David

Have not been in contact for a while

Having just made the move to social enterprises from my previous encore career in international development, I am very aware of the big jump it is from being an employee of somebody to actually being out there as my own boss. I didn’t want to dump a boss – just to be my own.

I am surprised that there are not well known health care insurance options out there to help people to make the jump. From what I understand , keeping health insurance is one of the major blocks to people moving out there on their own. Also, if some of us boomers could and would move out of positions, more people could come into positions.

I think Encore could make a major contribution to the encore population by being a resource on how to find the resources to make moves.

Mike

Michael McIntyre
(202) 246 6048

The Cleveland Plain Dealer picks up on the trend, with “Baby boomers are starting their own businesses in face of economic downturn.”

Among other entrepreneurs, reporter Marcia Pledger profiles Dr. Paul Rosman, 67, an endocrinologist who launched LifeEventDiary after his medical practice dropped by 25 percent. The new service helps people better manage diabetes by tracking their blood glucose levels and matching them with nurse coaches.

David Bank
Civic Ventures

I think you bring up many interesting points about encore entrepreneurs and social purpose enterprises. In my case, I incorporated my organization as a 501( c )3 non-profit, but now I’m not sure that was the right way to go. I knew my business, financial literacy education for youth, fit the common non-profit model, and I had years of experience as an employee and volunteer at a variety of non-profit organizations. So, even though there is a lot of paperwork and related fees involved I didn’t think twice about setting up my business as a non-profit.

Now, a year and a half into the venture, I don’t think I did the right thing. Why? In my case, I believe my products (financial literacy educational materials) should be of a high enough quality and valuable enough as a product that people should be willing to pay for them. If they are not, I don’t want to be distributing them. That has left me in a bind because I have a problem asking people to give my organization money as opposed to selling my products. So, for all intents and purposes Money Masters’ non-profit status is irrelevant.

I know this is my own personal story and everyone’s experience will be different. I just wanted to share this with others who may be thinking about starting a social purpose enterprise and who also may be thinking that it is easier or more beneficial to go the non-profit route. It may be, but I recommend you examine your beliefs about asking for donations versus selling a product.

I wish all you would be social enterprise encore entrepreneurs the best of luck in your ventures.

Lisa Dworkin
President
Money Masters Foundation
www.money-masters.org

David,
This is a very important conversation and I agree that entrepreneurship is going to be a good choice (and perhaps the only choice) for many people who want an encore career and want it on their own terms. One area that gives me pause is when people talk about business’s ability to generate certain revenues or profits without any talk about what kinds of businesses or business models people are using to create those revenues. If we want businesses to both solve a social problem and generate an income, then let’s start talking about what these businesses do, what they are accomplishing, and how they are structured and financed — in addition to how much income they are generating.

I had a great conversation last week with Jeff Williams, a longtime Chicago-area business coach and CEO of Bizstarters.com, who had a wealth of good ideas about how to support encore entrepreneurship.

Jeff left me thinking the entrepreneurship play is not only compelling and powerful; with jobs disappearing, it may be the only card left.

In Chicago and elsewhere, he told me, “The mentality is survival, survival, survival.”

In past recessions, laid-off corporate types might dabble in entrepreneurship, but would quickly return to the corporate fold once the economy recovered.

This time, there’s no going back. Not to union-scale manufacturing jobs with full benefits and certainly not to a six-figure corporate salaries. Those that do find “J-O-B” jobs are taking steep pay cuts and accepting much smaller benefits packages.

There’s risk to striking out on your own, of course. But, compared to what? Layoffs have been ravaging the Chicago area for a decade. There’s been no year with less than 60,000 in the last decade. Last year’s carnage: 200,000. And every lost job drags down many more down the supply chain.

“Very few people who come to me now who are not hurting financially,” Jeff says.

Jeff says he has trained more than 4,000 new entrepreneurs. At 62, he is specifically targeting the 50+ market. What he’s pitching is not a dot-com vision of a venture-backed startup with an IPO payoff. Rather, he says, there are a wealth of opportunities to build low-overhead, high profit businesses that can be grown to $300- or $400 or $500,000 in revenues, “that let you live comfortably for six or seven years and then walk away.”

