporate roles or being offered generous redundancy packages is to "bite the bullet while you are young enough to do something different".
Biting that bullet is a big step-and too risky for many. But there is evidence to suggest that businesses started by people later in life are more successful than those set up by their younger counterparts. Professor David Storey, director of the Centre for SMEs at Warwick Business School, found in a study conducted with NatWest back in 1995 that 70 per cent of businesses owned by the over-55s were still in operation after six years, compared with just 19 per cent overall.
And, based on a 2004 study by Storey's departmental colleague Stuart Fraser for the Bank of England, four out of every five owners of SMEs are aged 40 to 65. This should encourage the over-50s, especially as the corporate practice of sacrificing older employees on the altar of cost cutting is likely to continue despite new age discrimination legislation. Once you hit 50, you have only a 10 per cent chance of becoming an employee again, according to the Office for National Statistics. This may explain why 35 per cent of the UK's 3.5 million self-employed are over 50.
"In many ways, being in your 50s is the best time to strike out on your own," says PRIME chief executive Laurie South. "Your kids are probably independent and you're likely to have paid off your mortgage, so you are better able to take a risk now than 15 years ago," he says.
What's more, the reason older entrepreneurs tend to more successful is that they have greater experience, well-developed networks, they are better at calculating risk and managing people, and they research their chosen field better than younger entrepreneurs. But despite their experience, they are less likely to think they have all the answers compared to their younger counterparts, so they tend to start up businesses with others who have complementary skills, to ask for advice and to go on courses. They also have more realistic expectations. South says: "They usually just want to make a living out of their business-anything else is a bonus. By contrast, younger people want to make millions, sell up and retire at 35."
They may start with modest ambitions, but many older entrepreneurs are surprised at how quickly their businesses take off. John Watson, managing director of The Evaluation Partnership, a consultancy that reviews framework contracts for the European Commission in Brussels, set up his business 16 years ago when he was 50, but "didn't really develop it for 10 years". He explains: "I wanted to see my teenage children and always took plenty of holidays, but as they became more independent I wanted to do more and realised I could build the company. At the age of 60 I decided to go for it."
Six years later The Evaluation Partnership is the leading supplier of evaluation services to the EC. It now has a long-term business plan as a result of Watson attending the Business Growth and Development Programme for founder owners run by Cranfield School of Management. "Everything used to be very immediate, but I now have an exit strategy which is likely to involve me selling the business over the next few years, possibly to the employees," says Watson.
An engineer with qualifications from Cambridge, Princeton and Inséad, Watson had a brief flirtation with entrepreneurship when he was 40, buying and failing to turn around an old engineering business. The experience fuelled his desire to run a successful company, but it also taught him valuable lessons.
"Last time I got venture capital backing, but I found the VCs' expectations of high growth and a swift exit a real constraint. I now run a service business, which doesn't need the same capital, so I can grow with the right margins." He also set out on his own before; this time he went into partnership with a colleague. "I would have negotiated harder last time if I'd had someone backing me up," he says.
While there is no single recipe for successful entrepreneurship, observers agree there are several prerequisites, and energy and passion come top of the list. Asking for help is another-and something else that older people are better at than their younger colleagues. "Businesses that ask for help are 100 per cent more successful than those that don't," claims Tom Edge, managing director of Training Projects, a consultancy that helps older people set up small companies.
In this area, women have an advantage over men, and Edge claims they are three times more successful than men at starting and running businesses. But women's pattern of entrepreneurship is very different from men's, says Hilary Farnworth, manager of the Centre for Micro Enterprise (CME) at London Metropolitan University which runs two courses aimed specifically at helping women over 50 set up in business.
"Around 90-95 per cent of women start as sole traders, often part time, and often for lifestyle reasons. Men tend to come out of established companies, band together and raise capital, while women might be re-entering the world of employment when their children have grown up, and will often set up on the kitchen table."
