BMO: Business Booming for "Boomerpreneurs"
- The psychology behind 'Boomerpreneurs' - many boomers start their own business because they want to work for themselves, not because of financial need
- Over the past decade, the number of self-employed workers has increased by 17 per cent; 40 per cent of workers over 65 are self-employed
- Entrepreneurial trend could lead to a boost for the Canadian economy
- BMO offers financial advice to "Boomerpreneurs" launching new businesses
TORONTO, ONTARIO--(Marketwire - Oct. 2, 2012) - With a third of the Canadian workforce predicted to retire over the next five years, a growing number of retirees are looking to use the opportunity to start a business.
According to Industry Canada, 40 per cent of workers over 65 are self-employed and, over the past decade, the overall number of self employed workers has increased by 17 per cent. The "Boomerpreneur" phenomenon could lead to Canada experiencing a surge of new businesses that, planned and managed prudently, could provide an economic boost in the long-term.
"For an increasing number of Canadian boomers, their retirement picture isn't a definitive shift from work to leisure," said Tina Di Vito, Director of Retirement and Financial Panning Strategies, BMO Financial Group. "Rather, it's more of an extended transition that involves a combination of both."
With Canadians on the cusp of retirement looking to realize their self-employment dreams, the "Boomerpreneur" trend appeals to many for a variety of reasons. According to Ms. Di Vito, these can include:
- Being drawn to the sense of independence that comes with owning one's own business;
- The chance to realize a long awaited dream, but never having had the time or capital to do so; and
- The desire to keep the mind active and the opportunity for social interaction that can come with operating a small business.
Ms. Di Vito also noted that, while the additional income generated by a business can be helpful, many boomers do not chose to start a business for this reason alone.
While there are many benefits to opening a small business in retirement, 'Boomerpreneurs' should understand that entrepreneurship involves an enormous financial commitment that is best managed with the assistance of a financial professional. Lack of sufficient preparation could have a negative effect on the business owner.
BMO's Tina Di Vito offers the following tips to Boomerpreneurs-to-be:
- Do your research: Take advantage of the resources and network you have built over the years and learn all you need to know to set up your company. This includes gaining industry insight, arranging a new phone number, deciding whether or not to incorporate the business and looking into the potential tax implications.
- Consider the pros and cons: Think carefully about why you want to start your own business. Being your own boss can offer some flexibility. However, other sacrifices, such as longer hours and a possible decrease in cash flow - both starting up, and potentially over the life of your retirement - may be necessary to ensure your success.
- Develop a plan: Stress-test your idea and research your marketplace, including what products and services you will offer, the appropriate price point(s), who your potential customers will be and what your sales targets will need to be to cover your costs. Keep your end goal in mind as you build your company and maintain a positive - yet realistic - outlook as you progress.
- Seek outside advice: Speak to an accountant and a small business banker - financial specialists who can provide insight into setting up your company, market competition and personal and business capital needs.
For more information on starting a small business, please visit: http://www.bmo.com/home/small-business.
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Rachael McKay, Toronto
Valerie Doucet, Montreal
Laurie Grant, Vancouver