Photo by Mark Hooper
|
Are You Ready to Start Your Own Business?
By Brent Bowers, May & June 2007
Out of ambition or necessity, more than a million boomers every year start working for themselves. Find out whether you have a head for business
|
All her life, Barbara Thornton put up with a nagging problem: her shoes. Why, she wondered, could she never find size 11½ shoes? She knew many women in the same predicament who either put up with tight fits or did their shopping in the men’s department.
In 1995—at age 48, fresh out of Harvard Business School, after a long career in public policy—she saw a business opportunity in her fellow sufferers’ frustrations. Two years later, she launched DesignerShoes.com, which sells more than 50 brands of footwear in hard-to-find sizes up to 15WW. “A great book inspired me,” Barbara says. “I read Composing a Life by Mary Catherine Bateson,” which profiled five highly successful women, “and I thought to myself, ‘It’s not too late.’”
As ingenious and adventurous as Barbara is, her midlife leap to business owner is actually a move that more and more people her age are making. In the United States, people 55 through 64 years old are more likely than anyone else to start a company, according to a study by the Ewing Marion Kauffman Foundation in Kansas City, Missouri, a center for research and education in entrepreneurship. The same study showed that in a single month in 2005 nearly 110,000 folks in that age range hung out a shingle, stepping away from established careers, starting a sideline, or “unretiring.” That’s more than 1 million graying entrepreneurs born—or reborn—each year.
Why venture into the competitive hotbed of small business when others are verging on retirement? “I think it’s the deferred life plan,” says Tim Faley, managing director of the Samuel Zell & Robert H. Lurie Institute for Entrepreneurial Studies at the University of Michigan’s Ross School of Business. “They always wanted to be in control of their lives, run their own show. Well, it’s now or never.”
Plus, older entrepreneurs have a huge advantage their younger competitors can only envy: wisdom forged by experience. “An entrepreneur is an integrator of knowledge,” says Judith Cone, a Kauffman Foundation vice president. “If you just have technical expertise, that can be your downfall.”
In other words, having skills is one thing; being able to use them successfully to launch a business is another. Fully one third of all start-ups fail within two years, the Small Business Administration reports. Fewer than half are still going after four years. Yet the personal ingredients necessary for success aren’t a secret, or at least that’s the conclusion I’ve drawn after interviewing some 500 business owners over the past 15 years. Highly effective entrepreneurs are shrewd judges of strengths and weaknesses, most especially their own, and they share an important set of traits. Do you think you might have what it takes to follow in Barbara Thornton’s oversize footsteps? Read about the eight traits that successful entrepreneurs share here.
[TRAIT 1] An Eye for Possibilities
Yes, “thinking outside the box” is the biggest business cliché of our time, yet there’s no denying that spotting opportunities others miss is a signal trait of entrepreneurs of any age. Without that spark—from “Hey, this town needs a café” to “A drug discount card could help pharmacies and the uninsured”—other qualities that define innovators come to nothing.
The eureka moment may not be immediate. It wasn’t until an industry leader told Barbara Thornton only “old ladies with bunions” need oversize shoes that she knew she had a winner. “I left that meeting as happy as a lark,” she says, convinced by her research that there was plenty of need and that the industry was organized in such a way that it was missing the niche.
[TRAIT 2] A Take-Charge Attitude
The second most common trait among entrepreneurs is their compulsion to run their own show. They have the initiative and had it even as employees.
The impulse to be the boss has more to do with freedom than power. And there is no stopping those who get the bug. Just listen to Ronald Harland Sr., who spent more than three decades in corporate America, including 26 years at the Xerox Corporation, where he rose from repairing copiers to leading a sales force before launching an office-equipment-and-services company called Evolv Solutions, LLC, in Overland Park, Kansas, in 2002 at age 54.
He and his wife had almost paid off their house, Ronald says, and she pointed out to him that they could use their retirement savings to “sit back in our evening chairs and relax.”
“But she knew I had a burning desire to start a successful business and grow it,” he says. “I had to see how big the opportunity could be.” He estimates the company, which now has 13 employees, brought in $12.5 million last year.
[TRAIT 3] Comfort With Chaos
As much as they relish their independence, entrepreneurs anticipate and even enjoy the curve balls that life throws. They fully expect to scramble to survive. They thrive on chaos—and see advantage in every messy situation.
Consider Cary Clark. This 20-year veteran of Hewlett Packard’s Kansas City, Missouri, office took early retirement at age 50 rather than accept a transfer to another city. That was in 1999, and he seized the moment to launch a Y2K consulting firm with a partner, who later bought him out. Cary then purchased a UPS franchise and suddenly had to manage everything from tracking inventory to emptying the trash. Figuring out quick solutions to emergencies became a way of life.
For example, on a stifling summer day after the air conditioning conked out in the strip mall where one of his two stores was located, the other merchants closed their doors and went home. Cary, however, had an inspiration. He pulled out the Christmas decorations and holiday music and put up a big sign: CHRISTMAS IN JULY. Shoppers poured in, and Cary and his employees greeted them with robust “Ho ho hos.” “Customers talked about that for months,” he says. “It sure beat losing $4,000 in business that day.”
[TRAIT 4] The Tenacity of a Pit Bull
Without tenacity—a term I use to encompass persistence and passion—most businesses would never come to be. There are just too many unpleasant jolts in starting a company to keep on going unless you are the human equivalent of a pit bull.