Sally Walton, a graphic designer by training, is a fairly typical over-50 female entrepreneur. Between 1975 and 2005 she had four children and wrote 35 books on craft and design, many in partnership with her illustrator husband. She worked primarily for one US publisher, which went bust as a result of 9/11, so she decided to look around for something else to do.
She realised that she could build on the knowledge of ecology and recycling she had developed while researching a book called Eco Deco and turn it into a business. Carry-A-Bag makes environmentally sound alternatives to plastic bags, using materials such as organic, Fairtrade calico, mattress ticking and recycled curtains. Walton turned to her local enterprise agency, 1066 Enterprise, for advice. As a result, she went on a free six-month Learning and Skills Council enterprise programme.
"It was empowering and it made me realise what I could do," she said. She also got £1,500 towards setting up the business, which helped fund her website, her stationery, two old but reliable sewing machines and her first rolls of fabric.
Things started with a bang in June 2005 as a result of a story in Country Living magazine. Today, she makes the bags herself, with help from her daughter and someone else when she gets a big order. Apart from word-of-mouth, her primary marketing tool is the internet, and she was runner up in the inaugural profIT@50 competition, launched by Intel to showcase people over 50 who have set up online businesses.
Walton's advice to other "late starter" entrepreneurs is to use age to your advantage and select something you want to do. "This isn't about getting money so that I can enjoy my leisure time; it is enjoyable in itself-almost a hobby. Now I've got going I would like it to be successful."
At the other end of the older entrepreneur spectrum is Stirling Murray, chief executive of The Core Business, a personal care and beauty management group. After 27 years in corporate life, latterly as director-general Europe, for beauty house Bourjois, Murray set up his business in May 2004, and floated on AIM in March this year with backing from capital investor Addworth.
"I was very ambitious from the beginning-I wanted to be turning over £10m within five years and I sought financing straight away. I also got people working with me very quickly," says Murray. He admits the transition from corporate life to self employment was huge. "You have to do everything yourself and there is always a lack of time and space to think strategically," he says.
Another hostage to the corporate treadmill was Hugo Rose whose career spanned 30 years, 20 of them in the wine and mail order business. He stepped off last year to set up a web-based parcel minding service at the age of 52. MyParcel provides pick-up points for bulky mail-order parcels so that customers can collect them locally at their own convenience. There are currently five depots in London, and Rose wants to build this up to 25 before going national.
Rose weighed up the risks of remaining in his job or going self-employed. "I could have stayed put, done another 15 years and retired, but I was looking for a challenge," he says. "Also, there was no guarantee that it would be a smooth run through to retirement."
Building a business in a new area-parcel minding-added to the risk. "From my own experience in the wine trade I understood its potential, but there was nothing to measure it against. I wouldn't have chosen such a high-risk strategy at the age of 25," he says.
The risk was mitigated by the fact that the new venture ties in with his previous business so he can draw on his contacts. "If you move into an environment where you have no leads at all, you make things very hard for yourself."
He left his former employer, wine merchant Lay & Wheeler, in 2004 and did consultancy work while he crystallised his business idea and raised finance. "You're pushing off from the side, but you don't want to push off into a complete fog," he says. "I set up enough work to keep me afloat for the first year and, in the meantime, created a roadmap. Clarity about the first few steps is as important as the inspiration itself."
Being in control of their destiny and a feeling of liberation are the two most common benefits late-starter entrepreneurs cite when striking out on their own. "It is much more fruitful and rewarding running your own show," says Ian Roffe, the 58-year-old managing director of engineering firm Secomak, which he and a colleague bought out from the parent company last December.
Of course, the corporate sector's loss is the enterprise sector's gain, and PRIME's South hopes that demystifying the notion of entrepreneurialism will encourage older employees to have a go. "You really only need three things: a product or service you are passionate about, the ability to market and sell it and the ability to sort out your finances," he says. "There is no mystique to being an entrepreneur, no special gene. You just need the will to make it work."
Rose adds: "There is a risk in going solo, but there is a risk in standing still too; the routine of a steady job can be stultifying. I feel more alive than ever, though I sometimes forget that when I wake up in the night worrying."
