America is getting older and more entrepreneurial.
By 2030, nearly 20% of all Americans will be 65 or older, according to the U.S. Census Bureau. That’s up from 13% in 2010 and just under 17% by 2020. This so-called “Silver Tsunami” is predicted to change many aspects of American working life, according to the Fall 2014 “Public Policy and Aging Report” from the National Academy on Aging, a policy arm of the Gerontological Society of America.
Entrepreneurs: Older, working longer, harder and better
The report predicts that Americans will be working longer and retiring later.
And many of them will choose self-employment as a way to keep working, with record numbers of senior entrepreneurs starting small businesses. A Kauffman Foundation study found that in the past decade Baby Boomers between 55 and 64 launched new business start-ups at the highest rate of any age group. And the average age of small business owners is rising as well, with over half ages 50 and over in 2012, up from 46% in 2007, according to the U.S. Small Business Administration.
The reasons are varied, but because Americans are living on average longer and healthier lives than previous generations, many are able to extend their working lives. And by continuing to work they can also stretch their retirement savings and according to some research are likelier to remain physically and mentally healthy longer.
Elizabeth Isele, founder and president of Senior Entrepreneurship Works, a forum for education, training and advocacy supporting senior entrepreneurship, said seniors are starting businesses of “every imaginable kind” at record rates. “They bring tremendous experience —human resource and general life experience—to the table,” Isele said. “One of the biggest challenges is identifying themselves as entrepreneurs. Many other seniors are intimidated by the word entrepreneur. We try to help people decode their entrepreneurial experience by identifying experiences that help them discover they have been acting entrepreneurially all of their lives. We try to ground them in those insights.”
Isele said entrepreneurial skills can be developed through many life experiences. She said a single mother of four who needs to transport her children to multiple events simultaneously develops entrepreneurial skills. She explained that seniors who are considering starting a business are incredibly vital human beings with energy and life skills.
‘We work with them on how to assess and evaluate their ideas, how to pay for launching it,” she said, noting that the program features a strong pre-assessment component. “We want them to be realistic about the financial risks and time commitments and to do this before they put a dime on the table.”
Isele herself is a
senior entrepreneur, a retired trade book publisher at Harper & Row in New
York City who first started teaching seniors technology in Maine. Those early
courses grew from teaching 12 seniors in Portland, Me., to more than 28,000
across the U.S. She was the director of
a philanthropy roundtable in Washington, D.C., and worked with a wide spectrum
of people to become more economically self-reliant.
Survival rates grow with age
In 2012, finding no programs to help seniors start their own businesses, Isele created an umbrella structure, Senior Entrepreneurship Works to educate seniors about starting businesses.
“Whenever we have workshops, we make sure to include some infrastructure to support their efforts, such as banks that offer discounts on loans to seniors, who are some of most responsible borrowers there are.”
Isele said a Kauffman Foundation report found that the life and business experience seniors bring improves the chances of their businesses’ success, noting that the survival rate of new businesses increases with the owner’s age. She said a MetLife Foundation survey found that 34 million Baby Boomers want to start their own businesses and, as an age group, own businesses at higher rates than any other.
She said some senior entrepreneurs start businesses because they lost their jobs or were forced into retirement earlier than they planned. Others recognized after retiring that they lacked the financial resources to enjoy a comfortable retirement. Still others planned for years to start businesses once they left their earlier careers.
She pointed to research finding that senior entrepreneurs are
more successful, with 70% of their startups lasting an average of three years,
while only 28% of younger generations last that long.
‘A person with experience’
Ann Arno Fishman doesn’t like being called a senior. “Call me a person with experience,” said Fishman is the president of Generational Targeted Marketing, a consulting firm she launched after the age of 50.
“A lot of Baby Boomers have worked a lifetime at jobs they may not have been in love with,” she said. “Now they have a chance to experience something they always wanted to do, often in hobbies they love. Now is their time to go into their second or third career, to be their own boss and do the thing they love, to do what they would have done with their lives if they had the chance. Now is chance to define what it is that makes them happy: the passion of their lives. Now is the time to for it.”
Fishman said many Baby Boomers regard their older years as best times of their lives.
“The challenge is how to make it the happiest time, most satisfying time of their lives,” she said. Fishman went back to school when her son was in third grade as the only older person in class. She wrote a paper about it that drew the interest of a Tulane University conference on aging, which published it.
“I found that there seemed to be no role for the last third of our lives: it was fill in the blank. But I learned that the last third can be the best.”
She left her government service job and a hospital called her about reaching the seniors market. “I realized that there is a market for people like me to translate for the various generations: the boomers, silents and the GI generation. We lump them all together as seniors, but they’re quite different. And if companies don’t understand their different lifestyles, they won’t know how to market and reach them.”
Ken Rone, a retired vice president of manufacturing now servings
as a mentor with the Senior Corps of Retired Executives (SCORE), said senior
entrepreneurs are all pursuing a dream, an idea or a vision.
“SCORE’s job to try to mold that vision and guide them through the realities of the business world,” Rone said. “Senior entrepreneurs have a more seasoned, reasoned and more realistic approach to that vision. They have perhaps been playing with concepts and trying out hypothetical ideas for some time. By the time they get to us at SCORE they might have better organization of what they want to pursue, even up to a business plan.”
He said today a wide array of resources are available to assist seniors interested in creating new businesses, from private foundations and forums to membership organizations and state and federal agencies. He pointed out that the Small Business Administration and the AARP teamed up in 2012 with efforts to reach out to 100,000 encore entrepreneurs.
In 2012, Senior Entrepreneurship Works Founder Isele addressed the first U.S. Senate Hearing on Senior Entrepreneurship, urging senators to avoid the ‘doom and gloom’ that some have painted the coming ‘Silver Tsunami,’ labeling it as an impending crisis.
“We, as a society, need to recognize seniors are one of our greatest natural resources,” she testified. “They are not a ‘silver tsunami’; they are a silver lining, yielding golden dividends.”
Resources for Aspiring Senior Entrepreneurs
- The U.S. Small Business Administration: includes links to SBA District offices, SCORE chapters and other resources. https://www.sba.gov/tools/local-assistance/districtoffices
- SBA resources for people over 50: https://www.sba.gov/content/50-entrepreneurs
- SBA Learning Center: Encore Entrepreneurs: An Introduction to Starting Your Own Business https://www.sba.gov/tools/sba-learning-center/training/encore-entrepreneurs-introduction-starting-your-own-business
- AARP tips on starting a new business: www.aarp.org/startabusiness
- Kaufman Foundation FastTrack for 50 plus: http://fasttrac.org/entrepreneurs/fasttrac-courses-for-boomers.aspx
- Aging 2.0: organization that promotes innovation to improve the lives of seniors. http://www.aging2.com/about/
- Alfred P. Sloan Foundation’s Center on Aging and Work at Boston College: research and information about multi-generational workforce. http://www.bc.edu/research/agingandwork/
- SeniorEntrepreneurshipWorks: Entrepreneurship and aging education and training information. http://seniorentrepreneurshipworks.org/about.php