- More than 80% launch ventures as a lifestyle choice or to boost income
- Are twice as likely as millennials to plan to start a business
- Among challenges: access to credit and training
This article is part of an ongoing series analyzing how baby boomers -- those born from 1946-1964 in the U.S. -- behave differently from other generations as consumers and in the workplace. The series also explores how the aging of the baby-boom generation will affect politics and well-being.
Leaders looking to promote entrepreneurship in their cities and regions may find an abundant source of business builders among people older than 50 -- they are one of the fastest growing groups of entrepreneurs in the U.S.
But why do people in that age range -- many of whom may have already had lengthy careers working for established organizations -- want to start businesses? When Gallup studied nearly 2,000 U.S. baby boomers, including entrepreneurs and non-entrepreneurs, we found that an overwhelming majority -- 83% -- say their main reason for launching a venture was a lifestyle choice or to increase their income.
Many baby boomers are looking for what the Small Business Administration describes as an "encore" career. These boomer entrepreneurs are primarily choosing to start businesses because it allows them to be independent (32%), pursue their interests and passions (27%) or increase their income (24%), rather than committing to the grueling task of starting and managing a high-intensity, high-growth venture. Very few (10%) are pursuing an idea for a new product or service that solves a problem or meets an unfulfilled need in the market -- the type of business that would typically have immense growth potential.
Perhaps for boomer entrepreneurs, these reasons reflect their current stage in life. Regardless of their motivation for starting a venture, many boomers are finding entrepreneurship to be a fulfilling encore career.
The Environment for Boomer Entrepreneurship
Gallup asked boomer business owners how they feel about the entrepreneurial ecosystem in which they live and operate, and their responses may interest leaders trying to foster job creation in their communities. The challenges boomer entrepreneurs face are fairly similar to the ones that confront younger entrepreneurs: access to credit, availability of training and information and coping with regulations, among others.
Two-thirds of baby boomers (66%) who own businesses agree or strongly agree that they can easily think of people who would be great partners if they ever decided to start a business. This is a clear advantage that boomers likely have gained from decades of cultivating professional contacts through work.
Outside of social capital, though, boomer entrepreneurs are less likely to agree or strongly agree that information relevant to growing a business (47%) and entrepreneurial training and education (35%) are easily or readily available in their city or area. And about four in 10 agree or strongly agree that the city or area where they live is a good place to live for entrepreneurs forming new businesses (44%).
Boomer entrepreneurs also say there are two major obstacles to starting businesses in their area. Specifically, only 12% agree or strongly agree that government makes it easy to start or run a business, and only 9% agree or strongly agree that it's easy for anyone to obtain a loan to start a business in their city or area.
How to Bolster Business Creation Among Boomers
Young, high-tech entrepreneurs may get the most attention from investors, but in the technology sector and other high-growth industries, boomers often outpace their younger counterparts in building successful businesses. The wisdom that comes from years of professional and trade experience likely translates into better business performance for boomers.
Gallup finds that among adults age 18 and older who don't currently own a business, boomers (12%) are twice as likely as millennials (5%) to say they plan to start a business in the next 12 months. It's imperative, then, to support these older potential entrepreneurs.
Here are some key insights into what boomer entrepreneurs require to develop successful businesses in your city or region:
- Entrepreneurial boomers must consider their readiness for the role. Entrepreneurial-minded boomers shouldn't expect their new business endeavor to be the same as working for a company. Dealing with ambiguity, uncertainty and a high probability of failure is part of an entrepreneur's role. Aspiring entrepreneurs must understand how different biases distort their decisions; how they foster partnerships; how adaptable they are to an ever-changing business environment; and how they persuade others to buy in to their point of view. Understanding one's strengths and vulnerabilities will accelerate the entrepreneur's personal development and enhance the venture's sustainability and growth.
- Prospective entrepreneurs must connect with local resources that can aid in business planning. In most cities and regions, the AARP and Small Business Administration offer information, services and training to help older entrepreneurs grow their businesses. Resources also include "encore" entrepreneurs' professional networks. Boomers' existing relationships can help further their business interests, but they should consider actively networking and expanding their reach. New relationships, particularly ones rooted in the desire to obtain critical business resources, can form a support system for boomers to lean on when the going gets tough.
- A good coach can help even established entrepreneurs. Though people over 50 may have deep expertise and a wealth of experience from their previous jobs, entrepreneurs can still benefit from working with a coach, mentor or business adviser -- someone who can provide counseling and support. Potential or current business owners alike need help navigating complicated regulations and legal issues, refining their ideas and marketing, and promoting their businesses with traditional and emerging outlets -- critical aspects of starting and growing a new venture that entrepreneurs of every age may not know much about. Readily available coaching and mentoring programs should be an essential part of any city or regional program for developing business builders.
Public and private sector cooperation in addressing the perceived challenges articulated by boomer entrepreneurs -- lack of training, access to credit and regulatory burdens -- would benefit current boomer business owners and help convert a larger proportion of those who might be considering a new business venture. Supporting those over 50 who want to launch and grow businesses is crucial for reversing the trend of American business deaths outnumbering business births and accelerating sustainable economic development.
This study is based on individuals aged 50 to 70 years of age (baby boomers) from the nationally representative sample of entrepreneurs, drawn from Gallup Panel members aged 18 years and older, living in all 50 U.S. states and the District of Columbia. Gallup Panel is a probability-based, longitudinal panel of 60,000 U.S. adults who are selected using random-digit-dial (RDD) and address-based sampling methods. Panel members can be surveyed by phone, mail or Web. Gallup Panel members with access to the Internet were invited to take the Gallup Profile 10 online. Web surveys were conducted March 31-April 21, 2014, with a random sample of approximately 14,128 respondents, which included 2,697 business owners. There were 1,906 baby boomers in this sample (229 entrepreneurs and 1,677 non-entrepreneurs). Interviews are conducted with respondents via the Web, in English only. Samples are weighted to correct for unequal selection probability and nonresponse. The data are weighted to match national demographics of age, gender, education, race, ethnicity, region and business ownership. Business ownership weighting targets are based on the most recent U.S. Census figures for the aged 18 and older self-employed population. For results based on the total sample of boomer non-entrepreneurs, the margin of sampling error is ±3.2 percentage points at the 95% confidence interval. For results based on total sample of boomer entrepreneurs, the margin of sampling error is ±8.7 percentage points at the 95% confidence level.