Later in life, Arizonans tailor-make own careers
Wednesday, September 05, 2012
Posted by: Rhette Baughman
Corporate downsizing, a tough job market and the desire for independence have pushed a growing number of Arizonans in their 50s and 60s to start their own businesses.
At a time of life when business aspirations could be slowing down, an ever-higher number of professionals age 55 and older have taken the plunge, both in Arizona and nationwide.
They include a former mortgage broker who recently opened an archery club, an ex-flight attendant who became a financial planner, a former retail developer who now teaches tai chi to seniors and a retired Xerox Corp. executive who runs a document-scanning firm that employs developmentally disabled workers.
The trend is due in large part to population growth among those 55 and older, as more Baby Boomers enter that age group, experts on demographics and entrepreneurial activity said.
Wave after wave of layoffs in recent years also likely played a role, they said, along with a widespread perception that companies are less inclined to hire older job candidates.
"For that age group, it’s really been a tough situation,” said economist Tom Rex, associate director of the Center for Competitiveness and Prosperity Research at Arizona State University’s W.P. Carey School of Business. "A lot of people have postponed retirement, and those are the lucky ones that didn’t lose their jobs.”
Several local business owners age 55 and older cited another reason for their decision to become entrepreneurs: a desire to escape the corporate environment and pursue their personal passions or interests.
"If I had known 20 years ago how satisfying it would be, I would have started a business 20 years ago,” said John Longobardo, 64, a former Xerox Corp. employee who co-founded a document-scanning and software company in Scottsdale called Express Digital in 2005.
Starting over at 55+
Kenny Cuchiara, a 57-year-old former mortgage broker, opened Arizona Archery Club with his son in July on Deer Valley Road across the street from Deer Valley Airport.
Cuchiara, an avid archer, said the business was years in the making. He decided in 2009 to reinvent his career and chose a business that was tied closely to his own interests.
So far, it appears to have been a smart decision. Initial business has exceeded its founders’ goals, with 150 members signing up and revenue reaching $79,000 in the club’s first 15 days of operation.
"It’s crushed everything we expected,” Cuchiara said.
A study released earlier this year by the Kansas City, Mo.-based Ewing Marion Kauffman Foundation found that nationwide, the percentage of new-business startups by adults ages 55 to 64 has increased dramatically in recent years, to20.9 percent in 2011 from 14.3 percent in 1996.
By comparison, new-business creation by adults ages 45 to 54 increased to 27.7 percent from 23.9 percent during the same period, the study found.
Startup activity among the youngest age group studied, adults ages 20 to 34, decreased to 29.4 percent in 2011 from 34.8 percent in 1996.
The annually published study, known as the Kauffman Index of Entrepreneurial Activity, is a leading indicator of new-business creation in the U.S.
The study also found that Arizona had the highest per capita creation of new businesses of any U.S. state in 2011, with 0.52 percent of all adults involved in the formation of a new business.
That’s 520 involved in starting a new business in 2011 for every 100,000 Arizona residents.
Boomers and businesses
The boost in startups among those age 55 to 64 probably is not the result of a change in behavior, Rex said. There simply are more adults in that age group today.
In general, entrepreneurial activity tends to increase during periods of economic recession, he said.
"A lot of new-business creation is counter-cyclical,” Rex said. "A lot of it is driven by people being laid off.”
Phoenix resident Sherrye Chapin was laid off in 2009 from a management position at financial-services firm Prudential. She was 58 at the time.
Facing limited job prospects, Chapin took her future into her own hands and founded Sherrye’s Kitchen, a catering business she started with money she had been saving for retirement.
With the help of a chef who lent her access to a commercial kitchen, Chapin began as a full-service caterer but soon found her niche as a maker of desserts, particularly her trademarked Caramel Addiction Gourmet Brownies.
The degree of success she has achieved exceeded her expectations, Chapin said, and she never would have considered becoming a business owner and entrepreneur had she not lost her job.
"This has opened up opportunities for us,” Chapin said. "I get up every morning excited about what I do.”
Sun Lakes resident Kim Kubsch, 55, was a successful developer of shopping centers for 28 years before her business-related travels to Asia led her on the path to her current life as a business owner and tai chi instructor.
Kubsch founded Safe Movements, which teaches tai chi to older adults, in 2011. Tai chi is a Chinese martial art that combines movement, balance, breathing and relaxation techniques.
