Baby boomers are prime candidates for starting and running small businesses. According to the Kaufmann Foundation (www.kaufmann.org) which studies entrepreneurial activity in the U.S., Americans in the 55-64 age group start small businesses at a rate that is greater than all other age groups.
First, as members of an older demographic, baby boomers are at high risk of becoming unemployed and then having difficulty finding a new job within the same industry. Let’s be honest about it. Employers are looking to hire younger workers who can be paid less. These employers are reluctant to hire an experienced worker for a lower paid position. They are afraid that the over-qualified baby boomer employee will be resentful of the lower compensation. They do not want an employee who may be looking for other work almost from day one.
A second reason why so many baby boomers end up starting small businesses is that they are tired of their career, job or employer. Boomers are looking to do something new and more exciting or stimulating in the final phases of their working lives. Also, with what has happened to the retirement accounts of so many of Mr. GoTo’s fellow baby boomers, working longer is one strategy for recovery. Owning and operating your own small business is an excellent way to meet that financial need. Even if there is no financial need to work longer, some folks just enjoy having something stimulating and rewarding to do even in retirement.
A third reason that baby boomers are so active in forming small businesses is that many boomers have the business experience necessary to identify, evaluate and exploit new business opportunities. There is no substitute for the wisdom, knowledge, and judgement that is developed from 25-35 years of actual work experience. We still have plenty of energy to apply these critical life and work skills in launching a new business and making it successful.
Finally, baby boomers are often possessed of the resources to fund or borrow what is needed to capitalize a new business. Funding a small business start-up may not be as easy to do after what happened in 2008. Nevertheless, a lender or investor will value the work experience and personal financial resources that a boomer can bring to the table when they are evaluating a business plan.
In recognition of the strong association between baby boomers and small business start-ups, the Small Business Administration has introduced a web site for over-50 entrepreneurs. Right now, the over-50 business site is primarily focused on linking the baby boomer to other small business resources. Nevertheless, these resources are helpful. It is likely that the SBA will expand this site as more baby boomers explore small business formation as a response to being unemployed, underemployed, or bored in their existing jobs.
If you join the ranks this year of the unemployed (whether voluntarily or not), consider the opportunities available to you in the small business community. Creating a job may be the best way for a boomer to find a new job.
Are any of you recent or prospective small business owners?