Today's print edition of USA Today highlights the growing community of encore entrepreneurs —or what they call "silver entrepreneurs."
The article cites a variety of reasons why last year nearly one-in-four of all business startups were by men and women 55 to 64. That's up from 14% in 1996.
Some of the most common reasons for this growth include the following:
- Life expectancy has been extended to the point that many who retire in their early or mid-sixties have 20 years of productivity left and are looking for something meaningful to do with those years.
- The laid-back pace of retirement becomes boring to people whose careers have accustomed them to days filled with challenges and initiatives that are energizing to them.
- Increasingly people do not want to retire suddenly, but instead to cut back on the hours that they put into their jobs so that they phase in retirement. Those whose careers or employers are not receptive to this type of adjusted work schedule are choosing to have this option by starting a business.
- And of course, financial necessity always looms large in the decision to start a business later in life. Older workers who find themselves with inadequate retirement assets, or who fear that their assets may not be sufficient to sustain them through any future periods of inflation, choose to start a business to add to their nest egg.
Not mentioned in the article is another reason for becoming an encore entrepreneur, a reason which I encounter quite often among those whom I coach and advise. Namely, they've always dreamed of having their own business. But various considerations forced them to postpone their entrepreneurial ambitions earlier in life.
Commonly they have postponed their first startup to have the security and predictable income of a corporate job until their children were grown and educated. Others have made the same choice out of a need to support aging parents financially.
USA Today points out that encore entrepreneurs have a far-ranging set of options in determining what sort of business to start. One proven strategy is to offer a unique service which blends skills and experience derived from prior career stops and hobbies. The piece offers the example of a woman who loved physical fitness and loved working with dogs, so she created a physical fitness program that allows dogs and their owners to work out together.
Perhaps the most salient advice in the article relates to finance your startup. When launching a business, the temptation always presents itself to tap into retirement assets to fund the new enterprise. In general, this is not a wise direction to choose. The success of a startup is by no means assured. Thus, putting retirement funds at risk is unwise for older entrepreneurs, since they have so few years to rebuild retirement balances that might be lost in a failed business.