Where Older Entrepreneurs Can Find Help
Article by Anne Tergesen from OnlineWSJ.com
Faced with cracked nest eggs and a lackluster job market, older Americans are becoming entrepreneurs. If you’re a baby boomer with a business plan, you should know about a growing number of free and low-cost resources, some specifically geared for your generation.
According to the nonprofit Ewing Marion Kauffman Foundation, individuals between the ages of 55 and 64 represented 23.4% of the entrepreneurs who launched businesses in 2013—up from 14.3% in 1996. In recent years, the foundation says, this age group has created new businesses at a higher rate than any other. The data, writes Kauffman research director Dane Stangler, indicate “the United States might be on the cusp of an entrepreneurship boom—not in spite of an aging population but because of it.”
Some boomers are testing deferred dreams; others are seeking to remain in the workforce without being saddled to a 9-to-5 job. Entrepreneurship is “the new passport to funding your longevity,” says Mary Furlong, professor of entrepreneurship at Santa Clara University’s Leavey School of Business. “Many know they have to work longer but want something more flexible and fun than a traditional career.”
Perhaps in part because they come to these ventures with greater experience and skills than their younger counterparts, older entrepreneurs typically enjoy higher success rates. According to a 2013 report by Nesta, a U.K. foundation, 70% of startups founded by people age 50 or older last more than three years, versus 28% for those younger than 50.
But older entrepreneurs also face a different set of challenges than the Mark Zuckerbergs of the world. For one thing, many have less time in which to recoup an upfront investment, says Michele Markey, vice president of Kauffman FastTrac, a 10-week program the Kauffman Foundation offers to entrepreneurs of any age. It recently added a $700 version for baby boomers.
And because those nearing retirement must safeguard their nest eggs, boomers who can’t afford to lose money should line up other funding sources, says Edward Rogoff, a professor at the Lawrence N. Field Center for Entrepreneurship at the City University of New York’s Baruch College, which offers free classes for older entrepreneurs. “When you are 67, you can’t bet the ranch and expect to have time to make it back if something goes wrong,” says Prof. Rogoff. “When you are 27, it’s easier to take more risk.”
To reduce upfront costs, Baruch advises older entrepreneurs to market-test a simplified version of their products and services. Prof. Rogoff recommends seeking investments from friends, family and incubators, which take small stakes in startups in return for providing temporary office space and advice on structuring, marketing and financing operations. Other sources of capital include crowdfunding websites like kickstarter.com and nonprofit micro-lenders, such as Accion International.
Because the stereotype of an entrepreneur is that of a young technology genius, many older adults also need encouragement.
“It helps them to know that they are not the only person considering launching a small business at this point in their lives,” says Debbie Banda, interim director of financial security at AARP. The organization, together with the U.S. Small Business Administration, began offering free “speed mentoring” events throughout the U.S. and a 30-minute online course for older entrepreneurs in 2012. (Visit aarp.org/startabusiness and sba.gov/encore.)
No matter your age, the best place to start your research is with one of dozens of Small Business Development Centers or hundreds of entrepreneurship programs at colleges and universities nationwide. (Women can also visit one of nearly 100 Women’s Business Centers.)
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