There’s a lot of chatter these days about how eagerly Gen Y is embracing entrepreneurship. But you don’t hear nearly as much about the other demographic that’s also pursuing business ownership, driven more by purpose than passion.
There’s been a surge of people aged 50-plus starting businesses, and it’s happening for a number of reasons. But today’s driving factor, according to the Staying Ahead of the Curve 2007 survey from AARP, appears to be “financial need.”
Americans over 55 were particularly hard hit by this past recession. Not only did their jobless rate hit record levels, but their average length of joblessness, according to the U.S. Bureau of Labor Statistics, was over 35 weeks, compared to 30 weeks for workers ages 25 to 34. (These stats, provided earlier this year, were the latest supplied by the bureau.)
According to a report titled “What’s the Matter With the U.S. Job Market?” — part of the UCLA Anderson Forecast, an economic outlook released last December — about 5.5 million lost jobs are not coming back. So instead of seeking jobs that don’t exist, older Americans are starting businesses. In fact, the Kauffman Foundation reports there’s an entrepreneurial boom among 55- to 64-year-olds, who are now nearly twice as likely to start successful businesses as 20- to 34-year-olds.
Assessing the risk
But before you jump into reinventing yourself as an entrepreneur, remember that starting and running a business both entail risk. And the older you are, the lower your tolerance for risk is likely to be. Obviously, success in business is not guaranteed, and younger entrepreneurs have more time to regain any money lost from investing in a venture gone bad.
Late last summer, Newsweek reported that Vivek Wadhwa, a self-described “academic, researcher, writer and entrepreneur,” conducted a study of over 500 successful technology businesses and found that older startup entrepreneurs were actually more successful than younger ones — despite common perceptions. Wadhwa credits their expertise, customer experience and relationships, and established network of supporters for their success. Still, you’ll want to mitigate as much of the risk as possible. You can do this in several ways:
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- Partner up. Starting a business with someone else broadens your reach, lessens your risk, and can make the startup journey a little less scary to navigate. There really is strength in numbers.
- Buy a business. Purchasing an existing company is often less risky than starting from scratch. But do your homework (and hire a good attorney and accountant) to make sure you’re not buying a lemon.
- Become a consultant. Put your years of knowledge to work by advising others. Consultancies often have lower startup costs, and you can work your network for referrals.
- Buy a franchise. Like buying an existing business, owning a franchise can offer less risk, since the franchisor has created a successful business model. Franchising is not risk-free, so do your homework. One place to start your research: the AllBusiness AllStar Franchise rankings.
Two final caveats:
1) Don’t think you know it all. While the business you start should tap into your skills and expertise, there’s often a vast difference between corporate experience and entrepreneurial behavior. In fact, you might have to break yourself of some habits that worked wonderfully when you were an employee. Entrepreneurs have to be more flexible, adaptable and decisive.
2) Make sure you are current on the “new ways” of business. As the owner, you will have to be responsible for a lot of tasks that, in your previous work life, were handled by others (accounting, technology, marketing, etc.).
But don’t let that discourage you. Help is everywhere. And it’s never too late to learn something new. As the old saying goes, “Knowledge in youth is wisdom in age.”
Rieva Lesonsky started her own company at age 50-plus. (We won’t discuss how many pluses.) She is CEO of GrowBiz Media, a content and consulting company that helps entrepreneurs start and grow their businesses. Follow her at twitter.com/rieva, or sign up for her free TrendCast reports at www.smallbizdaily.com to get the scoop on trends that can grow your business.