Such a business, he says, can give you psychic fulfillment while letting you leave your retirement assets untouched, so they can accumulate (or even double, per the seven-year rule, Jeff says). And you can put off claiming Social Security until 67 or even 70, when monthly checks will be substantially higher – for life — and cover health care costs until you’re eligible for Medicare.

Jeff favors low-overhead, high-profit businesses. That is, ventures that take $30,000 to startup, and perhaps $75,000 to scale up after a year or so, and can be built to $300,000 to $400,000 in revenue in a few years.

Social purpose, of course, is what makes a boomer entrepreneur an encore entrepreneur, and Jeff was cautiously encouraging. People do indeed have social motivations, he says, but it’s considered a luxury to be able to do something where the primary motivation is doing some good, he says. “Things are so desperate that even people with a strong entrepreneurial streak are not thinking, ‘I want to be a social entrepreneur.’ They’re thinking, ‘How do I replace the income stream?’”

When his clients describe their perfect future vision, however, they say they’d spend one-third of their time on leisure and family, one-third on earning a living and one-third on helping others and participating in the broader community. Social ventures, for example meeting needs in health care or energy, that combine the second and third goals, are potential winners, he says. But Williams counsels that such ventures often need to pursue a paying business opportunity that can support that mission.

Jeff says there are two obstacles impeding the growth of 50+ entrepreneurship: health coverage and credit.

Worries about health coverage keep people locked in their current jobs and limit their options in pursuing new ventures, he says. Individual insurance premiums are skyrocketing, and insurers continue to push people off their rolls arbitrarily.

One sensible approach: groups of small businesses that pool their purchasing power in group policies. Some states allow this — why not all of them? And he’s looking into the feasibility of “freelancers” creating their own insurance company, like the Freelancers Union has already done in New York.

The other area in need of innovation is financing. The two readiest form of credit for would-be entrepreneurs – home equity and credit cards, have dried up. “Angel” investors have pulled back. Banks want hard collateral, and that’s tough with many homes worth less than what is owed on their mortgage.The Obama administration has made noises about freeing up small business financing, but that has yet to trickle down to many solo entrepreneurs.

Jeff says one needed mechanism is a a marketplace for “purchase order collateralized loans,” that is, making credit available against a solid order from a blue-chip customer. More generally, he’s watching the growth of peer-to-peer loan marketplaces where individuals can make loans to each other’s small businesses, with the interest pegged to an assessment of the perceived upside and downside of a particular business plan. Many ethnic groups have been doing this kind of mutual support for a long time; for a Web-enabled version of something similar, check out http://www.prosper.com/.

What kind of business do you want to start? What’s stopping you?

David Bank
Civic Ventures

Hi David,

I will jump to your second question (What kind of support mechanisms or policies would enable more encorepreneurs?) —to pose another.

Here’s the gist: I have an opportunity to teach a senior self employment course as part of the continuing ed. department at my local community college. I want to customize my usual undergraduate entrepreneurship course and fit it to the unique requirements that seniors face when starting enterprises post first stage retirement. I know that seniors possess a different set of expectations than younger entrepreneurs regarding pensions, savings, risk, work hours, and succession. So my question is: Do you know of anyone who has created and taught a course specifically aimed at this population that is starting businesses at such a record level.

If not, then I would love to part of an effort to do so and combine that instruction with a viable coaching/counseling framework so that these businesses (including for- and nonprofit) are launched and sustained per the desires of the encorepreneur.

The twist to this scenario is that effort to design, teach and coach such a program would serve as my encore career. Cool, eh?

Thanks.

Doug Woodard, Ph.D.
Collective Change
Telephone: 269.275.9816
Email: dougwoodard4@gmail.com

The Wall Street Journal chimes in (again!) on older entrepreneurs, this time focusing on start-ups that serve the boomer marketplace. Among the examples:

• Art Koff, 74, who retired after nearly 40 years in recruitment-advertising communications and started RetiredBrains.com, a job site.
• Linda Brown, 65, who lost her job in a company downsizing and started a business to help people with Medicare claims.
• Jennifer Campbell, 56, who was laid off from a job in public television and now puts full time into Heritage Memoirs, a memoir-writing service that she had started as a part-time venture.

According to reporter Laura Lorber:

For more than a decade, Americans in the 55-to-64 age group have posted the highest rate of entrepreneurial activity, beating out youngsters just finishing college and even 30-somethings embarking on second careers, according to the Ewing Marion Kauffman Foundation, a nonprofit in Kansas City, Mo.

