Silverpreneurs–new venturing at 55+

In the middle of your life you find yourself in the process of reinventing who you are or what you do. Maybe both. What a great opportunity!

This page is just an introduction. More help lies in Silver-haired Head Start and Relaunch Yourself.

I like the term startups for grownups, but such veterans are also referred to as ‘senior entrepreneurs’, ‘third-age entrepreneurs’, ‘elder entrepreneurs’, ‘gray’ or ‘silver’ entrepreneurs. and ‘second-career entrepreneurs’.

The impetus to change may come from within yourself or from an outside stimulus. You are not going to turn into something you are not. But you surely know a person who has made such a change and have made the comment, “You are so different these days!” I do. And I know many who say of themselves, “I feel so much younger!” as a result of the process.

Examples of the inner push to self-reinvention are

  • you are fed up with a soul destroying job;
  • you are questioning what is important in life;
  • you contemplate an empty nest;
  • you are newly on your own;
  • you are restless.

Examples of the outside circumstance

  • your job has ended;
  • your partner has relocated;
  • the skill you have used is no longer needed;
  • you retired early;
  • you need to supplement social security/pension.

Silverpreneur advantages… and risks

Seniors doing startups have advantages including:

  • industry credibility and a track record in business;
  • confidence in proven abilities and are usually more effective leaders;
  • established credit and personal resources making for easier capital raising;
  • computers have made it much easier to operate a home-based business.

There are some higher risks for silverpreneurs as well:

  • health questions;
  • recovering from failure may be more difficult;
  • the free-time anticipated in retirement may disappear;
  • alternative arm’s length investments may be preferable.

The great opportunity you have is to reinvent yourself. You can be different or do something different.

If you want some help before you leave your job, try the Nolo information on Retire—And Start Your Own Business: Five Steps to Success.

You may also like to know that the author of this website is in his seventies and aims at working another 10-15 years or so. So if you would like any help in this field, I may be someone you would like to talk with. A former colleague wrote to me not long ago and commented, “marvelous to hear how you keep reinventing yourself… you are an inspiration to us all.”

Contrary to popularly held assumptions, it turns out that over the past decade or so, the highest rate of entrepreneurial activity belongs to the 55-64 age group. The 20-34 age bracket, meanwhile, which we usually identify with swashbuckling and risk-taking youth (think Facebook and Google), has the lowest rate.

Perhaps most surprising, this disparity occurred during the eleven years surrounding the dot-com boom—when the young entrepreneurial upstart became a cultural icon. In every single year from 1996 to 2007, Americans between the ages of 55 and 64 had a higher rate of entrepreneurial activity than those aged 20-34. For the entire period, the 55-64 group averaged a rate of entrepreneurial activity roughly one-third larger than their youngest counterparts. This is reported in The Coming Entrepreneurship Boom, a June 2009 report from the Kauffman Foundation.

Why not do it–now?

About 80 percent of Baby Boomers claim they want to work in retirement, according to Sara Rix of the AARP. She says, “I think many of them will try self-employment.” This tallies with the US Department of Labor statistics which show that nearly half the country’s 7.4 million self-employed are boomers.

Why is this? Some will suggest that it is a young person’s world, hence those in the 55+ age group are the first to be let go in any downsizing. “It’s just demographics”, yet others will tell you, citing the aging population profile. It is also true that pensioned people may find that income has not kept pace with costs and retiring fully may have to be postponed.

All of these phenomena may be at work, but there are three factors which help to explain why startups are wide open for grownups.

People over 55 have the experience to be able to make it in the entrepreneurial environment. Starting a business involves calculated risk and older-aged entrepreneurs are better equipped to consider downsides as well as upsides. So gray hair helps, rather than hinders grownup startups.

  1. The cost of entering business is lower than in the past and sources of funds are much more varied. The over-55s probably have savings or useful assets, giving more flexibility. The average cost starting a new solo enterprise is less than $8,000 and in many cases is as low as $0.
  2. The changing nature of business has opened up new ways of doing business and created new channels of distribution, especially via the Internet. More and more tightly defined specialist business niches enable people to translate their experience, hobbies and interests into business.

