The silver entrepreneur

Retirement no longer has the appeal it once had, says Faith Glasgow

When Andrew Thatcher retired from his post as managing director of the British Museum Company (the museum's retail trading arm) last year, aged 59, he was looking forward to his new life - as an internet entrepreneur.

Thatcher sees massive potential in the steadily growing influence of his own generation, as the demographic baby boomer bulge approaches and enters retirement age over the next 20 years. Baby boomers, he points out, are becoming not only more numerous, but also less 'old for their age' - they have longer, healthier lives ahead of them than previous generations, and they are looking for interesting new outlets for their energies. To that end, he has set up www.mychumsclub.com (MCC) - a subscription-based social networking website designed for professionals approaching 'with excitement but some trepidation' the transition from a busy working environment into relatively low-key retirement.

MCC taps into the undoubted consumer power of so-called Generation M; but Thatcher is himself one of a growing number of mature entrepreneurs making their mark as generators of business in the Western world. Recent research from Yellow Pages shows that entrepreneurs aged 50+ now account for one in six start-up businesses in the UK each year, and their enterprises contribute more than £2.4bn to the UK economy.

Not only are mature (or silver) entrepreneurs increasingly putting their management skills, specialist expertise, marketing contacts and, in many cases, money to good business use, but they are doing it more successfully than their younger counterparts. NatWest Bank research suggests that their businesses are around twice as likely to survive the first three years - a fact that makes them an attractive proposition as far as professional advisers are concerned. 'Business organisations and financiers have a major opportunity to help a new generation of mature entrepreneurs realise their aspirations,' announces the website of Prime, an organisation dedicated to helping the over-50s set up in business (www.primeinitiative.org.uk).

However, not all silver entrepreneurs launch businesses because they are consumed by a wonderful idea or desperate to fill a yawning gap in the market. Some take early retirement, but cannot face the thought of actually stopping work. Others turn to self-employment because they have to, having been made redundant - according to Prime, there is only a one in 10 chance of getting a new job if you lose your previous one after the age of 50. They need to earn money, but in many cases first have to work out what they actually want to do.

'Older people tend to come to us either tremendously clued up on running a business, or, if for example they have spent the past 40 years as a cog in a big business machine, really pretty clueless,' says Ian Stobie of Prime.

Prime helps older people to work out where their real interests lie, and puts would- be entrepreneurs in touch with local business support organisations. But, as Stobie observes, most government-funded support is targeted geographically, focusing on relatively impoverished regions such as the north-east.

'It means there are basically two sorts of support - public and private,' he says. 'There are enterprise agencies in the areas where they operate, and there's the Government's small business organisation, Business Link (www.businesslink.gov.uk) - though it tends to be more interested in high-growth propositions, which is not necessarily what people have in mind at this stage in their lives.' If those routes are not available, he says, entrepreneurs are likely to turn to professionals for help in setting up and running their business.

Mark Gold, a partner at the London- based accountancy firm Silver Levene (www.silverlevene.com), which has many entrepreneurial clients in the worlds of film and media, believes that older clients distinguish themselves most clearly from younger ones by their attitude. 'We get a lot of clients coming to us at 50+ with these sort of plans, and we hold their hands as much as they want us to, but on the whole they are pretty savvy,' he says. 'And they tend to be wise. They ask the right questions, and they are much more focused.'

Sally Walton - a 55-year-old former book writer whose livelihood, heavily dependent on the US market, was hard hit by the economic impact of the 9/11 terror attacks - is a case in point. When work dried up, she decided to start making and selling stylish re-useable shopping bags. Because she was in the right postcode, her local enterprise agency sent her on a six-month course for 'new entrepreneurs'.

'The thing about being older is you have no time for idiots,' she says. 'On the course, I wanted to learn about business and accounting, which are things I've been scared of all my life, but that wasn't always easy because not everyone was equally focused.' Nonetheless, the course gave her confidence to set up as an internet-based business, www.carry-a-bag.com, rather than simply applying for a grant.

Of course, many of the practical aspects of setting up and running a business apply to any entrepreneur, whether they are aged 25 or 55. One way or another, they need to make a business plan, consider matters of finance, tax and how to structure the business, and deal with the mechanics of bookkeeping. So where do the differences lie in the kind of professional services required by older and younger entrepreneurs?

When it comes to the practicalities, experience tells, according to Ian Kelland, a director of the south-west based accountancy practice Lentells (www.lentells.co.uk). 'Younger entrepreneurs usually require a great deal of advice and assistance in regard to business planning, the creation of in-house financial IT systems, cash-flow management, and raising finance to fund expansion and accelerate growth,' he says. 'The silver entrepreneurs on our books are older, wiser and need a different type of support.'

For example, they don't necessarily want to work all hours; they would like to be able to take a few holidays, and they cannot necessarily count all the time on perfect health. For that reason, partnership may be a particularly attractive way to structure the business, Stobie explains. 'But there are legal issues involved in setting up a partnership; basically, the whole thing is easier to manage if clients discuss it with their adviser at an early stage.'

Raising finance is another area in which older business people may have particular views. On one hand they may have accrued personal wealth, or have friends prepared to invest in the business as shareholders, as Thatcher did. 'I found with our investors - all 45 years and over - that they have a relaxed attitude to risk,' he says. 'When you're younger, every investment decision is a serious business.'

But on the other hand, silver entrepreneurs may be reluctant to take on more large debts after clearing their mortgages and family commitments. Moreover, successful businesses, being eyed for takeover by venture capitalists or other companies may also be relatively resistant to the idea of surrendering equity because the owner doesn't want to work for anyone else. 'They don't want financial worry and they don't want to lose their independence, so some actively choose to remain small and manageable for those reasons,' says Stobie.

'Most of them are less aggressively ambitious than their younger counterparts, so they do not seek sharp growth curves - they are more interested in building reserves than in massive growth,' adds Kelland.

Another difference is that silver entrepreneurs are more likely to be focused on their exit or succession strategies right from the outset. Sally Walton, for example, is 'looking all the time' to find a protégé with whom she enjoys working, and to whom she can hand over the reins in due course. 'But I would consider being bought by a larger company,' she adds cheerfully.

Exit strategies are a particular source of concern, where timely advice can make a great difference, according to Stobie. 'We ran a poll on the Prime website and found many sole traders were very gloomy about their prospects for selling the business,' he says. 'But some sole trader businesses, or parts of them at least, may be made saleable with good advice and careful structuring. People don't realise that a customer book and a good reputation are valuable assets that other businesses will pay for. It's a much-neglected area.'

In the end, of course, a successful relationship depends on understanding and mutual trust: advisers need to see their mature entrepreneur clients' perspective and provide appropriate advice, while clients need to be able to ask questions and get insightful answers without feeling they will be patronised by relatively inexperienced advisers. As Kelland puts it: 'Silver entrepreneurs, with their years of experience, expect and appreciate easy access to senior advisers. They also appreciate advisers who genuinely take an interest in their activities.'

Faith Glasgow is a freelance journalist, writing mainly on property and finance. She has contributed to a wide range of publications, including most of the UK broadsheets, Vogue, Country Life and Investors Chronicle.