By KERRY HANNON
Published: September 9, 2013
MICHAEL LOWE was bored with retirement.
He was doing yoga five times a week and reading voraciously after leaving the work force in 2008. He had enjoyed a three-decade legal career, most of it spent as a corporate lawyer for Verizon. The hitch was that his wife, Melissa Kroning, 61, registrar of the Smithsonian American Art Museum, was still working full time. So globe-trotting was out.
â€œI was just kind of hanging around the house,â€ Mr. Lowe, 64, said. â€œI decided I might as well try something else.â€
Luckily, he had a good rapport with his son-in-law, John Uselton, now 40, a fellow enthusiast of home brewing, wine collecting and spirits â€” with whom he found he could start a business. Their mutual passion for craft distilling eventually grew into New Columbia Distillers, the first microdistillery in Washington. In October, it rolled out the first bottling of its small-batch Green Hat distilled gin from an old warehouse holding their 15-foot solid copper still.
The rise of senior entrepreneurs like Mr. Lowe has been well documented. But start-ups like the one begun by Mr. Lowe and Mr. Uselton are a new twist in the trend, and a variant of traditional family businesses: so-called legacy partnerships. The partnerships are started at or near the older partnerâ€™s retirement from a lifelong career, so two generations bring complementary assets to a new business. The assets are typically capital and experience from the older partner and energy, technical expertise or online marketing skills from the younger.
â€œMany seniors are creating legacy businesses alongside a younger member of their family,â€ said Elizabeth Isele, co-founder of Senior Entrepreneurship Works, a nonprofit that helps workers over 50 start businesses. â€œItâ€™s a winning formula for both generations.â€
While there are no statistics to document these new generational pairings, the trend appears to be gathering momentum in the current economy.
â€œTwo unfortunate aspects of the ongoing jobs crisis may be driving the launch of new businesses by senior parents and younger members of their family,â€ said John Dearie, a co-author of â€œWhere the Jobs Are: Entrepreneurship and the Soul of the American Economy.â€
â€œFirst, nearly half of recent college graduates have been unable to find work, and half of those with jobs report that the jobs they found donâ€™t require the degrees they earned,â€ he said.
â€œSecond, while the unemployment rate among older Americans is lower than for younger Americans, government statistics show that once older Americans lose their jobs, they tend to be unemployed for far longer, as finding new work is much more difficult. Given those realities, one can easily see how those two demographics might team up as entrepreneurs.â€
In some demographic groups, too, multigenerational start-ups are leading the way, Ms. Isele said. For example, Hispanic entrepreneurs are creating more legacy businesses than any other demographic, according to Yanira Cruz, head of the National Hispanic Council on Aging.
â€œThe economic downturn hit this population very hard,â€ Ms. Cruz said. The result has been family members working together to create small retail businesses like florist shops, restaurants and other businesses in the food industry, and service businesses like cleaning companies.
â€œThe culture has a lot to do with that approach,â€ she said. â€œWeâ€™re raised to take care of our elders, and a commitment to care for one another has been projected onto starting a business.â€
The No. 1 rule is having a clear idea of what each partner brings to the table. â€œWe use a lot of what we learned in our backgrounds,â€ Mr. Uselton said.
He and Mr. Lowe share operating the still and developing recipes. Having worked as a beer buyer for a liquor store and a waiter at a top-tier Dupont Circle restaurant, Obelisk, before plunging into the distilling business, Mr. Uselton had a broad network of contacts in the restaurant and beverage business in the area. And his gregarious nature paid off at tastings arranged at local businesses, which were pivotal in spurring interest in the pairâ€™s artisanal gin.
Mr. Lowe handles the financial books and the regulatory compliance issues. He was a regulatory lawyer, after all. The partners had to get legislation passed through the District of Columbia City Council to permit them to sell the gin at the distillery and host tastings.
One more thing that balances their duties: â€œI am a skinny little old guy. I canâ€™t do a lot of the physical stuff,â€ Mr. Lowe said. â€œJohn can lift the big hoses, cases and bags of grain. Thereâ€™s a lot of physical labor involved.â€
With both men working 60-hour weeks, this year the distillery is on track to produce 2,000 cases of gin (retail price: $36 a fifth) for sale to 60 liquor stores and 140 bars and restaurants in Washington, and a growing number of outlets in Delaware and Maryland. Mr. Lowe figures that he has invested close to $1 million of his and his wifeâ€™s savings in the business. But, he says, with $300,000 in revenue projected this year, he has already begun to repay it.
