“We can definitely see there’s been more of a shift towards older entrepreneurs,” says Lauren Aleshire, senior communications manager at the Kauffman Foundation. “A lot of it is the instability that has likely come from the pandemic and the changes it’s caused in the workplace. There’s an opportunity for people to now pursue something different that was maybe always at the back of their minds.”
Older adults are also increasingly concerned about their financial security, especially as costs have been rising. “People see what’s happening to their 401(k) or their retirement savings,” Teitzel says, and want a little extra money coming in.
But older entrepreneurs also may have financial advantages their younger counterparts don’t, says Suzanne Bergmeister, executive director of the Gilliam Center for Entrepreneurship at James Madison University. Social Security retirement benefits and pension payments give older people who start small businesses money they can rely on while they’re waiting for the business to take off.
“You have a retirement income coming in, so it’s not quite as risky to make the entrepreneurial leap,” says Bergmeister.
That doesn’t mean there’s no risk. Seventy-four percent of new business owners invest their personal savings, a SCORE survey found. Nearly a quarter dip into their retirement funds. More than a third rack up credit-card debt. And nearly one in five of those startups fail in the first year, according to the Kauffman Foundation.
“What we’ve seen is a lot of people who have said, ‘I’m going to go do this,’ without thinking about what the business plan should be and how much time it will take to be successful,” says Sherman. “You need to start [a business] you have some sort of knowledge or experience with. And then you have to have the energy, the willingness and the financial ability to keep that business going for at least a year.”
Organizations can offer resources and support
SCORE is among the resources that can help, with free mentoring and advice. Other nonprofits, government agencies and even banks offer guidance too, usually without charge. The US Small Business Administration, which has small business development centers in every state, provides step-by-step instruction online and offers free online courses and podcasts — including, with the Federal Deposit Insurance Corporation, a program called Money Smart about the finances of starting and managing a business. Other support for over-55 entrepreneurs is available from the Small Business Resource Center for the 50+ and AARP Foundation.
Teitzel turned for help to GetSetUp, a social learning platform for older adults that covers many topics and is mostly free to users, thanks to subsidies from states, health care companies, Medicare Advantage plans and other benefactors.
In its two years in operation, GetSetUp has found surprising demand for information about entrepreneurship, cofounder Lawrence Kosick says. Nearly 400 people age 55 and older entered its first-ever virtual startup accelerator program in June, a Shark Tank-style competition to pitch new business ideas. The five winners got $2,500 apiece in seed funding.
“If you think about what older adults are most interested in, we realized that in addition to their health and wellness, financial security was becoming a more important consideration,” Kosick says. “We really do see a significant trend toward anything around augmenting their current skills — how to write a business plan, how to use Excel — so they could either grow a company they already run or start a new business.”