Retire to the Job You Love Four people who opened their dream businesses tell us what they did right (and wrong) along the way.
By Michele Marchetti

(FORTUNE Magazine) – It usually Happens when you're on vacation. Secluded in Hawaii for two weeks, you suddenly believe you're meant to spend your life working in a surf shop, not selling securities.

Before long you're scouring the real estate section of the Maui News and constructing spreadsheets that compare your corporate life with your dream career. By the time you're on the plane home, a half-month's worth of missed work splayed on the tray table in front of you, the surf-shop dream has been supplanted by reality.

But for some the dream stays rooted in the subconscious, gaining strength in the years approaching retirement. Meet four people who actually acted on those thoughts, leaving their corporate lives behind (or drastically dialing them back) for exciting second acts involving a dream small business. All in their 50s or early 60s, these folks are working too many hours to consider themselves retired. But they're also having too much fun to call what they're doing a "job." An ad executive turned goat farmer, a husband-and-wife team who abandoned law for innkeeping, a corporate real estate pro who now makes his own wine--what did it take for them to pull this off? For starters, money and guts. Here's what they did right--and wrong.

Deborah Walton, 54, always wanted a place overlooking the California coast. It would be warmer than New York (where she lived as a teenager) and less stressful than an advertising agency (where she toiled for more than 30 years).

In 2000 she closed the ad agency she owned with her husband, Tim, now 57, sold the Santa Rosa, Calif., home they'd owned for 15 years, and left on a two-month tour of France and Italy. There she sought out a woman who raised cashmere goats in the Chianti region whom she'd read about in a magazine. Walton's plan: She'd buy a place with an art studio for her husband and enough land for her to raise goats, sheep, and produce. In 2001 she found Canvas Ranch, her 28-acre Sonoma County farm, in a classified ad in her local paper. She and Tim bought it for $500,000 (almost exactly what they got from selling their home) and spent another $100,000 restoring the property.

Walton knew that the ranch, to which she devotes most of her waking hours, wouldn't be a gold mine. So she wisely kept two ad clients that generate about $50,000 annually--most of her current income. (Her husband's art business also makes some money.) Her financial goals were modest: "Hopefully the ranch could support itself so we wouldn't have to put more money into it," she says.

Today the farm does break even. But getting there was a hard road: Walton was forced to be extremely creative about how to make money. Her strategy is based on multiple income streams. For example, she sells her goats' cashmere wholesale; sells kids at $250 a pop to buyers who find them through her website,; leases sheep at $1 a head per day to farmers who use them for weeding vineyards and orchards; sells lambs for $500 to people who want pets; markets lamb's wool (this year she's making organic baby blankets); and sells vegetables directly to consumers.

Along the way Walton made several errors. For one thing, she underestimated the time and effort it takes to run a farm; initially she tried to go it alone, and she lost 20 pounds in the first year from the manual labor. (She now has a full-time employee and the occasional volunteer.) She never considered the prospect that some of her animals would die: She has lost six so far. And she recently spent $900 for 500 lavender plants before she had the ground tilled or an irrigation system in place. The plants are now wilting in her backyard.

But she did a lot of things right too. For example, Walton scored two federal grants worth nearly $95,000 to investigate two different farming methods. How did she know where to look? "I called someone in Sacramento and said, 'Hi, I'm this new female farmer. There must be some kind of a program for me.' " And she has no regrets. "When I wake up and see the baby goats, I just couldn't be any happier. I couldn't ask for a better life."

Cathy and Larry Sklar, 57 and 61, came to their second career in a more roundabout way. Seven years ago they checked into a North Carolina bed-and-breakfast to investigate the town of Asheville. Burned out on New York, the lawyers were considering moving there to practice their profession in a "quieter, less aggressive way." After a second trip, they decided that running their own B&B might be a better way to go. In 1998, Larry retired with full benefits as trademark counsel for Pitney Bowes, and Cathy left a private practice. For $1.3 million they began a new life as innkeepers. "For two people who think through and plan everything we do, we did this by the seat of our pants," said Larry. "We knew if it didn't work, we could go back to being lawyers."