Margaret Sarrasin knew nothing about business when she started selling her flatbreads to a handful of stores in the Toronto area nine years ago. After an eight-hour stint at her receptionist job, Margaret, who was 56, would get home at 5 o’clock, prepare the dough, go to bed, get up at 2:30 in the morning, and bake and package for three hours before heading to work.
Two years later, exhausted and making next to nothing on a paltry $14,000 in sales, she knew it was time to change her ways or quit, and she wasn’t about to quit. “I wasn’t going to give up,” she says. “I was driven.” She enlisted a business partner, and together they bought a commercial oven and started ramping up sales. Fourteen months later she quit her receptionist job. Revenue at her company, M.J.’s Fine Foods, reached $7.1 million in 2005, on sales at almost 4,000 stores across North America.
[TRAIT 5] Creative Instincts
There’s no evidence—yet—of an entrepreneurial gene, but most business owners I have interviewed showed entrepreneurial flair as children, and many had business in their bloodlines.
Tom Faley (the brother of the University of Michigan’s Tim Faley) is a marketing executive at Sargento Foods Inc. in Plymouth, Wisconsin. As a kid he made potholders and hawked them around the neighborhood, shrugging off all the doors that were slammed in his face. He held down two or three jobs at a time in college. “Sometimes I’d be carrying half a dozen paychecks because I never had time to deposit them,” he says.
Nowadays Tom, 57, keeps adding sidelines. He had one business buying fixer-upper homes to rent or flip when one day he ripped out some inside trim and went to a store to replace it. “I was blown away by the cost,” he says. So he made his own trim for one third the price, and voilà!—an enterprise was born. He has since added a third business, managing property for others.
[TRAIT 6] Enormous Self-confidence
Entrepreneurs are always telling me their fledgling companies will become $100 million-plus behemoths one day and maybe join the list of Fortune 500 companies. Many have more modest goals, sure, but all have an unswerving belief that they are offering the world something special. Retired schoolteacher Jan Oudemool and his wife, Sharon, make decorative mobiles in a Cape Cod basement and sell them at crafts fairs for $100 to $300—his “prefame prices,” he jokes.
“I’m the reverse of a businessman,” says Jan. “I do this for the satisfaction.” Don’t let the artistic stance fool you, though. Jan is a veteran of juried crafts shows as a furniture maker and wood carver. He says he sank $800 into his mobiles last year and took in $3,500, an enviable return for any business.
[TRAIT 7] A Practical Bent
Yes, entrepreneurs are dreamers. But they can also be as logical as Mr. Spock. While real-estate agents talk “location, location, location,” the start-up mantra is “research, research, research.”
Before Barbara Thornton launched DesignerShoes.com, she quit her job as a management consultant and sold shoes in a mall for six dollars an hour.
“I can tell you, people in the industry don’t care two cents that I went to Harvard,” she says, “but they are very impressed I worked in a store, putting shoes on customers’ feet, at age 49.”
The experts say entrepreneurs are a rational breed, better described as risk managers than risk takers. “They don’t roll the dice,” says William J. Dennis, a researcher at the National Federation of Independent Business in Washington, D.C. “They don’t pursue wild schemes. They take calculated risks.”
[TRAIT 8] Super Resiliency
Learning from failure is a lesson every entrepreneur eventually learns. “I could fill hours talking about mistakes I’ve made,” says Tom Faley. One that took him to the cleaners was his decision to buy adjacent houses, one a big Victorian, in Sheboygan, Wisconsin.
He dreamed of buying up the whole block, then one setback after another shredded his fantasy. The city ordered him to raze a dilapidated garage, and the tenant insisted he rebuild it. Two boilers broke and had to be replaced. A tenant stopped paying rent. Another got drunk and trashed his place. In no time Tom had burned through $80,000, exhausting his savings and credit lines.
Figuring he would be selling at a loss, Tom put the two houses on the market. But he got lucky. An ad agency bought the Victorian for office space and the other property to build a parking lot, and Tom says he came out a whole lot smarter. “It never occurred to me to market the Victorian as office space. It never occurred to me that a house might be worth more knocked down,” he says. “In retrospect, that failure was something I just had to go through.”
Where to Get Guidance
The Kauffman Foundation in Kansas City, Missouri, has a website with information and advice by and for entrepreneurs. The foundation’s FastTrac business-development program is offered across the country for aspiring and established entrepreneurs.
SCORE is a national network based in Washington, D.C., with more than 10,500 volunteer counselors who give free advice to entrepreneurs.
The Small Business Administration, a federal agency, provides a wide variety of services and funding to entrepreneurs. It also operates Small Business Development Centers in every state.
Angel-investor groups take stakes in start-ups that more traditional financiers might shun. For a list of groups see the Angel Capital Education Foundation’s website.
Colleges and universities offer courses in entrepreneurship. More than 2,000 schools have such programs, up from just a handful when boomers first entered the workforce.
Websites and magazines such as www.vFinance.com, Inc., and Entrepreneur.
Local organizations such as the Chicagoland Entrepreneurial Center and the Center for Women & Enterprise in Boston can be found through your chamber of commerce.
Former New York Times business editor Brent Bowers is the author of 8 Patterns of Highly Effective Entrepreneurs (Currency).
For black-and-white reprints of this article call 866-888-3723.
|
