There’s a quiet revolution happening in this country. You may have heard rumblings of it, or you may even be part of it. There’s a new breed of entrepreneur that is having a big impact. Sometimes called ‘Encore Entrepreneurs,’ or said to be starting their ‘Second Chapter,’ first-time small business owners over 50 are on the rise.
There may not be any such thing as a ‘typical’ encore entrepreneur, but there are some characteristics they share.
First, there are a lot of them. In fact, PBS Newswire reports that there are now twice as many entrepreneurs over age 50 as there are under age 25. And they’re not going anywhere either. According to the 2015 Hiscox DNA of an American Entrepreneur Report, most (74%) entrepreneurs aged 50 – 59 do not plan to exit their businesses in the next five years.
They start their businesses for a few different reasons. In some cases, they may be turning a lifelong hobby into a business, because they’ve decided to get out of the corporate ‘rat race’ and do something they love. In other cases, they may be concerned about downsizing, layoffs or ageism in their workplace, so they make a preemptive move.They may come up with better ideas, and be better able to execute them. Successful companies are built on satisfying a need. Understanding that need comes from experience.
They have a network. The idea is only part of the battle. Once you have the idea, you need to execute. People over 50 often have the networks, connections and just plain chutzpah to turn their ideas into actions that 20-somethings lack.
They take smart risks and insure their businesses. Those over 50, with their real world experience, better understand the nitty gritty details of running a business. They’re more likely to protect their investment with liability insurance, and they understand the importance of hiring people who have skill sets they lack to round out their team.
The Great Recession - A perfect storm for baby boomer entrepreneurs
The Great Recession of the late 2000's caused a kind of perfect storm for those who were in their early fifties at the time. Many got laid off and had trouble finding new jobs that would pay them what they were used to, if they could find jobs at all. Outsourcing and younger, cheaper employees fresh out of college meant that many people with 20 or 30 years of experience couldn’t find work.
These boomers may have lacked job opportunities at the time, but they did have a couple of other things. They had experience, and they had contacts. They had built up networks of other professionals whom they could call on as partners, mentors and customers.
In many cases, they also had savings. They could draw on their 401K accounts or on the equity in their homes. Their spouses may have had jobs that could support the family during the start-up phase.
So they started their own businesses. In some cases, being their own boss was something they had always wanted to do, so they took the chance. In other cases, they simply felt they had no other option. But whatever the impetus was, they started their own businesses, and many of them have been successful.
Some boomers exhausted their savings looking for a new job before they decided the answer was to start a business. These entrepreneurs feel they may need to work well into their 70's because of the toll the recession took on their retirement savings, and they fear that a large corporation won’t let them do that.
Finding a new kind of courage
The older entrepreneur is busting the myth of the tech startup born in a dorm room. Just as the path to entrepreneurship is different for the over-50 crowd, there’s a different kind of courage that’s needed as well.
Mature entrepreneurs also demonstrate courage, but sometimes in different ways. The courage it takes to tap into your 401K to bootstrap your dream is different from the courage it takes to postpone college to work full time on your technology startup.
After a 28-year career in IT, Marie Bankuti felt it was time for a change. She researched her options and landed on life and leadership coaching. After her first day of training, she knew she was making the right choice. “I didn’t feel courageous at the time,” said Bankuti, now owner of Tether Free Vision coaching in Maynard, Massachusetts. “But looking back on it now, I can see that it really took a lot of guts.”
In fact, Bankuti started out coaching on the side. It was two years before she left her full time IT consulting job—the first time. “I jumped too soon and had to go back to IT for a time,” Bankuti said. “But I set a goal to do some financial self-care and try again. I gave myself a year to get into a position where I could make the move to coaching permanently. After eight months, I made the move permanently, and in eight years I haven’t looked back.”
The willingness to keep on trying and to overcome setbacks is indicative of the older entrepreneur. Having been through life experiences that haven’t always gone as planned, they have a different outlook on failure, often seeing it as an opportunity to take a new approach.
Entrepreneurs over 50 have a better understanding of the risks involved in a startup and how to manage them. When your retirement savings are on the line, you may have a different approach to opening that second location or adding an untested product to your mix. More experienced business people also understand the value of having a comprehensive liability insurance package to protect your business—and your investment—from the unexpected or unavoidable.
Are you an entrepreneur over 50? What prompted you to start a business? Do you think you have an advantage over the youngsters?