People of the same age group “have a shared experience,” says Mr. Williams, 61, who is seeing a growing number of people in what he calls the “boomer-plus” age group selling to their peers or their peers’ parents. “We did similar things in the 1960s, and we understand each other,” he says.

David Bank
Civic Ventures

Great topic David. I have just written a new workshop called “ Moving from work 1.0 to 2.0 and navigating your journey” I find most Baby Boomers are stuck and do not see the possibilities that a 21st century world offers. Secondly the fear of “dumping the boss” takes courage. I try and cover both these topics in detail so at least this offer Boomers a sense of the possibilities on the horizon. Here in South Africa, there are so many needs in the social sector. I am following your model of trying to encourage education, fellowships and change.

Thank you for all that you do to help me here with ideas and resources.

I appreciate your team.

Arlan Landey

I’m one of those who managed to exit the corporate madhouse. My current business was put together by me with the intent of bringing products to market that benefit the consumer and enhance or leave the environment undisturbed.

I have some building materials products of which I am currently seeking independent reps for the North American market – (I’m the majority shareholder in this company)

I also have chemicals of which 9 SKUs are also tested/merchandised for placement in the retail/commercial markets – chemicals are designed to eliminate hydrogen from metals thereby eliminating oxidization and rust – some of these chemicals can take rusted steel and convert it back to “original state.” Eliminates the need for pickling with raw steel. When used in welding, the elimination of hydrogen improves the weld-strength by up to 60%. (I’m the minority shareholder in this company with responsibilities in North America)

My biggest dilemma has been doing this without dragging investors and/or debt into the company. I am currently debt-free/investor-free but cash poor!

Thus my need for independent reps – those individuals who already have relationships built and currently active with accounts which these products (building materials AND chemicals) are designed for placement.

I am considering returning to the corporate madhouse for cash generation. I’m very determined to avoid investors and debt.

Some useful tips in The Wall Street Journal’s column by Richard Greenwald on the new age of the sole practitioner.

Greenwald’s tips:

1. Think longterm.
2. Join a network.
3. Have your own space.
4. Think like an entrepreneur.

Interesting how changes in the world of work generally are dovetailing with the trend toward encore careers.

David Bank
Civic Ventures

I too am interested in the benefits of working for myself and creating a social enterprise in my encore career.

As a consultant, I am offering recruiting/search services to local companies that place a high value on sustainability and want to hire employees who share their values (green, socially responsible). In addition to working with for-profit companies for a standard fee, I’d like to provide the same services to nonprofit organizations for a reduced fee — that’s one of the social enterprise benefits.

I’m working locally — in Bozeman, Montana, home to Montana State University which is spinning off some high tech firms. We have the lowest salaries in the region, and one of my goals is to become an active player and stakeholder in economic development to create high-paying, high-quality jobs, green jobs—another attribute of social entrepreneurship.

Thanks for asking about the benefits of being a sole proprietor in a social enterprise — I think it might be the next wave.

Wendy Bay Lewis (WendyBayLewis.com — Jobs For The Future in the Last Best Place)

Diana Meinhold writes:

I’ve accomplished your point “1” and have dumped the boss, as you said with the goal of working for myself, and I’m working on point “2” at this point. I tried to put together a travel business for seniors with disabilities at the end of 2009, but reluctantly had to abandon the concept because, in doing the business plan, I could not figure out how to create a profitable model.

The seniors were not prepared to pay what it would cost to customize their vacations for them and the business insurance companies wanted exorbitant liability premiums since virtually all my prospective customers would have physical disabilities. Obviously there is a growing need to help seniors continue to enjoy the world as they age and with infirmities, but making that endeavor profitable is the unsolved mystery.

Now I’m working on an aging-in-place initiative here in Orange County, Californnia. Something like the Beacon Hill Village model (Boston) and/or the Avenidas Village model (Palo Alto). This is a very exciting endeavor that will be something of a private-public partnership most likely as we build on the senior services infrastructure already in place in the local community and then enhance that infrastructure with other services seniors require to stay in their own homes and apartments as they age rather than being forced to move into retirement communities or assisted living communities prematurely. Keeping the seniors in their own homes adds to the local tax base with much-needed tax revenue in the local communities…a win-win scenario is what we are striving for.

I’ll keep you posted are the project progresses.