The American entrepreneurial dream isn’t a one-size-fits-all proposition. Commercial success stories are as diverse as the owners and innovators behind today’s great ventures. So while there’s nothing wrong with knocking one out of the ballpark at a young age, there’s no expiration date on finding commercial and financial success. If your entrepreneurial drive is strong and your methods are sound and disciplined, launching a business after reaching age fifty can be a rewarding challenge.
Launching a Midlife Business Venture
It is thought many entrepreneurs share similar traits, setting them apart from other members of the work force. If it’s true that innate qualities contribute to people’s entrepreneurial drive, then it only follows that self-employment dreams don’t go away after reaching a certain age. Starting a business during midlife may require careful consideration, but the fastest growing segment of entrepreneurs recently came from the age group 55-64, comprising 26% of the total, which has risen from its 15% level in 1996, according to the Kauffman Foundation.
In addition to entrepreneurial investment for growing businesses, many older adults are self-employed within the freelance economy. It is thought as much as a third of the working freelance population comes from the 55 and over age group.
If you’re considering a business launch, but wonder if it’s age appropriate, answering a few questions can help assess the suitability of striking out on your own over age fifty.
- Do you need to acquire new skills or update your expertise, before launching an independent venture?
- Are you ready for an all work, no play, lifestyle?
- Can you afford to invest and risk retirement resources? Even with little time to recover, should your business flounder?
Why Do Older People Consider Self-Employment?
Gallup data shared in a recent article suggests independence is a primary motivating factor for entrepreneurs of all ages, closely followed by the desire to pursue personal passions. The latter may contribute to surging later-in-life interest in entrepreneurism. After establishing and working lengthy careers for their earning potential, many older self-starters crave a chance to pursue their interests, with less emphasis on making money.
In addition to personal preferences and the desire to embrace passions, good old fashioned necessity also plays a prominent role in many over-50 entrepreneurs’ decisions to strike out on their own. At least 25-percent of Gallup survey respondents identified the need to make more money as an important reason to consider entrepreneurism.
Shifts within the job market may also influence would-be entrepreneurs. Many staffers over age 50 have fewer opportunities in the workforce, so as options diminish, owning a business may present the most consistent earning alternative for aging professionals. It appears older self-starters lean on experience and a lifetime of networking to find freelance employment success. One study showed average earnings among baby boomers to be 79K, while freelancing full-time, compared to less than 48K for members of the millennial generation.
Test The Waters?
Starting a business is an intimidating prospect, at any age, so it’s important to understand as much as possible, before making sweeping commitments. Launching a business when you’re over age fifty complicates matters, because you have fewer years to recover from business setbacks. With so much at stake, some aging entrepreneurs are more comfortable wading into self-employment, rather than jumping in, all at once.
Under ideal conditions, you’d have an opportunity to actually perform work and interact with clients on a freelance basis, before giving up your job or investing substantial startup capital. It isn’t always possible, but making a slow start, completing side work projects during evening and weekends, can be a good way to measure your entrepreneurial commitment and get a genuine sense of what it’s like to generate self-employment income.
Even if you’re unable to orchestrate a trial run for your over-50 business venture, it may still make sense to start small, to protect your financial exposure. Rather than risking retirement resources or leveraging savings, some baby boomer entrepreneurs use small commercial loans or crowdfunding to get their businesses off the ground, and then reinvest as an enterprise generates sales and revenue.
Keeping your overhead as low as possible during the early days of self-employment is one way to limit startup costs. Fifty-somethings starting businesses may benefit from co-working spaces, which offer shared conference space and private desk time, for a fraction of the price of a full-time office lease.
Exploit Your Experience
Despite the many challenges facing small business entrepreneurs, would-be owners over age 50 bring an extra measure of experience to the process. Your age can be a tremendous asset when striking out, because you’ve built expertise others can’t replicate without putting in the time. As you build a business plan, don’t underestimate the value of wisdom and your time spent absorbing knowledge and honing insight into your field. Price yourself accordingly.
Consulting stints can be lucrative for experienced professionals willing to contract services, and your seasoned status as an over-50 provider can itself be used as a marketing tool, setting you apart from less well-rounded members of the talent pool.
Motivation varies among entrepreneurs who are older than fifty and eager to strike out on their own. For some members of the group, leaving conventional work roles in favor of self-employment provides a chance to make more money. Other over-50 entrepreneurs take the plunge to explore personal passions, while still another set of baby boomers turn to self-employment after experiences with an unwelcoming job market for aging workers. Whatever’s behind their decisions to become small business owners, an increasing number of entrepreneurs over age fifty are finding self-employment success.