Starting Anew After Retirement

Effat Sedky | BCBusiness
Now 82, Effat Sedky still puts in a full week’s work at the wholesale croissant business he bought at 65.

Senior citizenship has traditionally meant a chance to slow down and enjoy the rewards of a long career. But motivated seniors are increasingly viewing their golden years as another beginning—a chance to launch a new business

Retirement? Effat Sedky, 82, doesn’t have time. At an age when many of his peers are winding down, Sedky owns and runs Vancouver Croissant Ltd., a thriving wholesaler of the buttery baked goods, with 12 employees in its Burnaby warehouse. “There’s no way I can stop,” he says, with a shrug. “I will run it as long as I can come to the office.”

He’s part of an emerging trend of older entrepreneurs who start businesses after the age of 55. And he’s got plenty of company, though quantifying the trend precisely is a bit tricky. Statistics Canada doesn’t track how many self-employed waited until their 55th birthday before jumping in, and how many have simply aged into the demographic cohort.

Nevertheless, a few stats are revealing. The number of senior entrepreneurs in B.C. soared by 70 per cent over the past decade, estimates Andrew Ramlo, of Urban Futures, a Vancouver consulting firm. A TD Canada Trust survey from October last year showed a whopping 54 per cent of baby boomers polled have started or are considering starting their own firm. And people 50 and older now account for close to 30 per cent of startups in B.C., more than double the amount seen in the 1990s, according to a CIBC In Focus report from last September.

Ramlo says the sharp increase in the propensity among boomers to be self-employed is likely related to several factors. More people are retiring from careers and, with better overall health than previous generations, they can stay active longer. Life spans have also increased, meaning they have more time to fill. And our diversified provincial economy provides many opportunities for small, service-based business—a favourite of late-blooming entrepreneurs.

“It’s not surprising,” says Laura Jones, executive vice-president of the Canadian Federation of Independent Business. Boomers with the prospect of living into their late 80s may find their financial needs—or dreams—straining their existing resources, she explains. To cover the gap, they turn their accumulated skills, knowledge and contacts into their own businesses.

“In some cases it is necessity,” says Joel Young, founder of the Okanagan Valley Entrepreneur Society, a non-profit serving a region in which the median age is 52. “In other cases, it’s, ‘Gee, I want to do something else with my life.’ You can’t garden and golf all day,” adds the man who describes himself as “69 going on 50.”

Sedky doesn’t have time for either leisure activity. He’s too busy with daily operations at his 6,000-square-foot production facility, which ships croissants to customers throughout Western Canada. Looking back, he says he got into the business because he wasn’t ready to retire: “I couldn’t sit and relax. I wanted something to do.”

He also wanted to be careful with his bank account, having learned a pricey lesson in his first go-around as a senior entrepreneur. After emigrating from Egypt, he started a construction firm at the age of 56, only to see it crumble when the real-estate market imploded. That nightmare left him wary heading into his next venture. “I didn’t want to take chances,” he says.

An existing croissant shop caught his eye and met his criteria. Though he knew nothing about the pastry industry, the business was not capital-intensive, it was small (only two employees at the time), profitable and he could do a lot of the work himself. So at age 65 he bought the business and in the ensuing years has driven a six-fold increase in sales.

For many other senior entrepreneurs, money is the dominant—and often sole—motivation. David Gerry, for example, moved from the non-profit sector into the business world at age 62 because he had bills to pay. “I didn’t have benefits. I didn’t have a pension,” says the co-founder of Insightful Marketing Inc., a Victoria-based Internet-marketing agency. His previous career was personally gratifying, he says, but without a pension plan and with a pay scale that covered household bills and not much more, building a sufficient retirement fund wasn’t possible.

Open since January 2012, Gerry’s business is still in its infancy, which means the hours can be long without much financial reward. He is drawing on personal reserves for now, a step that’s necessary to reach his goal of building Insightful and then selling it to finance retirement.

His story is a familiar one to Jerry Luskey, owner of Artisan Handyman in Qualicum Beach. He survived two “pretty rough” years in the central Vancouver Island market when he started, including a four-month stretch in which he had no buyers. Giving up wasn’t an option. Luskey, in his 60s, had opened his doors because he couldn’t find a job in the area. “I sent out numerous resumés and got no returns,” he says.

With no prospect of a job to bail him out, he persevered with the business. Armed with construction experience and some tools, he offered all manner of home-related services to fellow seniors in the area, from landscaping to renovations. It was a burgeoning market: 47.2 per cent of Qualicum Beach residents are now over the age of 65, according to the 2011 census.

Luskey still remembers his first project. “I wasn’t quite ready,” he says, with a laugh. “All I had was a Volkswagen Beetle. I had a rake and a shovel down the middle and the rest of the tools were packed in the back.” Before long he acquired a van. Customers followed. Now in his fourth year, he has many six-day workweeks, billing out at $35 to $40 an hour.

Just down the road, in Parksville, Val Bacon shares a similar experience. She opened Daughter on Call, a seniors’ assistance service, at age 60 after a career in social work that included a stint in Vancouver’s Downtown Eastside. “I wasn’t in a position where I could retire,” she says. Employment opportunities were scarce, so she took a government-funded self-employment training program that paid her EI while she planned and launched her business. She opened in the spring of 2010 with $2,000 borrowed on a line of credit. Getting established was a slow process. Profit was elusive.

