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Margaret Mountford: Cynicism helps over-55s succeed in business

The number of over-55s starting a business could be about to shoot up, and their “healthy dose of cynicism” will help them succeed, according to former The Apprentice star Margaret Mountford.

Due to this year’s pension reforms – allowing withdrawal of certain pension funds in bulk once you reach the minimum age – more than half a million over-55s are considering setting up their own business, according to research by wealth management company AXA Wealth. This means one in 10 of those due to retire in the next 18 months could draw on their pension pots to start a business or go into consultancy, the research found.

Speaking to the small business network, Mountford, who was one of Lord Sugar’s advisers on television show The Apprentice between 2005 and 2009, said experience sets these later-life entrepreneurs apart. “Hopefully you have learned a bit on the way in terms of seeing how other people have done things. It is always better to learn from others’ mistakes than your own,” she says. “Hopefully you will also realise that even though on the face of things [starting a business] looks easy, it isn’t.”

Longer life expectancy and healthier habits are adding to the trend, as people aren’t always ready to settle down once they reach retirement age. “It’s a combination of longevity, health and the fact that you can get some of your pension money,” says Mountford. “You may think the word pensioner suggests that image of the old people crossing the road, and it’s not like that.”

The top reason given for planning to start a new business, among the over-55s surveyed, was the realisation of a lifelong dream. However Mountford says it’s important to be aware of the practicalities of running a business.

“It is a lifestyle change, particularly at that age. Research showed the south-west might have a mini-boom in tea shops and restaurants, but boy you would have to work hard in tea shops and restaurants,” she says.

“I think it’s easy to get carried away by an idea and see it through rose-tinted glasses.”

Adrian Lowcock, head of investing at AXA Wealth, says people starting up in this group are generally first-time entrepreneurs who haven’t had previous access to a lump sum to start a business. “They may not necessarily have big ambitions for their business, they may be looking to do it for the pleasure of it, effectively convert their hobby into a full-time career,” he says.

For older entrepreneurs trying to decide how much of their pension to put into their business, there is no simple answer. It comes down to your attitude to risk, says Lowcock.

“It’s almost impossible to put a percentage on it. They may be more than happy or comfortable to risk losing all that money, and comfortable with the lifestyle they can still afford. On the other hand you have people who can’t afford to risk a penny. The first thing to ask is – where are you on that scale?”

He adds: “Some businesses are very costly and expensive to get up and running and most people will underestimate this. It becomes a very personal thing. What can you afford to risk?”

Older entrepreneurs should look around for advice and support, and consider working with other people, Lowcock advises. “You don’t necessarily need to do this on your own, you can work with other people, get external investors coming in through crowdfunding and peer-to-peer lending. You don’t need to set up on your own and that can spread the risk as well.”

Mountford stresses the importance of getting good quality advice – organisations like the Prince’s Initiative for Mature Enterprise (Prime) are dedicated to helping older entrepreneurs. Just because you have worked in a similar area or sector in the past, don’t assume you know all there is to know. Being the sole proprietor is completely different to being an employee, she says.

Starting a business will be a huge lifestyle change for most people, and you need to make sure your friends and family are behind you.

Mountford says: “A lot of these people will be in a permanent relationship with someone – what does their partner or other half think about this lifestyle choice? They might have been dreaming of cruises, not getting up at 6am to run a business.”


Source: The Guardian

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