Gray hair may be a disadvantage in job search, but in business startup it helps. Here’s why people of 55+ are better equipped than those in younger age groups to create a business:

  • passions convertible into business are based on career-long learning;
  • family commitments are likely either to be less, or better defined;
  • need for self-fulfillment may outweigh desire for higher earnings;
  • net assets may facilitate easier borrowing;
  • more disposable income to invest;
  • a good business proposition is more likely to be credible to lenders;
  • a broader skill set in greater depth;
  • life experience resulting in greater resilience.

These are just a few of the reasons that put grownups in a specially favored position to launch business startups. “I have a much clearer picture of what I want to create at 50 than I did at 20,” said one entrepreneur. “Older entrepreneurs generally have access to more capital and wisdom,” says another. Commenting on age difference, another said, “I just started my first business at 50. But then I keep hearing that 50 is the new 30.” It keeps you young, as I can testify with my most recent startup at 68 (this one) and here’s another witness of 62, “I don’t feel any older than I did at 42, probably because my mind and body never stops due to new business adventures.”

Self-financing is easier than you think

Setting up in business has been made infinitely easier with the Internet?you can search for information and ideas, find finance, read wise counsel and get business tools, register your business, obtain your EIN. These are but a few of the steps to startup that can be undertaken online. Many of the services that would have taken time and money, can now be conducted at your desk for free.

You can be up and running in days. Already the US ranks third in the world for the ease of starting a business, and it takes an average of only 6 days to get through the procedures, frequently less.

Many businesses can be established with little or no money, especially in the service sectors. Computers make the process easier. Financial bootstrapping will enable you to find amazing ways to fund your business without resorting to burdensome loans or giving away equity. Even if an older person does have to seek to a bank loan, there are less expensive ways of doing it, for example, by using a margin loan. A margin loan involves borrowing against your stocks, bonds or other securities. Typically you can borrow up to 50%, without having to present a business plan or fill out complex paperwork or going through a credit check.

Person to Person (P2P) finance and crowdfunding is growing fast. This means of avoiding loans through the banking system altogether, and results in less hassle and lower rates. Of course there are risks, especially to personal relationships, but they can be avoided by making sure you draw up legal documentation, especially promissory notes(see example), which define all aspects of the loan and its repayment.

You hear of the difficulty of raising money to start a business, but the majority of startups are self-financed, as shown by the fact that in 2007 more than 80 per cent of the ‘Inc. 500′ Fastest Growing Companies in America were self-financed; some (over 20 per cent) had loans from friends, family or business associates, while about 17 per cent had bank loans or lines of credit, and only about 7 per cent were venture capital backed. Remember, too, that these are the top of the heap startups. The number of all startups getting VC money is miniscule.

Cybermarkets and Niches

Selling online is now possible by many different routes. The most obvious means include e-Bay or Amazon as an individual or through the stores you can set up under their umbrellas. Your own site need not require you to have website building skills; there are endless options available, including the obvious ones like Google and Yahoo, but also services such as eCrater, a free online store builder and marketplace.

Combined with the ease of setting up, the Internet and craft fairs offer the possibility of greater and greater specialization. Customers have every facility to find the most esoteric of product. If you are a specialist or hobbyist, you will know where people with similar interests tend to congregate.It’s obviously easier on Main Street, but even people in rural areas can get things overnight by UPS or FedEx, both of whom have extensive services for small businesses, like back-office services or global trade consulting. So can Venture Founders’ ODEA—on-demand executive assistance.

Now, though there are also an infinite variety of intermediaries. If you are a craftsperson, for example, you can use Etsy, or ArtFire the new places to sell all things handmade, or if you offer print on demand services (T-shirts, mugs and the like) you can join 50 million other products at CafePress. In almost every sector of business, there are sites that will provide you with an outlet.

With ever-growing globalization and never-ending mergers and acquisitions, quite apart from the relentless growth in the size of corporations there are, at the same time, burgeoning opportunities for the smallest of businesses to offer highly specialized products or services in the gaps left by the big boys. These proliferating and narrowing niche markets are helped by daily more sophisticated Web communication, and also the small-is-beautiful tendencies of consumers.

Read more

If you want to read more about what sort of ventures you can set up at over 55 years-old, you can read my article, Re-launch Yourself at 55+.