Why Are Boomers Becoming Entrepreneurs?
Boomers Re-defining or Rejecting Retirement
Financial stability is important at any age, but as one ages, it becomes even more critical to feel confident about any financial obligations that may arise. For most people, there are only two methods of achieving financial security:
Save your money and earn interest by having certain types of accounts like savings/ bonds and certificates of deposits; and
Invest your money over a long period of time in property or investments such as stocks, mutual bonds and of course 401(k)s.
However, it appears that as the Boomer Generation reach retirement age, they are less likely to choose a quiet retirement lifestyle and leave behind the challenges of the workplace. This trend has resulted in the emergence of a third option to the traditional two ways to continued financial stability in retirement that are listed above. This third way is senior entrepreneurship–launching of one’s own business venture.
In lieu of retirement, seniors are launching their own businesses at high rates–which wasn't the case decades ago. With the immensely valuable life and business skills they have acquired through years of experience, a more patient approach to growth and development, and a lower risk tolerance, many retirees are choosing this third option for financial well-being. Given the financial set-backs of the national economy during the period of 2007 – 2011, several people suffered major financial losses both in terms of investments, retirement plans and jobs.
Recovery has generally been rather slow for many and now plays a role in the finances available for a traditional retirement. Free time and financial insecurity have become drivers for negatively affected seniors going into business. On the other hand, there are cases where individuals now have the freedom to pursue a project they are passionate about, and still others avail themselves of the opportunity to continue working in a field in which they have years of experience but an employer has replaced them. And in some overlapping circumstances, seniors already enjoy financial stability but reject retirement, underpinning their confidence in entering the entrepreneurial arena with retirement funds.
In fact, quite recently, a friend who had been in business for over 40 years sold his company and retired. Three months later he was back with a brand new business venture and renewed purpose. Despite his financial stability, he was bored. His drive was not financial gain per se but the need to stay engaged and productive. This is not just an aberration as research is discovering.
According to the Ewing Marion Kauffman Foundation's 2015 Kauffman Index: Startup Activity*, people age 55 to 64 accounted for 25.8 percent of the businesses started in the last year. Also, a 2014 survey by Encore.org**, which helps older Americans find ways to use their skills for the greater good, found that 39 percent of the respondents were interested in starting a business or a nonprofit organization.
3 Areas Boomer Entrepreneurs Need Support
Whether the intention is to develop an additional income stream, satisfy a long held dream, or pursue a life of continued contribution to society as a whole, there are some areas of sound business development that is needed to ensure a chance of any measure of success.
Understanding and keeping abreast of developing trends in marketing and sales;
Accessing resources in the local community, such as Small Business Administration and AARP, that offer services and essential business start-up training to older entrepreneurs; and
Engaging the services and assistance of experts with current skills and experience navigating regulations, legal issues, marketing, and promotion of business ventures to everyone in today's world.
For Boomer entrepreneurs, the reason for staring new business may not be all that different to entrepreneurs of any age. The differences may be most markedly observed by their mind set, as well as their plans for the future and growth of the business. One thing is for sure, though: this trend is likely to continue.