When the coalition government announced its plan to scrap the fixed retirement age next year, employment relations minister Edward Davey referred to older workers bringing a wealth of talent and expertise ‘as employees and entrepreneurs’.
In late 2006, the number of 55 to 64 year olds in the UK workforce outnumbered 16 to 24 year olds for the first time. That same year, a paper by the Open University’s Centre for Innovation, Knowledge and Development reported that survival rates for businesses started by people aged between 50 and 55 were more than double those of businesses formed by 20 to 25 year olds.
Ron Sinclair is one of those wiser heads. In 2001, the Health and Safety Executive announced its intention to close Baseefa, the certification body for explosion-protected equipment, which was run by Sinclair.
Encouraged by several major customers and a number of staff members, Sinclair re-formed Baseefa as a private sector entity in 2002 at the age of 57. Working capital came from the redundancy payments received by Sinclair and the other technical staff, combined with an ‘advance’ of £25,000 from one of Baseefa’s larger customers.
‘Commercially, the timing was great because the level of work was high due to imminent regulatory changes,’ says Sinclair. ‘However, I would rather it had happened ten years earlier when I would have had more time to devote to developing the business.’
This sentiment is partly explained by the fact that in the past 18 months the company has taken on a staff member in Singapore and another in India, both of whom undertake technical work with customers as well as fulfilling business development roles in the region.
Sinclair, who says annual turnover is remaining stable at between £2 million and £3 million, suggests that anyone who finds themselves in a similar position should grab hold of someone with commercial insight to help them understand what’s needed to start and run a business.
Bright spark – Anton Ziolkowski of MTEM
Redundancy doesn’t have to be the sole reason to embrace entrepreneurship. Edinburgh University professor Anton Ziolkowski was in his late fifties when, together with university colleague Dr Bruce Hobbs and their PhD student David Wright, he developed a new technology that radically reduced the cost of hydrocarbon exploration.
The technology emerged from earlier research conducted as part of a European Commission-funded project.
In November 2004 their company, MTEM, was launched with funding from three investors – HitecVision, Energy Ventures and Scottish Equity Partners – who each put up £2.5 million. The business generated revenues of £1.5 million from oil companies in the first quarter of 2007 and in June of that year was sold to Petroleum Geo-Services (PGS) for $275 million (£176.2 million).
Ziolkowski worked as chief scientist for PGS until March 2010, when he returned to the university. His advice to someone of a similar age on the verge of setting up their own business is to carefully consider the extra strain it can create. ‘Think hard about the [financial] and personal risks,’ he says. ‘We were not given any time off to set up the business, so Bruce Hobbs and I were still doing our university work while we were attempting to set up MTEM.’
Pearls of wisdom
Geoff Andrews was still a young buck of 43 when he led a buy-in management buy-out of a small subsidiary of Pilkington Group in 1993. But when the business was sold eight years later the cash he received enabled him to set up as a consultant and business angel who has now invested in seven early-stage technology companies.
Now aged 60, he happily admits that the timing of the initial deal was perfect and that if he had tried to become a business angel a decade earlier he would not have known where to start. ‘Confidence is vital and that comes with experience,’ he says. ‘Young people might appear confident, but much of it is misplaced.’
The experience of building Pilkington Communications Systems from a £15 million turnover company to one with revenues of £60 million when it was sold taught Andrews the importance of cash flow and the value of making decisions quickly.
Feminine touch – Simeone Salik at Blindsinabox
It’s not just men who are setting up businesses in their greyer years. Simeone Salik is 68 and she has big plans for her affordable temporary blinds company, Blindsinabox.
The idea came after Salik and her husband had built a house for their retirement. ‘When we had furnished it we needed to cover the windows. It was then that I discovered how impossible it was to buy temporary blinds in the UK and decided to fill that need, based on an idea I had seen in the US many years ago.’
Salik used her marketing nous, gained from an earlier career in PR, which culminated in an appearance on Dragons’ Den, where she won backing from Duncan Bannatyne and James Caan. She says that experience gives people who set up a business later in life an enormous advantage, and she passionately believes that others who are getting on in their years should follow her lead. ‘All the media is interested in is keeping older people in work for other people, rather than for themselves.
‘Older entrepreneurs should be encouraged, as often they have less to lose in that they own their own homes and understand finance.’