Two months ago, Mr. Uselton took his first modest paycheck home to his wife, Elizabeth. She â€œwas very excited, to say the least,â€ Mr. Uselton said.
Which raises a question: Are legacy small businesses another form of helicopter parenting, or nepotism?
Mr. Lowe dismisses that idea, insisting that both men came up with the idea of the distillery. â€œAnd it seemed like it might give John a leg up, but it was up to him to decide voluntarily if he thought it was a good move,â€ he said. â€œIt was a fair amount of risk for him to give up his day job and put all of his energy into this. Itâ€™s nice to think that I will probably do this for 8 or 10 years, but it should be able to continue, and John can carry on.â€
There is no arguing that helping a child get traction in the workplace is something many parents are willing to do, if they have the means.
For Francine Harmon, 53, a resident of Duluth, Ga., and her son Brandon Leatherman, 34, starting a business together was all about the paycheck. Both mother and son were out of work.
In 2010, Ms. Harmon was laid off from her job as a human resources administrator for a trucking company in Tucker, Ga., during a downsizing. She was jobless for a year.
Mr. Leatherman had a background in computer technology and finance, and Ms. Harmon knew about customer service from the 13 years she had worked in Citibankâ€™s processing center in Hagerstown, Md., doing phone work, customer service management and investigative duties.
Their solution: In 2011, the two started Born eCommerce. Their initial investment: under $500.
It is a home-based customer service business that is part of the Arise network of outsourced call center representatives. Ms. Harmon was uncertain about the logistics and technical needs of starting her own firm, so she teamed up with her son to handle the setup.
Today, he handles the day-to-day business needs, including accounting, bookkeeping and technology. Ms. Harmon solves problems on the telephone help lines for customers of the firmâ€™s clients Carnival Cruise Lines, AAA and ADT Security Systems.
Another mutual advantage for senior and junior entrepreneurs can be a moral purpose, Ms. Isele, of Senior Entrepreneurship Works, said. â€œPeople at this age really want to create a business that has some kind of social impact on their community, if not the world. And often the younger workers carry the same sense of idealism on their sleeves.â€
When Nancy Burkhart, 69, graduated in 1966 from U.C.L.A. with a degree in anthropology, she â€œwanted to save the world,â€ she recalled. And today, with the help of her daughter Jessica Arellano, 36, she feels as if she is doing that, in her own way. The two own and operate Earth Safe Finishes, a nontoxic paint and finishes company based in Moorpark, Calif., that they founded in 2007.
The impetus for the business was Ms. Burkhartâ€™s divorce. â€œJessica helped me find my way,â€ she recalled.
Ms. Burkhart was not a neophyte. She had already been an owner of three companies that developed and manufactured paints and varnishes for the craft industry. But she was determined to create paints and varnishes with fewer toxins, a goal shared by Ms. Arellano, who graduated from the college of natural resources at Berkeley. She also had expertise in nontoxic technology.
Ms. Burkhart attributes their success to the support she received from other entrepreneurial women and from local agencies, like the Ventura County Score group, which is composed of retired executives who provide counseling to small businesses, and the Ventura County Small Business Development Corporation.
She financed the start-up with a little bit of money her mother had left her and now figures she has about $150,000 invested in it. Not surprisingly, customers are typically new parents or pregnant women who are redoing a nursery. Women in their 50s who are into refinishing furniture are also big buyers. With such business, the two are able to pay themselves annual salaries of about $50,000 each. â€œThatâ€™s enough to make ends meet,â€ Ms. Burkhart said.
What makes everything tick?
â€œWe know each otherâ€™s strengths and weaknesses and fill in the gaps accordingly,â€ Ms. Arellano said. â€œMy mother knows I do not really like phone conversations; she loves them. She does not like paperwork; I donâ€™t mind it. I think that not all parent-child relationships would work for start-ups unless each person is able to cover what the other lacks.â€
What is most important? â€œMutual respect,â€ Ms. Burkhart said. â€œYou have to step away from that parent-child relationship. It has to be the business relationship.â€