By: Kerry Hannon
September 9, 2012
Unless you've been hiding in the woods, you know that it's all about jobs these days, particularly if you're running for President of the United States.
The federal job stats came out this past week.
For older workers, the report was more of the same. The unemployment rate for the aged 55+ workforce fell from 6.2 percent to 5.9 percent. Which is sort of good news. But the average duration of unemployment is a little more than a year for this group of workers vs. 36.1 weeks for those under 55. That's a long time to be pounding the pavement.
And many older workers really need a job. They're living longer healthier lives and are terrified that they'll outlive their retirement savings and want to be mentally engaged. Yet, as I write in my forthcoming book, Great Jobs for Everyone 50+: Finding Work That Keeps You Happy and Healthy ... And Pays the Bills, with an anemic job market tinged with ageism, lots of 50+ workers are taking matters into their own hands and becoming their own boss.
New business creation by the 55 to 64-year-old age group is up sharply over the past 15 years--from 14.3 percent of all entrepreneurs in 1996 to 20.9 percent in 2011, according to the Kauffman Index of Entrepreneurial Activity, 1996-2011.
In June, an AARP/Society for Human Resource Management (SHRM) survey of 50 + employed workers revealed that one in twenty plan to start their own business; nearly one in five unemployed workers would prefer to do the same.
And research released by Encore.org, a think tank on boomers, work and social purpose, shows that approximately 25 million people--one in four Americans ages 44--70--are interested in starting businesses or nonprofit ventures in the next five to 10 years.
In my recent AARP Great Jobs column, I explain how older entrepreneurs have a lot of things working in their favor-a strong work ethic, management experience, a well-established networks of potential customers, and with some tech-savvy, it's possible to set up shop from a home office.
As a result, AARP and the U.S. Small Business Administration have recently formed a multi-pronged collaboration to promote entrepreneurship as a career option for older Americans. The aim of the joint effort is to link 100,000 Americans over age 50 with small business development resources, including workshops, conferences and mentoring programs.
To learn more about this mushrooming world of senior entrepreneurs, I lured the dynamic Elizabeth Isele, co-founder of the non-profit Senior Entrepreneurship Works to sit down with me at the Thornton River Grille in bucolic Sperryville, VA for a breakfast of French toast and coffee on Friday.
Lucky for me, she lives near my country getaway and was free. That doesn't happen too often these days. She's also the founder and Author of www.SavvySeniorsWork.com and a Senior Innovation Fellow at Babson College and leads workshops for adults aged 40-85, who are either exploring the possibility of creating their own businesses, or are actively in the process of launching their own businesses.
Elizabeth is clearly on to something. Little wonder she's been making regular visits to The White House recently to discuss ways to foster senior entrepreneurship as an economic catalyst and find ways to change policies to support seniors new business start-ups.
KH: Tell me about the nonprofit you co-founded, Senior Entrepreneurship Works. What's the focus?
EI: It's designed to help seniors aged 50+ build sustainable businesses, and create jobs. The focus is on seniors who are living another 20 to 30 years and cannot underwrite those years financially. The original premise was we'll just continue working longer.
That was why I launched SavvySeniorsWork.com three years ago. But then, with the recession those jobs were cut back or just eliminated. No matter how well prepared seniors were to make the transition to stay employed longer, the jobs weren't there. So we help people think about the options. We would like to get 45-to-50 year old thinking proactively about what they're going to do. Our training programs are based on how someone can start his or her own business, and help them ask first if should they, and, if yes, help them create a value proposition and figure out how best to make it happen.
KH: What's the biggest obstacle to getting started?
EI: The biggest obstacle is actually fear of entrepreneurship. We have to think of another word for entrepreneurship. Entrepreneurship is so intimidating, and people think I'm certainly not an entrepreneur. They have no concept of however they've lived their lives at home and in the workplace often involves very entrepreneurial thinking.
KH: If I am thinking of starting a business, what should I be focusing on?
EI: Do you really understand what it takes to be an entrepreneur? We all think entrepreneurially. But that doesn't necessarily mean you can start your own business. So how do you translate what you've done entrepreneurially in your life to starting your own business?
Do you understand what the financial risk is? What are the emotional risks of starting your own business?
You need to do serious research and make sure that this is a viable option for you, and you're not just grabbing at straws thinking well I'll start my own business, so I don't have to ever worry about getting a job again.
For a senior, who has been dreaming about starting a business, sometimes it can be more of a dream fulfillment and that can be a problem. They're focused on the dream fulfillment, rather than identifying the customers for their dream business. That's absolutely key. Is there a customer for this business, or is it just something your dreaming about and think will be spectacular?
KH: In the pre-assessment, what questions should you ask?
EI: You've got to get down to reality:
- What is your financial security? You should have a year's worth of living expenses.
- How much of your income or asset base can you risk starting a business?"
- What is your credit? Do you have enough credit to ask for capitalization?
- What are your family responsibilities?
- Are you willing to dedicate 90 percent of your days to getting a business up and running? This is the rest of your life. Not something to do until you retire.
- Do you have a grip of the legal ramifications of starting a business?
- Do you have the skills? You have to have certain financial skills. You definitely have to have communications skills, marketing, and research skills. Boom, boom, boom. Do you have those?
KH: What if you have some, but not all of those skills?
EI: We encourage seniors who are thinking of starting their own businesses to volunteer as mentors in business incubators and accelerators with young people who are starting their own businesses. What we have found is first it separates the wheat from the chaff, and they think 'oh my gosh I certainly don't want to do this'. Other times, they find that they can kind of inch their way in. They can invest in their mentee's company, so they have an equity stake, or they can use their experience in the accelerator to help them build the skills they will need to carry out their own dream.
KH: What surprises you about the emergence of senior entrepreneurs today?
EI: What has been really startling is that 75-80 percent of my time is educating lending institutions and educating the government about the value of this group of entrepreneurs as a real economic engine and driver in the economy. A new change is happening amongst the lending institutions- commercial banks, private banks, and public credit unions are beginning to identify this as a new opportunity. They're starting to see senior entrepreneurs as a market niche and beginning to evaluate and assess a person coming to get that loan-the human capital the person brings to the bank specifically, not only their financial credibility. These entrepreneurs are bringing their lifetime work experience skills to the table, whereas a very young entrepreneur doesn't have that treasure chest of 30-to-40 years of experience.
KH: What qualities does an entrepreneur need to succeed?
EI: Perseverance, creativity, and resilience. Resiliency is one that's often overlooked. One of the biggest challenges is someone will get an idea in their head and drive it into the ground and not be resilient enough to know when to drop it, or when to pivot and change the focus of the business.
KH: What are the hottest trends in senior entrepreneurship?
EI: Many seniors are creating legacy businesses, which will, in turn, be handed over to a younger member of their family-someone in their 20s or 30s. They've been having trouble finding jobs, too. The younger generation has all the technical savvy, all the social media and marketing skills that the senior in that family may not have. But the senior has all the life experience and work experience skills that the younger person doesn't have. They each have their dreams, and they recognize the value of the other generation to help them fulfill their dreams.
Secondly, they're thinking about their purpose. For many people, they've focused on making money their entire lives and now, although they need to make money, they have a little more flexibility. People at this age really want to create a business that has some kind of social impact on their community, if not the world.
KH: Thanks, Elizabeth!