A mature businessman shakes hands with a young colleague. (iStock)
Q. I’m over 50 and some of my new entrepreneurial partners are in their 60s and 70s. The breadth and scope of their experience is phenomenal. Is this common? I still think that entrepreneurship belongs to the young people of Silicon Valley. kg
Dear LB,
Your experience validates the predominance of older entrepreneurs. The media tends to portray entrepreneurs, especially tech-savvy ones, as being in their early 20s. This is not the case. In the United States, the highest rate of entrepreneurial activity is among those ages 55 to 64, according to the Kauffman Index of Startup Activity. This has been the case for 15 years, writes Elizabeth Isele, CEO of the Global Institute for Experienced Entrepreneurship.
There is more validation to what you observed. According to a Merrill Lynch study, people who don’t like retirement are three times more likely to be entrepreneurs or small business founders than younger people. Eisele notes that these people have optimized their living and working experience and built everything from simple cottage businesses to multi-million dollar technology companies.
So, what are the reasons why older people start their new business? Some have lost their jobs and cannot find another comparable position, feeling pressured to become entrepreneurs. However, this is a minority, according to about six percent of a sample of 2,700 current and prospective small business owners, according to a survey conducted by Guidant Financial and LendingClub. AARP says the most important reason men become entrepreneurs is to be their own boss; for women, it’s the desire to follow a long-term passion. Please note, these are generalities. Other reasons include dissatisfaction with the corporate world, unwillingness to retire, and the mere vision of a golden, irresistible opportunity. The best solution to becoming self-employed in Southern California is to eliminate or shorten commutes on our favorite 110, 101, and 405 freeways.
Some still believe that older people are a burden on society, including calling our aging population a “silver tsunami.” Tsunamis are devastating; the data counters this notion. Older entrepreneurs contribute more than $120 billion in federal taxes each year to support federal programs, reducing reliance on entitlements. That excludes the billions of dollars they contribute to state and local taxes.
And older entrepreneurs stay in business longer than younger ones. After five years in business, 70 percent of businesses started by older entrepreneurs were still in business, compared to 28 percent of their younger counterparts. Experience is clearly a plus.
We cannot ignore income as a major motivator. Baby boomers were the most likely to lose their investment money during the 2008 recession, and many had to delay retirement. If they lost their job and were unable to find another comparable one, entrepreneurship became a necessary option.
Several years ago, I led a workshop on senior entrepreneurship attended by middle-aged and older people interested in the topic. I asked them about their main concerns. One of them was having enough financial reserves to live on, because their business probably wouldn’t earn enough revenue in the first year, two years or so. The second was the realization that their new business might require a 60-hour week or more, which meant long hours and hard work. The third was worry about their relationship with their spouse or partner, knowing that to succeed as an entrepreneur would require them to be fully occupied and somewhat unavailable. They concluded that their partner’s support would be essential for success.
Resources exist. Isele created the Experience Incubator® designed to translate 50+ years of experience into the skills and mindset needed to grow a business. See experieneurship.com/programs/experience-incubator/. Coaching for baby boomer entrepreneurship can be found with Jeff Williams, creator and coach for Bizstarters.com who offers an online planning program with tele-coaching. Williams started her business on her dining room table. A New York-based model comes from Senior Planet. This nonprofit resource for people ages 60 and older helps seniors learn about technology and online marketing by offering classes, business incubators, and co-working spaces.
LB, thank you for your good question. Your observation is correct. Senior entrepreneurship is increasingly common and constitutes an economic asset for our society… and much more.
