Business start-upsin 2009 were at a 14-year high, according to the latest research by the Ewing Marion Kauffman Foundation1, and the age group most likely to start businesses is 55-64 years old, according to an earlier Kauffman report2. With this strong supporting data on Baby Boomers starting businesses, many have asked themselves, "Is now really a good time for Boomers to start businesses?”
This article is written for both faculty who are working closely with nascent entrepreneurs planning their business start-ups, many 50+ years of age, and administrators planning innovative programs to reach specific target markets in their communities, with the Boomer population being one too large to overlook.
Let's discuss why "now” really IS a good time for many Baby Boomers to start their own businesses.
The volatile economy and depreciated retirement accounts are just a few of the reasons some Boomers who may have never before considered starting their own businesses are doing so now. They want to shore up their retirement nest eggs, supplement retirement income or avoid returning to the corporate world. For the types of businesses many Boomers start—low risk, lifestyles business—the timing may be just right, and here is why.
Opportunities are created by changes in the marketplace, which is something we've definitely seen in the last several years. Disruptions in the status quo create opportunities for the alert entrepreneur. One only has to look to history to see examples of companies that have started and flourished in down economies, including McDonald's and Microsoft.
Many Boomers are looking to start businesses that have low start-up costs. At 50+ years old, they want to minimize their financial investment and risks. Many self-finance their businesses. As such, tight credit in the current economy will not have the same impact on them as it will on start-ups that require a lot of capital.
Starting a business takes time. If Boomers just retired or lost their jobs, time might be the resource they have in greatest abundance. By using their time to plan, research, develop and test the market, they will be poised to take advantage of economic growth as it occurs. Starting a business in a slower economy provides time for them to learn valuable lessons, gather information and establish a track record that will prepare their business for future growth.
Customers are different. Loyalty to current vendors often loosens in changing markets as buyers look for better value and less expensive products and services.
Opportunity cost may be low. The opportunity cost of a decision is what is given up when a person chooses one alternative over their next-best alternative. For those who are retired or displaced from their job, the opportunity cost, what they give up by starting their own business, may be their golf hobby or watching Oprah.
Some business costs will be lower than in a thriving economy. This can be anything from employee costs (talented employees may find themselves out of work and willing to work for less), rent, office equipment and advertising.
For many Boomers, these factors have tipped the scale in favor of starting a business now rather than waiting for the economy to recover.
Workshops such as "BoomerPrenuers: How Baby Boomers Can Start Their Own Businesses, Make Money and Enjoy Life,” based on my book by the same name, are planned this fall at Gulf Coast University in Ft. Myers, FL. A shorter version of the workshop, "Three Common Mistakes Baby Boomers Make When Starting Businesses and How to Avoid Them” is planned this fall at Palm Beach State College in Boca Raton, FL. To request a free-of-charge Workshop Facilitator's Guide, e-mail me at mbizard@consultACH.com or call me at 913-268-6873. This is an excellent opportunity to reach out to Boomers in your community.
Special Offer:Article based on book, BoomerPreneurs: How Baby Boomers Can Start Their Own Business, Make Money and Enjoy Life, by Mary Beth Izard, which is available to NACCE members at a 30 percent discount off retail price if purchased by September 30 at www.consultACH.com