Boomers lead just how with business startups
Entrepreneurs within their 50s and 60s have become companies faster than any other group.
Norma Davis was 55 when she opened an inside children’s gym that specializes in bounce houses and birthday parties.
John Olson spent 11 years working his way up in supermarket management before quitting to carefully turn his hobby making backyard fountains right into a retail business.
Jayne Dearborn was a hospital dietitian turned stay-at-home mom whenever a family tragedy prompted her to change gears and begin a designer handbag business.
If it appears as if stories about middle-aged entrepreneurs like Davis, Olson and Dearborn are showing up everywhere, it is because they are.
Younger entrepreneurs may hog the spotlight, but seniors are becoming companies faster than anyone. From 2007 to 2008–the latest data available–new businesses launched by 55- to 64-year-olds grew 16 percent, faster than any other group, in line with the Ewing Marion Kauffman Foundation, a nonprofit group that studies U.S. business startups. All told, boomers for the reason that generation started approximately 10,000 new businesses per month.
The trend is indeed strong that the Kauffman Foundation predicts a sustained entrepreneurship boom, not regardless of the country’s aging workforce, but due to it.
Other researchers agree. "The older you are, the much more likely you should be self-employed or a small-business owner. I don’t believe it’s new, but I really do think it’s growing," says Edward Rogoff, the Lawrence N. Field Professor of Entrepreneurship at Baruch College in NY. "Older people have to earn more income than they did before and their likelihood of finding traditional employment are restricted, so more of these get pushed into entrepreneurship. Or they just think it is attractive."
As entrepreneurs, people within their 40s, 50s and older have a whole lot choosing them, including a career’s worth of accumulated understanding of a business and a network of individuals to tap as financiers, suppliers or customers. Recession or not, they’re also much more likely to have retirement or other savings to invest in a fresh venture.
Nobody says it’s easy. Older entrepreneurs face obstacles their younger counterparts needn’t worry about — especially time. If you are starting a business in an effort to supplement your earnings, you can’t wait the normal five years or even more that younger entrepreneurs are told to anticipate before turning a profit, says Rogoff, co-author of a fresh book about them, THE NEXT Chance Revolution: Becoming Your Own Boss After 50. And if you are older, you can’t afford to bet the ranch on a fresh venture and lose because you do not have enough time to earn that cash back again before retiring, he says.
Mature entrepreneurs will have family must consider when weighing the sacrifices essential to make a fresh business work, says Melinda Emerson, a small-business coach and writer of the book Become Your Own Boss in 12 Months. You will have to get all of your family’s buy-in, Emerson says, "because scaling back everyone’s lifestyle is a hardcore order, but it’s what must be done."
EFFORT and Hustle Nevertheless, later-life entrepreneurs who plan the rigors of startup life can enjoy rewarding outcomes.
When Norma Davis retired from a 27-year career at Verizon, she knew she wished to run her own business and took time to research the possibilities. 1 day while babysitting grandson Prestin, she took him to a party at an inside gym. "I held him in my own arms and walked around and thought to myself ‘This could it be.’"
But getting from inspiration to grand opening of her PNP Family Play Center in the Philadelphia suburb of Lansdowne took a good year. Davis researched locations, so when she couldn’t find a preexisting one, she leased a clear lot and drew up blueprints for a building tall enough to accommodate an 18-foot-high slide and other inflatable play structures. She also bought commercial time on the neighborhood cable television channel, built a website, and got first-aid and CPR certifications–funding from retirement savings.
Twelve months after PNP’s grand opening, Davis spends four days weekly running the center if it is open and the other three cleaning it. She’s 10 employees, including several members of the family, but doesn’t expect one to share her passion. "No one’s likely to address it like it’s their business but me," she says.
The recession put a damper on business last summer, but Davis expects to carefully turn a profit next year. Meanwhile, she couldn’t be happier. "You’re on your own toes and you’re constantly thinking, but it’s a great job. Your reward is seeing the children’s eyes light if they walk in the entranceway."
Hobby FORGET ABOUT Some later-life entrepreneurs turn a spare time activity right into a second career. John Olson carved table-top fountains out of gray lava rock in his free time while working as an assistant manager at the Publix grocery chain. Whenever a corporate restructuring reduced his salary, Olson took early retirement and began marketing his fountains to garden centers in earnest, cramming parts into spare corners of his Sunrise, Florida, home. Soon Olson expanded his offerings, moved his online business and hired outside contractors to control the warehouse, orders and customer support.
Olson, 45, credits his success to lessons learned in the grocery business, where his duties included helping store managers streamline processes to bring costs down and profits up. Those efficiencies helped his company thrive as the recession pushed some competitors out of business. In September 2009, Olson bought a former executive retreat in the Smoky Mountain foothills 90 minutes outside Atlanta that now serves as his family’s home, and also the headquarters for his company, GrayStone Industries, another warehouse. A retail fountain shop is in the works.
This season, Olson expects his onetime hobby to create sales of $2 million. His only regret isn’t starting sooner. "I thought you’d to be some type of Harvard Business School graduate," to create a company, he says. "But I realized you merely need to apply basic business principles."
Making a notable difference It’s common for later-life entrepreneurs to start out a business to reconnect with a former passion or even to change lives. Jayne Dearborn did both.
After Dearborn’s 7-year-old son, Max, died of childhood acute myelogenous leukemia (AML), the former dietitian and West Linn, Ore., resident, considered a long-buried love of art to heal. She started making fabric handbags and providing them with to friends. Next came sales at trunk shows, and today her company, JayneMax, sells fabric and leather purses to 20 boutiques in the united states. Her creations have appeared in magazines and on TV’s Ugly Betty. Demand outstripped Dearborn’s capability to do everything herself, so she outsourced manufacturing to China and turned over sales to her husband, Chris, who retired from his high-tech job in 2008 to greatly help run the business enterprise.
Part of Dearborn’s impetus for starting a company was to improve money for Max’s Blue Butterfly, a nonprofit she established in ’09 2009. Since that time, she’s collected $10,000 and is organizing the foundation’s first major fundraiser for Cincinnati Children’s Hospital’s research into childhood AML.
"Handbags were fun, and I possibly could see it growing right into a business for all of us," Dearborn says. "Nonetheless it wasn’t enough for me personally. I felt like I needed this other component where I possibly could surrender in a bigger way."