Now 64, she averages 25 billable hours a week. That revenue supplements her pension income to cover her living expenses, but it’s not enough to bankroll retirement anytime soon. “If I had the choice, I’d rather be retired. I’d rather be in Arizona than here looking at the snow.” But the business is a satisfying Plan B at the moment, she says. “I love what I do.”

That’s typical of senior entrepreneurs, says financial planner Neil Sharpham, who at age 67 is one himself. They place a high value on choosing businesses they are passionate about and work they find fulfilling. He continues to run Nova Retirement Planning Group in Vancouver after the typical retirement age because it gives him a sense of purpose. “I do it not so much for the money, but for the stimulation. It makes me feel that I’m actually helping people,” he says.

Sharpham has delivered more than 500 seminars on financial and retirement planning, and encourages boomers to explore self-employment. He expects more people to take him up on his suggestion in the coming years, since the average Canadian at age 55 has socked away only $60,000 for retirement. Self-employment won’t significantly bulk up those nest eggs, he cautions, but it can produce additional income and tax benefits that translate into a better lifestyle.

Just don’t give up your day job to do it, adds retirement planner Erika Penner, from her office in Richmond. Quitting a well-paying position at this stage of life could tarnish those golden years for older entrepreneurs. “Ten years isn’t a lot of time to be acquiring a lot of financial assets,” she says. It may make more sense to start a part-time business while you keep working. But even that strategy should be analyzed to determine whether there will actually be any net financial gain once the tax man dings you for his share, she says.

Another factor to weigh is the commitment required to succeed. Would-be senior entrepreneurs have to be prepared for long hours and unending stress, with little initial compensation to soothe the pain. Ramona MacLeod, owner of Big Mama Student Services Ltd. in Vancouver, can attest to the workload. She says that her business, which rents textbooks through its website, mushroomed after its inauguration in August 2010 and can often demand 100 hours of her time a week. Even with five employees, she can find herself schlepping heavy boxes on any given day.

“It requires huge amounts of energy and I don’t recover as fast as I used to,” she says, with a sigh. Thankfully, the 50-something mother of two seems to have bottomless reserves. She credits some of that to her passion: “I have a ton of fun doing this.” The rest of her commitment stems from sheer determination: “I don’t get rattled a lot,” she says, crediting her steadiness to an attribute many older entrepreneurs can identify with: life experience.

MacLeod already started over once before founding Big Mama, she explains. After a failed marriage she went back to school in her 40s, earning a law degree with a dual concentration in business and taxation law. Now with one child still in high school, “I’m not in a position where I can afford to retire.”

Her plans for the business separate her from many other senior entrepreneurs, who tend to start small and stay that way. MacLeod says her goal is to “go big or go home.” While that won’t mean a move from the West Coast, she says it could mean expanding with the intent of becoming the dominant textbook supplier in the country.

Such a grand vision is rare for female business owners regardless of their age, says Joanne Norris, who oversees the Vancity Community Foundation’s Women Entrepreneurs Financing Opportunities and Growth Project. A lot of women are not necessarily born entrepreneurs, she says. “They often fall into it or get into it later in life.” According to statistics gathered for the project, some 27,000 women aged 55 or older were self-employed in B.C. in 2006, with approximately 16,000 more in the 50 to 54 bracket.

Women will often build careers working for others, Norris says, “then they are pushed or pulled into entrepreneurship” by downsizing, unhappiness with their work or family-related issues such as more time available once their kids grow up.

While the Vancity project doesn’t specifically study senior entrepreneurs, Norris says her experience in working with women such as MacLeod suggests they may be naturals when it comes to owning a business later in life. As parents raising families, they tend to develop skills that transfer nicely to the marketplace: understanding the needs of others, organization and the ability to multi-task.

Those aren’t uniquely female strengths, of course. What men and women alike need in order to succeed as senior entrepreneurs, though, is something they should have learned through life, says Joel Young from the Okanagan entrepreneur society: patience.

He advises would-be senior entrepreneurs to research and analyze their idea before leaping into it. “The way you may have understood a market at 25 is not necessarily the market now that you’re 65 or even 70.” It’s not exactly new advice, he concedes, but it is especially relevant to boomers who may not be up to speed with the technological revolution that has transformed the way business is done. In essence, old dogs may have to learn new tricks.

It’s something Effat Sedky has done with great success. When it came to capital investment for his croissant business, he applied the lessons he’d learned from his failed construction business and chose a less aggressive growth plan, built on the principle of taking one small step at a time. And to create a niche, he spent a lot of time researching organic pastry before bringing the first one to market in the city. Since then he’s added a vegan croissant, too.

Though Sedky has to be careful about eating his own product for health reasons—dough and butter are not a recommended diet for anyone, let alone a senior citizen concerned about weight and blood pressure—he says he loves the challenge of running his business. Becoming an entrepreneur late in life may not be for everybody, but for him it is the only way to live. “Besides,” he says, “at this age I’m just happy to be moving.”