Kubsch said that after nearly three decades in a fast-paced and demanding career, she was seeking a greater balance between the personal and professional halves of her life.
She now teaches tai chi at age-restricted community clubhouses and fitness centers. Kubsch even makes house calls for some clients who are physically unable to leave their homes.
Tai chi is ideal for older adults and those with physical disabilities, Kubsch said, because it is not physically demanding and can be practiced from a standing or seated position.
"The purpose of tai chi is to relax your mind and body,” she said.
Corporation to startup
Kristen Lopez, chief operating officer of the Arizona Small Business Association, said the group has seen significant growth in the number of entrepreneurs 55 and older since 2008, with many of them coming from large corporations.
"We saw an influx of those sort of career folks starting their own businesses,” Lopez said. "We definitely saw a lot of people within that age group, because they weren’t quite ready to retire.”
After 27 years in sales and marketing for Xerox, John Longobardo had a chance meeting with John Principale, a veteran software engineer at Motorola Inc., that led the two men to start a business together at ages 56 and 55, respectively.
In 2005, Longobardo and Principale founded Express Digital, which began as a software company to help companies transition to paperless document-filing systems.
Eventually, the company morphed into a full-service document-scanning and digitization firm that currently provides work opportunities to more than 70 developmentally disabled Phoenix-area residents.
Longobardo said he and Principale started Express Digital out of a desire to use their skills and experience to build something from the ground up.
As the company has grown, however, the focus has shifted to creating opportunities for the developmentally disabled, he said.
Through partnerships with two non-profit organizations, Phoenix-based Gompers Habilitation Center and Scottsdale Training and Rehabilitation Services, or STARS, Express Digital has found a way to support local residents with disabilities while making its document-scanning services affordable to small and medium-size businesses, Longobardo said.
More than 70 clients of Gompers and STARS work as document-scanning contractors for Express Digital, he said.
"These people are very diligent, focused and serious about what they do,” Longobardo said.
Because the non-profit partners provide trucks and facilities for the scanning operations, he said, the company is able to offer a service that otherwise would be much too expensive to provide.
But, Longobardo said making money is no longer the primary goal, although the company has been successful enough to keep growing its contractor workforce.
"Our work is centered around helping the disabled,” he said. "We have a passion for it. Working with the disabled is one of the best things that has happened to either of us.”
Passion and preparation
Former US Airways flight attendant Kathleen Murray said she took her longtime personal interest in finance and investing as the basis for starting Dynamic Wealth Advisors, a registered investment-advisory firm.
Murray, 65, earned both a master’s degree in personal financial planning and a certified financial-planning designation in preparation for running the company, which focuses on helping women in their 50s and older prepare for retirement.
Murray, who took a voluntary early-retirement deal from the Tempe-based airline in 2004, said her new business combines two of her passions: finance and social interaction.
"You also have to be sincerely interested in working with people,” she said. "I absolutely love it — it’s what I was meant to do.”
As fulfilling as owning a business can be, it’s also extremely difficult, said Lopez of the small-business association.
While there have been no recent studies on failure rates in Arizona, she said, it is generally accepted that 70 percent to 80 percent of new businesses fail within the first five years, often because of problems managing the company’s growth.
Most new companies are funded with credit cards, personal savings or loans from friends and family, Lopez said. Few public or private organizations offer loans or grants to startups.
That can make the financial loss painful when things don’t work out, she said, especially if the company was started with retirement funds. "It’s a very risky scenario,” Lopez said.
Preparation is the key to making a successful transition from employee to business owner, she said.
Fortunately, there are a number of organizations dedicated to helping people start their own businesses by offering mentors, coaches and information, Lopez said.
Those include the Arizona Small Business Association, local chambers of commerce, small-business advisory non-profit the SCORE Association, and the U.S. Small Business Administration.
While older business-creators are likely to know quite a bit about how companies operate, most still need some coaching to understand how to properly launch and maintain their own successful business, Lopez said.
"We would prefer that everyone meet with a coach before starting their own business,” she said.
By J. Craig Anderson on Sep. 01, 2012, under Arizona Republic News
Reporters Ryan Randazzo, Robert Anglen and Russ Wiles contributed to this article.
Reach the reporter at email@example.com.
Source: Tucson Citizen