There is no age limit in the business world. Indeed, a group known as “encore entrepreneurs,” people over the age of 50 who start a business, is on the rise. According to a Kauffman Foundation survey cited by Forbes, those aged 55 to 64 invest in new business ventures at a higher rate than other age groups—making up 23% of all new entrepreneurs. With so many middle aged and older adults taking the lead, entrepreneurs and business leaders from every age group are starting to take note.
Why Encore Entrepreneurship Works
The idea of encore entrepreneurs is not an old one. In fact, since the mid-1990s, those businesses started by 55- to 64-year-olds have consistently rolled in at a faster pace than those started by younger generations. However, according to Goal Investor, the 14% increase from 1996 is attributed to the recession, which required middle aged workers to take on a “necessity is the mother of invention” approach. Jobs became scarce and layoffs forced the Baby Boomer generation to become creative in how they earned money, including starting their own businesses.
Lifestyle certainly plays a large role in why Boomers become their own bosses. The Insured Retirement Institute 2015 survey states that 28% of people 55+ plan to extend their retirement plans to 70 or later. This change in what retirement looks like may be because they feel they cannot realistically live on Social Security, have low savings, or just desire to work. However, this does not mean that many of these individuals will stay tethered to their desk till their later years.
On the flip side, 26% of retirees surveyed by the Retirement Confidence Survey have taken an early retirement option in order to pursue their passions or a more leisurely lifestyle. A self-owned business provides a cushion of supplemental income,helps pad saving,s and brings more freedom to pursue passions and hobbies.
A New Kind of Business
Business entrepreneurship comes in many forms, but where encore businesspeople have succeeded the most is in fields they have already have a leg up with. By bridging their experience, network, and wisdom, these entrepreneurs are able to monetize their experiences. What those seasoned businessmen with decades of experience bring in terms of knowledge and skill can look particularly attractive to other startups or firms with larger number of turnovers.
In addition to building on past successes, entrepreneurs are looking to find a new kind of path with their own businesses. Unlike millennials who are pursuing entrepreneurship in order to break out of the traditional work roles, according to Deloitte, encore business starters are more interested in finding enjoyment and success in their later years by following their passions. The New York Times points out that many encore entrepreneurs motivation lies with the idea of making an impact. This may include creating a nonprofit, becoming more community focused, or solving a social issue. Encore.org states that this is because as one nears the later half of their lives, the focus turns away from monetary success to investing in things that matter most — family, community, and relationships.
Making the decision to either start retirement early or postpone it by becoming an encore entrepreneur should not be taken lightly. However, those who do decide to pursue their passion or a desire to help their community can monetize both their experience, drive, and desires. With new avenues opening up for those 55 and up, this is the perfect time to follow dreams and carve out a new path for retirement and beyond.