Growing older doesn't necessarily mean slowing down. Retirement, once a longed-for goal for many, has become the jumping-off point for many new entrepreneurs. Although senior entrepreneurs have always been around, there's been a noticeable increase in the number of seniors starting and growing new businesses.
That's no surprise given the shifting demographics. With Baby Boomers aging into their 70s, many are reluctant to trade the excitement of the business world for the quiet of their rocking chairs. According to an article in The New York Times, more than 5 million people age 55 and older run their own business. Longer life expectancy, less retirement security from things like pension plans and other benefits, and a redefinition of old age have opened the floodgates for many seniors to becoming entrepreneurs.
It's Never Too Late: Living Longer Gives More Time to Pursue Dreams
Until recently, people worked on their craft or trade until they couldn't work anymore. The village cobbler mended shoes until his son took over or his hands gave way. The farmer plowed fields until he could no longer walk behind his mule. People didn't live as long, so retiring wasn't an option. You worked hard, raised a family, and died young.
Now things are different. The life expectancy for both men and women has crept steadily higher since the original 1935 retirement age was set at 65. At that time, the average life expectancy for a male was 65 years. Today, that number now stands around 75, with women living well into their 80s.
Dwindling Financial Prospects
According to the Pew Charitable Trusts, just as Baby Boomers began retiring, the financial crisis struck in 2007. Many lost a considerable amount of funds as their retirement plans dropped in value. Instead of enjoying vacations and retirement pursuits, many faced the very real prospect of returning to work.
Just as many Baby Boomers were looking for work, younger people also faced a job crisis. The resulting confluence of financial losses and a tighter job market may have encouraged more seniors to act upon their entrepreneurial dreams.
With Age Comes Experience
Many senior entrepreneurs are parlaying decades of hands-on experience into their entrepreneurial goals, by starting companies that channel their hard won knowledge into useful insights.
- Robert Chambers, a former car salesman, founded More Than Wheels to help educate consumers about purchasing used cars. Angry at what he perceived as outright deceit when it came to selling used cars, Chambers turned his knowledge into profit by helping consumers learn how to shop and pay for reliable used cars.
Harlan Sanders, known as Colonel Sanders to many, owned a small motel and restaurant for many years. It wasn't until he turned 65 that he actively marketed his "secret recipe" chicken after several other failed business ventures. David Duffield founded PeopleSoft/Oracle at age 46, but he didn't pause for retirement after his company became successful. At age 64, he founded Workday, a human resources and financial cloud-based software company.For those entering the entrepreneurial world at a later age, financing options may be different than those facing younger entrepreneurs. Older adults may have accrued many assets throughout their lifetime, enabling them to mortgage second homes or sell tangible property to finance their new business. A good credit rating, achieved through years of careful financial management, can also stand older entrepreneurs in good stead.
Senior entrepreneurs may have assets such as IRAs that can be tapped to finance their dreams. (It's worth noting that many financial planners frown on using retirement savings to start a business. You'll need to weigh your choices carefully.)
Rollover for Business Startup or ROBS financing enables individuals to tap into their IRA, 401(k), or 403(b) funds to finance business ventures. You can use the funds to purchase stock in your own company, thus effectively financing your company using funds you've amassed over the years.
Additional support for entrepreneurs, age 55 and older, comes from the SBA. The SBA teamed up with AARP to found the Encore business owner program, a unique set of tools and mentoring for older business founders. Free classes, as well as business mentoring from local business owners, is available through Encore.
New Paradigms for Older Adults
Throughout all aspects of life, we're seeing older adults embracing new paradigms. Instead of accepting that old age is a time of frailty and reduced circumstances, many older adults are acting on long-held dreams of entrepreneurship. They're embracing their vision, using their talents and experiences, and contributing to the economy by starting companies that add jobs and value to local communities. It's a paradigm shift that all ages can embrace.
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