There’s something special about the later years in life, including the freedom to do different things like travel, explore, and even start a business.
Those individuals who endeavor to create their own business at this stage in life are often referred to as “encore entrepreneurs”. Individuals who start business after 50 accounted for nearly one-quarter of new businesses started last year. People in this age range actually start businesses at a higher rate than those in their 20s. If you consider full-time independent workers, baby boomers and seniors combined are actually the largest segment at 37 percent according to the MBO independent workforce study.
While it might seem counter intuitive, there are quite a few advantages of being an encore entrepreneur that younger founders don’t enjoy and if you’ve been thinking about starting a business, but think you’re too old, think again! Here are just a few of the advantages you’ll have as an encore entrepreneur.
Professional experience is a huge advantage for encore entrepreneurs, and a valuable asset for avoiding common pitfalls that younger founders encounter. In fact, one study found that more technology founders come from the over 50 age range than under 30. And it’s not surprising with the “Age Wave” taking place. As Baby Boomers age, right now approximately two-thirds of people that have ever lived over the age of 65 are alive today. This experience pays off in multiple areas such as financial planning, human resources, and sales. Not to mention consulting, which is a great way that many encore entrepreneurs are monetizing their experience and expertise. Encore entrepreneurs bring wisdom, experience, a tendency to look at the big picture and take the long view, all skills that help encore ventures be successful.
2. Concerns about Financial Success
While this is not true for all encore entrepreneurs, in general encore entrepreneurs are often in a more stable financial position than younger entrepreneurs. This stability may alleviate the fear of failure and other concerns. An encore entrepreneurs’ endeavor may be more of a strategic risk with only a portion of their capital, while younger founders may face an “all in” dilemma that places a lot of stress on them in terms of their future. One UK study by Ron Botham and Andrew Graves found that entrepreneurs over the age of 50 were “less likely to worry about risks, experience or family life than younger founders.” However, if the venture is not a success, a younger person has time to recover and try again while an older person may not.
3. Financial Security
Again, while not true for all, some encore entrepreneurs may have access to multiple alternative income sources, including social security, retirement savings, pension, and investment income. Starting a business can be less stressful if you have other sources of income to fall back on in case something goes wrong. As Fast Company suggests, new technologies and social changes are leading to a job market which consists more of short term assignments and entrepreneurship. This move to solopreneurship is perfect for Encore Entrepreneurs who want to try their hand at something new, which creates opportunities for encores to monetize the expertise they have gained over their lifetime. Many retirees no longer have pensions and know that social security will not support them to live as they would wish for up to 30 years of retirement. That means that an encore entrepreneurship venture is a serious undertaking for many seniors who, because of the great recession, are no longer in a financial position to support themselves in retirement. Encore entrepreneurship also gives people the opportunity to pursue something they have always wanted to do or create a venture that allows them to leave a legacy.
4. Tendency to Have Previous Entrepreneurial Ventures
Aside from professional experience in general, many encore entrepreneurs have previous new venture experience that comes in handy. A 2012 Kauffman Foundation and LegalZoom study actually found that after surveying 1,400 business owners, 66% of those over 60 had previously started a company and 10% of these individuals has started five companies or more. This experience likely yields better success rates for those starting businesses later in life.
Hopefully by now you’ve realized that not only is it never too late to start your own business, but that you’ll actually have several key advantages of being an encore entrepreneur. If exploring encore entrepreneurship is on your agenda, the PCC Small Business Development Center has a great program we call Age is Opportunity. Come talk with us about it!