Their custom suits and silk blouses never came out of the basement. They've doubled the profits of the former owners and were recently awarded a four-diamond rating from AAA, making their Albemarle Inn the only B&B in town with that distinction.

Key to their success, the couple says, was their decision to buy a large place (Albemarle has a dozen guest rooms). Initially they had planned to take whatever money they earned from the sale of their home and buy an inn outright, without a mortgage. "That would have been a tremendous mistake," Larry says. A real estate broker warned them that a small inn wouldn't generate enough revenue to fund a staff, and the couple would be forced to handle the housekeeping, cooking, and day-to-day operations themselves. Taking out the maximum mortgage would leave them money to invest in the quality of the inn. The final deal: a $400,000 down payment with a $900,000 mortgage. Using the remaining $250,000 they earned from the sale of their former home, they did such things as pull out the rugs, restore the hardwood floors, fill in a swimming pool, and turn the surrounding land into an English-style garden.

One big challenge was the lack of privacy. At first the couple ate dinner in the kitchen, which was closed off to guests with a PRIVACY sign. After three years of enduring guests who would knock for a quick request or burst through the door needing directions, Cathy visited a realtor with an unlikely request: "I'd like an apartment devoid of charm--a one-bedroom box without moldings or a fireplace." They still sleep at the inn, but they escape to the apartment to cook dinner or simply read a book.

The Sklars never had any doubts about their ability to run a B&B. But while their law background may have come in handy when they managed the staff and balanced the books, it didn't prepare them for a different kind of commitment. Cathy recalls how the former owner warned her of daily shopping excursions. "I remembered thinking, 'That poor woman--she's not organized.'" But sure enough, Cathy found herself in the store every day. "I shop at Sam's [Club] with a flatbed," she says.

Like Deborah Walton, Don Corson has learned that the best-laid plans can go awry. In 1992, after 11 years of making cabernet in his garage, he opened Camaraderie Cellars, a Port Angeles, Wash., winery that would provide income and enjoyment during retirement. So much for planning. More than a decade later, thanks to his bear-market-mauled 401(k) and slower-than-expected profits in his business, the 55-year-old is still working two jobs: his gig as a vice president of planning and development at a land-and-timber company and his true passion at Camaraderie. He plans to retire from his corporate job in about two years to concentrate on the winery full-time.

Before he sold his first case, Corson sought plenty of advice about barrel choices and yeast selections. Yet he neglected to research the business aspects of running a winery. Initially, when the winery produced just 500 cases, he personally made deliveries to his accounts. When production doubled to 1,000, he scrambled for distribution. What's more, he says, "I knew how to ask the technical questions of the distributors but didn't really know how to talk business aspects. I was so flattered someone would want to represent our wine in some far-off state." In one case, Corson was left with a $14,000 loss after a distributor filed for bankruptcy.

Cash flow proved to be another challenge. Corson buys his grapes rather than growing them himself. But with distributors paying 30 to 60 days after a sale, he resorted to begging the growers to be patient and appeasing them with a string of small checks. He now has a line of credit to tide him over.

With 2003 revenues of $200,000 and operating expenses of about $150,000, profits are modest. But Corson expects them to rise as the business becomes more sophisticated. A cash infusion from a business partner enabled Corson to transcend an initial investment of $200,000 (a combination of loans) and pour $40,000 into new winery equipment. Today Wine Enthusiast consistently rates Camaraderie's wines in the 90s.

A book could be written--and many have--about the dos and don'ts of starting a first business later in life. (For a half-dozen key tips, see the sidebars.) For Corson's part, he believes the success of such a business is the byproduct of two essential ingredients: a great marketing plan and a childlike desire to bet it all on a dream. "If it's not a passion and it's just a real interesting idea," he warns, "count to ten and wait for the feeling to pass."