Baby Boomers Start Businesses for Opportunities and for Necessity
Baby boomers staying true to form are continuing to establish new trends. Unlike the previous generations, baby boomers are not looking to ride off into the sunset after retiring from a job. Baby boomers more active, healthy and seeking more from life than just visiting grandkids, gardening and travel are seeking challenges and rewarding second careers. According to the Bureau of Labor Statistics, the self-employment rate among workers ages 65 years and older was at the extremely high rate of 18.1 percent; which was significantly different from the rates of those aged between 16 to 19 years at 1.6 percent and 20 to 24 years at 2.1 percent. The primary reason for this is that younger workers have not accumulated the capi¬tal and the managerial skills required to start a business that many older workers have acquired. Many of these mature individuals have acquired readily available access to credit.
Baby Boomers Start Businesses Out of Necessity
Not all baby boomers are driven by an opportunity but some are driven by necessity. What this means is that some baby boomers didn’t have a choice as to whether to start a business. Some because of the recession were driven to self-employment due to the inability to find a job after a job lost while others are using it as an opportunity to supplement their income.
50 Plus Baby Boomers Face Unique Challenges When Starting Business Regardless of the reason, many baby boomers are forging ahead, creating jobs for themselves and as well as others. Unlike the traditional entrepreneur, baby boomers face unique challenges. Some the challenges include family issues. With accumulated wealth, some family member may be concerned about the potential loss their inheritance when a baby boomer invest a substantial about of their assets into a business. They also must be concerned about succession planning at a much earlier stage than a traditional business. Who and when will succeed them in the business.
Baby boomers must also weight the risk verses the rewards of starting a business later in life. If a younger person starts a business and it doesn’t pan out, they have more years to recuperate from a business loss than an entrepreneur in their fifties or sixties.
With the onset of technology many businesses can be started and promoted with very little capital. Yet many baby boomers are challenged with use of technology and social media. This is an issue that could potentially be solved developing a partnership with the right entrepreneur. Just as a baby boom entrepreneur bring networks, capital and experience, a younger business partner could bring fresh ideas, insight into technology and experience in social media. This could be a win-win for both partners.
Baby Boomers Better Prepared to Start Business than their Younger Counterparts.
Baby Boomers are thought to have more potential for business success than their younger counterparts due to some inherent characteristics. Because boomers are older and have been in the workforce much longer they naturally have more experience to draw from, capital, credit and networks to use in their businesses. See quote in Calgary Journal article: "That's where you see a lot more older people getting into it, fifty plus entrepreneurs getting into things because they have a lot of experience, credibility, they've got networks all over the place of people who trust them, and they have some money behind them," Crane says, and a point that was also mentioned by De Paul, that it is the connections that the entrepreneurs have that help them succeed.
Also according to a study done by the Kauffman Foundation baby boomers 55 and older have twice the household assets ($249k/$178k); half the business debts ($24k/$51k); and generate twice the revenue ($361k/$168) as younger, less experienced entrepreneurs.
Baby Boomers Need Special Support When They Start Businesses
Some boomers may not be as astute in technology, social media and as well as other business skills; therefore, they made need some specialized training to bring them up to speed. Special needs can also be offset with the right partner. Finding the right partner with the right complementary skill sets can go a long way in helping the business grow quickly while maturing into a successful venture.
Because of their age and the need to retire from a second-act-business sooner than a younger entrepreneur, boomers must plan ahead of time. The business funding they provide for the business enterprise should be a good fit for their risk profile. Their exit strategy is crucial and should be planned and documented.
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