For Canadian boomers, the road to retirement may include a stop as a small business owner. Whether starting freelance consulting work, buying a franchise or opening a specialty business, a recent TD Canada Trust survey found more than half of boomers (54%) have started or considered starting a small business prior to retirement (15% and 39% respectively).
“There are many benefits to being a small business owner, and this is clearly on the minds of boomers across the country,” says Dan Demers, Vice President, TD Canada Trust. “While thorough planning, access to finances, hard work and passion are a must for all business owners, there are specific considerations boomers should think about before starting a small business at this stage in their life.”
According to the research, the top reasons boomers consider starting their own business before retiring include being their own boss (58%), having the opportunity to make more money (53%) and having a sense of personal achievement or pride (50%). Of those who thought about opening their own business, two-thirds (67%) said it would be a new venture outside of their current field of work. The survey also found that boomers believe the greatest challenges to starting a small business would be securing finances (42%), taking on additional debt (38%), finding new business or clients (37%) and balancing business and personal finances (36%).
To help navigate challenges and find success, Demers offers advice to boomers considering opening their own small business:
- Consider your personal finances: While boomers may be more established financially, it’s no wonder that financial concerns top their list of small business challenges. Not only will most boomers have less time to reach their financial goals, they will also need to balance saving for retirement with investing in their business. That’s why it’s important to have a full understanding of your financial situation and how it fits with your small business strategy. Look at your credit rating, personal debt, mortgage payments and retirement savings, as well as the financial situation of your spouse if you have shared assets or debts.
- Focus on financing for your small business: Whether you are just starting out or looking to grow your business, cash flow – including access to capital and credit – is critical for success. Start by accurately projecting start-up costs and business expenses and learning about the financing solutions available to you – from an operating line of credit or small business mortgage to government grants.
- Make a plan: Whether taking on consulting work to earn additional income during retirement or realizing a lifelong dream of owning your own store, start by setting your goals. Next, develop a business plan. While the plan can be scaled depending on the type of business you want to start, every plan should include a business model, financial plan, long-term vision and short-term goals.
- Know your options: More than one-third of boomers (36%) see work/life balance as being a challenge for small business owners, so look for banking services that help save time and money. Choose accounts that provide flexibility and convenience, while helping to cost-effectively manage monthly transactions.
- Plan to retire: It’s never too early for small business owners to plan for retirement. Whether selling your business, handing the reins to an employee or family member or simply winding down your work, having a succession plan can help ensure the continued success of your business, or help you get the maximum value for your business.
Demers adds that access to financial knowledge and resources can help make the most of your small business.
“Whether you are just starting out, need to overcome a specific challenge or want to create a succession plan, take advantage of the advice and services that small business advisors from your local bank have to offer. TD Canada Trust has advisors at hundreds of bank branches across Canada, many of which are open evenings and weekends, to help small business owners make the most of their time.”
Small business owners can also look to online resources for additional support. For example, TD Canada Trust’s Canadian Business Community on LinkedIn provides a network of small and mid-sized business owners and industry experts. Additional resources, including an online business planner, can also be found online at TD’s Small Business Resource Centre.
TD Bank Group commissioned Environics Research Group to conduct an online omnibus survey of 1,000 Canadians 18 years of age or older, with 426 who are considered part of the baby boomer generation (born 1946 and 1964). Results were collected between September 26 and 28, 2012.