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Seniorpreneurs: Building Busines with Life Experience
by Cesca Janece Waterfield Thomas Schievelbein, President of Newport News’ Northrop Grumman will retire in November making way for C. Michael Petters to take his place. When Schievelbein announced his decision by saying he was eager to begin “the next chapter of my life,” he might have spoken for a generation. A recent survey by Harris Interactive and AIG Sun America revealed that nearly half of people 55 years and older view retirement as “the next chapter,” a time to look forward and explore new ideas. Among people of retirement age, self-employment and entrepreneurship are on the rise. According to the AARP, about one third of self-employed workers age 51 to 69 made the transition to self-employment or entrepreneurship after age 50. Though those aged 50 and older comprised 25% of the work force in 2002, “seniorpreneurs” made up 40% of the self-employed. The trend is not limited to the United States. A quarter of self-employed Canadians are over 55 years old and of all Canada’s workers over 55, 33% are self-employed. New Zealand shows a similar trend, and in the UK, the growing numbers of older businesspeople are termed “third-age entrepreneurs.” This pattern is not expected to reverse anytime soon. As life spans increase, people are expected to seek self-employment progressively more. Their reasons are varied: Contrasting with the answer most given by younger business upstarts, research shows that “increased freedom” is not seen as primary lure among older entrepreneurs. Instead, they offer as one motivation the wish to pass something on to their families. And while financial need or the desire to supplement retirement or Social Security benefits are factors for some, most older people seeking self-employment cite their aspiration to work. Additionally, financial solvency resulting from retirement packages, savings, and home ownership often provides the resources a new business demands. Also, after years as employees, the opportunity to pursue what may have always been a dream is appealing, particularly during a restless retirement. Researchers at AARP assert that based on income and wealth, self-employed workers are better off than their wage-earning and salaried counterparts. Moreover, for women who spent lives raising children, this age may present the first occasion they’ve had to start a business or pursue self-employment. Statistics seem to support this theory: Among women aged 25 to 54, 6% are self-employed, compared to 9% among those 55 to 64. Among women 65 and older, self-employment jumps to 14%. Research has revealed little difference between industries that older self-employed explore and those younger enter. However, according to FRANdata, older Americans often find franchises particularly attractive. Because franchises come accompanied by a proven business plan, older entrepreneurs find them reasonable risks, even as a second and completely new career. Obviously, any would-be entrepreneur faces formidable obstacles. Along with the experience and wisdom of age, however, come some unique challenges. Banks routinely consider health when making lending decisions, a practice that doesn’t always favor an older applicant. Some banks, however, deny this notion, and argue that they actually view older entrepreneurs as lower risks, due to their generally wise financial management. Finally, the dearth of research regarding self-employment among older workers and seniorpreneurship may be considered an obstacle. A call to universities in Hampton Roads found no active research on the subject and internationally, the situation is similar. One thing experts say should not be deterrence; losing Social Security Benefits. Those 65 years and 4 months of age or older can keep the entirety of their SS Benefits regardless of their earnings. Those ranging in age from 62 to 65 and 4 months will see their benefits reduced by one dollar for every two dollars earned over $11,640. Complete information is available at www.ssa.gov or 1-800-772-1213. Despite the paucity of research on seniorpreneurs, there are resources to help them get started. Specifically for older entrepreneurs, www.notretiredyet.com presents commentary and advice while www.score.org provides free e-mail counseling and workshops to business hopefuls. The Department of Labor offers www.acinet.org which has an array of resources for those seeking new careers. Finally, www.aarp.org has many resources and has conducted the bulk of existing research on seniorpreneurship. AARP polls recently confirmed that aging baby boomers wish to become self-employed or begin new businesses upon retirement. As the numbers of seniorpreneurs and older self-employed increase, research will have to catch up with the trend. Back
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