For months after Rick Lehrer sold his share of his insurance company to a business partner, he kept showing up at the office three, sometimes four days a week wearing a designer suit, along with a great tie and a starched shirt.
Lehrer’s reluctance to leave made for some confusing office dynamics with his designated successor, Art Grutt, who had come on board in 2006 with the understanding that he would take over 15 years later, when Lehrer turned 75.
“There was this uncertainty because Rick would still come into the office and be present, but what [was] his role … as founder and as figurehead without still being the owner?” Grutt said.
Office staff would often go to Lehrer with questions when in fact it was Grutt who was in charge.
More than a year after his failed attempt, the pandemic brought Lehrer’s trips to the Manhattan office to a halt. Like many businesses, Cambridge Life shifted to remote work and Lehrer had to accept his retirement.
“I don’t want to say he was hanging on, that sounds negative,” Grutt said. “But the pandemic forced him to transition.”
Baby boomers, a group now between the ages of 57 and 76, make up a large percentage of entrepreneurs. While there are no precise numbers, 30 percent of business owners are between the ages of 55 and 64 and another 20 percent are over 65, according to the Census Bureau’s Annual Business Survey — that’s more than 2 million businesses in total.
Like Lehrer, many of these entrepreneurs have chosen to make exits in the past year, their decision to do so perhaps accelerated by pandemic-related reasons: dissatisfaction with remote work, fears of contracting the coronavirus and a greater appreciation for just how fragile and precious life is.
Overall, 50.3 percent of U.S. adults 55 and older said they were out of the labor force due to retirement in the third quarter of last year, according to a Pew Research Center analysis of the most recent official labor force data. In the third quarter of 2019, before the onset of the pandemic, 48.1 percent of those adults were retired.
“For the first time in well over 25 years, we see a marked decline in labor force participation of older Americans and a marked rise in the share of them that are retired,” said Richard Fry, a labor economist with the Pew Research Center.
Lehrer was so tied to his job — one that over the years sometimes kept him away from family because of long hours — that he needed outside counsel to help him grapple with retirement. He reached out to the U.S. Small Business Administration-supported nonprofit SCORE for advice. Through SCORE, Lehrer was assigned to a mentor named Norman Sherman, himself a retired baby boomer entrepreneur.
“He couldn’t pull the trigger,” Sherman said of Lehrer. It’s a struggle many of Sherman’s boomer mentees face.
“The concept of giving up their business and giving up their identity is a very difficult thing to do,” Sherman said.
Lehrer agreed. “I just was not prepared to cut it off,” he said. “It felt very uncomfortable.”
The two worked together to develop a plan, and it seems to be working. Lehrer spent a fourth of the year in Florida in 2020 and in 2021. He has picked up pickleball. When Sherman and Lehrer last met online for a mentor-mentee meeting in December 2021, Lehrer said he had finally come to terms with his retirement.
“We celebrated,” Sherman said. “Then I said, 'The first thing you need to do is give up your business email address, email account, because I need you to cut off all vestiges.’”
That final cutoff was not the hardest part, Lehrer said. That’s in part because, against Sherman’s advice, Lehrer has kept his Cambridge Life email address, which he now uses to do pro bono insurance consulting.
The hardest part was giving up the 45-minute drive he made each day from Westchester, N.Y., to his office near Madison Square Garden, Lehrer said.
“What’s difficult is giving up leaving the home and going to work,” he said. “That whole process of thinking about work on the way to work, of planning mentally your day.”
The new generation of leaders stepping in is changing business practices to suit their own work styles and ethic, incorporating more technology and delegating tasks rather than shouldering all the workload the way some baby boomers, known for the long hours they put in at the office, once did.
Grutt has expanded the company and spread the workload. When he joined Cambridge Life in 2006, the company brought in about $500,000 in revenue per year and had a staff of four. Today the company brings in about $4 million in revenue and has a staff of 16. Grutt also brought on a third partner to help with growth.
“The reality for me was that it was not going to be a business where a solo entrepreneur could scale and succeed,” Grutt said. He’s also upgraded the company’s technology and IT system.
Once a week, Rick Lehrer and Art Grutt speak on the phone. For the most part, Grutt does not ask Lehrer for advice.
“I kind of feel left out,” Lehrer says. “When I was 41 and was running my own business, I really didn’t want help from other people. I understand it intellectually.”
But Grutt says that through his calls with Lehrer, he gets something more than advice. It’s a reminder of an ethos.
“It’s the passion that Rick had for the business. It’s an amazing energy and passion,” Grutt said. “It’s something hard to replicate and yet it’s critical to replicate as the next owner takes the reins.”
In Lehrer’s case, his two children were not interested in taking over his business, but boomers passing their family businesses on to descendants face struggles similar to that of Grutt and Lehrer.
Sarah Grossman joined her father’s business, BayState Business Brokers in suburban Boston,13 years ago with the knowledge that one day he would retire and she would take over. Her only sibling, a brother, was not interested in the business.
Five years ago, she and her father, Marc Gudema, hired a family business consultant to help develop a succession plan. The consultant helped Gudema see how much value Grossman was adding and convinced Gudema that she should be made co-owner. Still, when it came to actually retiring, Gudema, 73, did not set a date. This caused some tension between father and daughter.
“We struggled for several years,” Grossman said. “I kind of knew the path I wanted, but he was not sure when his exit was going to be.”
When the pandemic hit, Grossman said, Gudema stopped coming to the office because his age put him at high risk for the virus. Months later, Gudema realized that he wanted to retire and spend more time traveling and visiting family.
With less than two months' notice, Gudema announced in November that he would be retiring at the end of 2021. Grossman, an heir-in-waiting for years, found herself abruptly at the helm of BayState.
“At first I was nervous. We had six weeks to figure this out,” Grossman said. “But he had set me up to be successful and we had been working together for a long time.”
Even now, father and daughter don’t see eye-to-eye on the reasons behind Gudema’s retirement.
“Was it covid? I don’t know, maybe,” Gudema said. “Certainly the timing looks coincidental.”
Gudema says that retirement was imminent, pandemic or not. He wanted to travel in his recreational vehicle with his wife and take long trips, and spend more time with his son and grandchildren in Florida. Regardless of where he is, he makes himself available to Grossman when she needs him.
“I know he’s always a phone call away,” Grossman said.
And Gudema still takes on clients now and then, and works as a part-time employee for his daughter.
