Winnipeg Free Press - PRINT EDITION

Small business BOOM

Battle-tested baby boomers launch their own businesses

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Michael Schick was in a truck accident more than three years ago, and like many people who have rubbed elbows with the Grim Reaper and lived to tell the tale, he started thinking afterward about what he had done with his life.

More precisely, he thought about what he hadn't done. Schick had worked for several years as a trucker for Bison Transport and before that as a technician on printing presses. Yet he had never pursued his passion: woodworking.

Even though it had been in the back of his mind for years, and he had actually started collecting tools about a decade ago after his brother was killed in accident while driving a truck, like many of us, he had procrastinated.

"I wanted to get off the road badly," says the 57-year-old owner of Michael's Woodworking and Handyman Service.

Yet he couldn't find the right moment until he nearly suffered the same fate as his sibling.

Soon after his accident, he found himself writing out a business plan.

"It was like a blueprint of what I wanted to do in the future -- what would make me happy -- because I had post-traumatic stress disorder."

With the support of his wife, Patricia, they borrowed against the house to build his home-based workshop. At first he kept his day job, working odd jobs on the side. Then, this past spring, he decided to go into business for himself full time. So far, work has been plentiful, he says.

Schick is one of thousands of boomers in Canada who are making -- or at least thinking about -- the jump from working full time for an employer to becoming their own boss, according to a recent survey by TD Bank.

"Over 50 per cent indicated they have started a small business or they intend on starting a small business in the next few years as they move into pre- and post-retirement," says Dan Demers, vice-president of small business banking at TD.

The results came as a surprise even for the bank, he says.

"The traditional thinking is boomers would save up enough, retire, go to the beach and never work again, but they actually have a keen interest in continuing to contribute and to be active in the business community."

In some cases, boomers are going on their own because they have no choice. They've been downsized, and finding full-time employment in uncertain economic times hasn't been a fruitful search.

But many are choosing to become their own boss voluntarily, he says.

"There are two trends that we found," he says.

"One is consulting and actually using their organizational and business experience to help other businesses, doing consulting in engineering, business, accounting or whatever it might be."

The Schicks are representative of the other trend. They launched a home-based business based on a lifestyle choice.

Patricia Schick, 65, says their path hasn't been without potholes.

"Working for yourself is a whole different ball game," she says. "For me, I worked at University of Manitoba, so I'd get up, go to work and come home, and that was it."

Working at home -- with your spouse -- has involved a "few wrinkles to iron out."

The biggest challenge for the couple has been striking a balance that includes enjoying life after decades of working and building their business.

"Financially, we were pretty good," she says, adding they've even had to hire an employee, who is 60 years old.

While managing the finances hasn't been difficult for them, starting a business later in life can be a risky proposition, Demers says.

"The risk is that you go in too deep and use too much of your personal assets, threatening the financial stability that you've built up over your career."

Yet boomers have a great deal of experience that gives them an advantage over other age groups starting businesses, he says.

"They usually have managerial experience, so they tend to make smart choices and their risk is going to be much lower because of that wisdom."

Not to mention they also often have a number of financial assets to back up their venture.

"Their personal balance sheet is critical, especially for the self-employed, sole-proprietor startups," he says.

"Essentially, the credit worthiness and history play a big factor in the financing decisions."

Still, the size of your bank account isn't the only deciding factor when a small business loan account manager decides to approve a loan. The business plan is also crucial.

No financial institution will take would-be entrepreneurs seriously without proof they've done their homework, says Shannon Coughlin, general manager at the Canada/Manitoba Business Service Centre (CMBSC).

"You need to be able to demonstrate that the business is going to be a success," she says. "The business plan allows people to make mistakes on paper, not out of their wallets."

But if you're just starting, the government-funded business centre should be your first stop.

"We have the largest collection of how-to-start-a-business books in North America," she says.

"And we also have hundreds of sample business plans."

The centre also helps fledgling entrepreneurs find money, providing them with access to Business Start Program loans of as much as $30,000 and connecting them with the Business Development Bank of Canada (BDC) for loans up to $50,000.

"What people should do is call us and we'll help them find the appropriate funding, because that's what we do."

For Schick, his new venture happened organically, so he didn't need to seek a business loan or even expert advice -- a fairly typical pattern for boomers who start a hobby business, Coughlin says.

They can slowly transition from being an employee to self-employment with not much of a shock to the pocketbook.

Still, like the Schicks, preparation long in advance is essential. Schick had been accumulating equipment for a decade to get ready.

But don't wait too long, his wife says.

"Get into it earlier rather than later."

Otherwise, you may find yourself mulling it over while the years slip by -- like her husband did, she says.

"It just kept nagging at him and finally, I said, 'Build the workshop and do it.' "

And he couldn't be happier.

Quick facts

Small business and building wealth: A big challenge for even successful entrepreneurs is an exit strategy. Many have sunk a lot of money into their business over many years, yet when it comes time to retire, they can face difficulties seeing a return on their equity. Still, according to the recent survey commissioned by Investors Group, many small business owners do invest substantially in RRSPs and other investments for retirement with the realization they may not be able to sell the business once they retire. Many, however, do plan to work long into retirement years, says Jack Courtney, vice-president of high-net-worth planning at Investors Group. "A third of them work into their 70s," he says, adding a survey found 14 per cent said they never plan to retire. But those entrepreneurs who have successful incorporated businesses have a real opportunity to carry a substantial amount of wealth into retirement if they can sell the business. "If you're selling a business that qualifies and find a buyer, then you can make use of a $750,000 lifetime capital gain exemption on the sale of shares of the business," Courtney says.

The Canada/Manitoba Business Service Centre -- an entrepreneur's launching pad: Service centre general manager Shannon Coughlin says people who want to start a small business but are worried they lack experience can take advantage of a number of free educational programs offered at CMBSC. The centre's guest advisor program, for example, provides free access to lawyers, accountants, e-business specialists and banking professionals. Free seminars are also offered on a monthly basis on various topics, such as using social media, selling your product or service to government and developing a business plan. For more information, go to .

Republished from the Winnipeg Free Press print edition November 17, 2012 B12

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