Barbara Judge, the chairwoman of the Institute of Directors, told the i newspaper recently that too many people retire too young.
She believed older types, particularly retired entrepreneurs, should still be made use of by society by helping young business people.
“Young people starting their own business can’t afford a finance director. My idea is not that retired people should volunteer, they should be paid, maybe £200 a week,” she said.
It’s an interesting comment in two ways.
One – at last we have an idea with some flesh on the bone rather than the usual airy-fairy brainstorming concepts of “elderly mentors” or “elderly apprentices” that disappear into nowhere.
We have a target audience (the young business) who could be helped and a supplier – a retired entrepreneur selling a service for a couple of hundred pounds every week to spend down the garden centre.
The second reason it is interesting is that it could really work and could be implemented in a very local and organic way rather than being imposed on from government or a large organisation such as the IOD.
Through word of mouth or business and supplier contacts, a young business could easily find a retired entrepreneur in its locality who would be willing to help.
By introducing a paid structure you immediately give some gravitas to the role and the person supplying the advice and ideas.
They feel their input will be appreciated and listened to because the business is paying its own money for the advisor’s time.
And young businesses do need help. Judge is correct in saying that some young company founders try and cover a whole range of bases themselves rather than having separate roles and people to look after finance or marketing or IT.
A retired businessman and woman will be able to impart useful knowledge about how to pace the growth of a company, how to look at a whole range of funding options and what skills and types of people should be recruited.
This is information which can’t be gleaned from books or TV and radio or even going to hear a first-class leader or executive speak at a conference. This is nitty-gritty information and advice talked about and discussed over coffee stained tables with sleeves rolled-up.
The advisor knows he has to impart real and useful knowledge or else the business will say thanks but no thanks. Go back to your roses and Countdown and we’ll look for someone else.
So what kind of help could the retired entrepreneurs give? Finance leaps out. These men and women would probably have up to 40 years of experience behind them – that’s a lot of financial cycles, of high and low interest rates and inflation and global uncertainty and bank volatility.
One area where real advice could be imparted is that of equity. Studies show and the popularity of crowdfunding platforms such as Crowdcube reveal that young businesses today are not afraid to give up equity to help their firms grow.
Look at Crowdcube and some of the pitches there and the giving up of 20 per cent or 30 per cent of the business in exchange for cash. Blame Dragons’ Den if you like and the faux drama of Duncan Bannatyne and Peter Jones saying: “Have the cash but I want 50 per cent of the business.”
The wannabe entrepreneurs go in a huddle and decide and sometimes gleefully say yes.
Don’t be so desperate. Equity in your business is fantastically powerful both at the early stage and later on as your business grows.
Dilute equity too quickly and you lose the ability to use it to incentivise staff and management in the future. If and when you come to sell, your hard work in building up the company may not be fully rewarded.
Debt is difficult to get for a small business. That is true, but cherish your equity – because it will be a large part of your growth story.
Back to the elderly concept. Don’t wait for any more information on this coming from the IoD. It could be six months, a year, it may never come.
This is something you can start today. Use your contacts, find a retired businessman or woman willing to help. Pay them accordingly and listen and take on their advice.
For £200 a week – it’s a snip.
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