After more than 20 years working in government, including as a Canadian immigration officer with foreign postings, Ellen Yachnin decided to take early retirement in mid-2019 at age 56.
She then spent a year and a half serving on boards, upgrading some skills and spending time with her family, before launching her own immigration consulting firm in February.
Ms. Yachnin built the company based on her experience as a diplomat, including skills and knowledge to best present a client’s case to Canadian immigration
“I like giving back to people, helping people. I thought, ‘What do I have to give? My knowledge of immigration,” Ms. Yachnin says, now 58.
With a 16-year-old child, working independently from her Toronto home gives Ms. Yachnin the flexibility she needs.
She’s one of a growing number of older Canadians taking the entrepreneurship route in the later stage of life. The Business Development Bank of Canada says entrepreneurship has tripled among people over age 55 since 2000.
For a retiree who may have no entrepreneurial experience, launching a business can be a challenge. Here’s some advice from experts on what to consider:
Figure out why you want to start a business
Answering the big questions of why start a business, and what type, is the best place to begin for retirees contemplating entrepreneurship, says Bridget Field, a client service manager at Small Business B.C.
“Is this a full-time endeavour? Is this a side hustle? Are you counting on this being a financial replacement for your (employment) income?” Ms. Field says.
For some people, a lifelong hobby can be converted into a business or they may look at starting an organization that gives back to the community, she says. Some retirees want to extend the skills they used at an employer into a private consultancy practice, like Ms. Yachnin.
“It’s something to keep a finger in the pie – to keep yourself interested and interesting,” Ms. Field says
Keep your financial and time expectations reasonable
A consultation business in a familiar field can be quicker to establish than a new enterprise, but experts say any new business takes time and money.
Audrey Allotey, team-lead business strategist for Business Link in Edmonton, says some retirees may think buying a successful business franchise like KFC or Tim Hortons offers an opportunity. However, she cautions that it takes considerable time to learn the ropes and understand the market, she warns.
“For retirees, our recommendation would be to start something that’s not as capital intensive or something they can start from their own savings. Banks will be cautious about providing a loan to someone without a steady income,” Ms. Allotey says.
Ms. Field warns that it can also take time to build revenues in a new business.
“You probably shouldn’t rely on it as a retirement plan [for income],” she says. “Every business has growing pains and might not be profitable … for the first couple of years.”
Take Ms. Yachnin, who has a government pension and wasn’t expecting her business to be her full income.
“It’s not going to happen overnight … You can’t expect a lot of financial return in the first year or two,” says Ms. Yachnin, who is currently working about 10 to 15 hours a week. As her clientele expands, she’s considering bringing on staff to help her manage the workload.
Mind your money
Retirees have to be alert to issues of melding various sources of income plus the expenses of startup.
“You don’t want be working more for less and you don’t want to impact savings,” says Kristin Huigenbos, co-ordinator at the Hamilton Business Centre, a partnership of the city of Hamilton and the Ontario government.
Ms. Field recommends entrepreneurs use an accountant or other financial professional to help sort out the tax implications of launching a new business, including how to handle the income alongside personal income. A lawyer may also be necessary if the business is incorporated.
“One of the most common things we hear is, ‘I wish I’d engaged an accountant or lawyer earlier on’” Ms. Field says.
Besides bookkeeping, taxes and legal services, professional websites and social media services may be necessary – and there are many public and private services available to help entrepreneurs get started.
“I wouldn’t chintz out on that. You don’t want it to look cheap,” Ms. Yachnin says of getting a business website.
Be patient and flexible
If there’s one thing entrepreneurs can count on, it’s that nothing will ever go exactly as planned when launching and running a business.
For instance, Ms. Yachnin never imagined a pandemic would be a consideration when she started thinking about starting her own business. It slowed the process of getting her license and building her clientele.
“COVID and immigration are not the best combination,” she says, especially given the travelling restrictions.
Still, the pandemic normalized the idea of working from home, which cut her startup costs.
“I’d worked for government all my life and I wanted to have a different work experience,” Ms. Yachnin says, who envisions her business taking off in the next few years. “[It] makes me feel good that I’ve been able to create something on my own.”