By: William K Zinke
Founder & President of the Center for Productive Longevity
All readers may be familiar with ESP–extrasensory perception. I propose that we focus on EESP–experience, expertise, seasoned judgment and proven performance. This is what Baby Boomers can provide versus their younger counterparts. I like the old saying: “Good judgment comes from experience, and experience comes from bad judgment.”
Quoting from the Kauffman Index of Entrepreneurial Activity for 1996-2010, written by Robert W. Fairlie in March 2011: 26% of entrepreneurial activity was produced by people ages 20-34 versus 39% produced by people ages 55-64. My view is that the disparity will not only be maintained but will increase because we have an aging and shrinking workforce.
More than five million Americans ages 55 and older (55+) have their own businesses or are self-employed, according to the Small Business Administration (SBA), indicating an increased interest in entrepreneurship opportunities. And the SBA reports that the number of self-employed people ages 55 to 64 is soaring, climbing 52% from 2000 to 2007. Here are some of the reasons why people are changing careers at 55, particularly at a time when unemployment is high and jobs are scarce:
- After years of working for others, acting in accordance with established policies and procedures, experienced workers are creating their own business, enabling them to “march to their own drummer.”
- Many people 55+ are attracted by the opportunity to create a business that is responsive to their own unique needs, interests, and desires.
- The need for additional income to maintain a standard of living or the desire to have additional income for discretionary spending
- The desire for continued interesting/stimulating/challenging work to maintain cognitive skills and abilities
- The desire to maintain self-esteem and self-fulfillment by continuing in productive activities that add value
- The desire to maintain relationships with the outside world and to remain socially connected
- Recognition that, with knowledge of their increased longevity and vulnerability of their financial resources through market fluctuations, it may be necessary or desirable to generate additional income
Let’s talk about the biggest driving force–the impact of demographic change in America. When the Social Security Act was passed in 1935, few people lived past the established retirement age of 65. The reality is that almost 30 years were added to longevity from beginning to end of the 20th Century. People are not only living longer but in substantially better health. This, of course, depends upon three essential tenets: remaining intellectually engaged, socially connected and physically fit. According to a recent study conducted by the Harvard School of Public Health, those who are committed to these tenets enjoy better health, report a greater satisfaction with life, and live at least four years longer than those who don’t.
With so many more years to live than people expected when younger, sitting on the sidelines with nothing to do for another 20-30 years doesn’t look so attractive. Another factor is that we have moved in the U.S. from an industrial to a knowledge-based society, with more than 80% of the private, non-farm sector in knowledge-based services and only about 11% in manufacturing.
We still tend to think about the traditional two stages of adulthood: early adulthood from 18 to 40 and mature adulthood from 40 to 62 or 65. Then, the traditional thinking goes, you are out of the game and the headlights are getting dim. But the reality is that, with the advent of demographic change and people living appreciably longer lives in better health, there is a new and third stage of adulthood from 62-85. And people are increasingly working into their latter 80s, 90s and even beyond.
Because we are still recovering from the global economic crisis, most companies have not yet begun to recognize that they will shortly be facing skills shortages. And there is another problem. Because of a shrinking number of younger people coming into the workforce, they will be in even greater demand and will be changing jobs more rapidly. In 2010, the average job tenure for workers 20-35 was 2.3 years versus 9.9 years for older workers 50-65. With the 78 million Baby Boomers reaching 65 in 2011 and each year thereafter through 2029 at the rate of 4.2 million per year, companies will be facing serious skills shortages unless they begin to utilize this large and growing talent pool of people with EESP.
Meanwhile, with unemployment slated to remain above 8% and economic growth low for the foreseeable future, there is one bright spot for retired workers on a gloomy employment horizon–the entrepreneurial path. Through a non-profit organized by my firm in 2006, the Center for Productive Longevity (CPL), we are substantially involved in organizing four meetings in 2012, the first of which was held on March 27 at the Kauffman Foundation in Kansas City. Other sponsors were AARP and the National Association for Community College Entrepreneurship (NACCE). The title for all four events is “Spotlight on Entrepreneurial Opportunities for Baby Boomers.”
Our goal was to attract 100 Baby Boomers 50+ for this event (reduced from 55+ because AARP was a sponsor and this is their threshold membership age) for which there was no charge. When I left for a quick trip on February 8, we had attracted 50 participants. When I returned to the office on February 13, the number had climbed to 141 and we promptly closed registrations. We actually had 130 participants at the meeting, including 20 spouses, and there was a waiting list of more than 35. This provides you with some idea about the growing wave of interest in Baby Boomer entrepreneurship.
We anticipate the same or a greater degree of interest in the major metro areas for the next three meetings:
- Babson College in Wellesley, MA (near Boston) on September 14
- Kellogg School of Management/Northwestern University in Chicago on October 11
- University of Denver on November 15
We have carefully selected academic institutions with a major focus on entrepreneurship because they are training the entrepreneurs of tomorrow, and I believe we will see substantially larger numbers of older entrepreneurs as we move away from the more traditional forms of employment. After all, new-business creation has been the backbone of the American economy since Paul Revere, with his own silversmith company, went on his famous ride to warn that the British were coming.
Back to thinking about becoming an entrepreneur, here are the factors that need to be considered:
- Risks and rewards
- Strategies for identifying and selecting potential business opportunities
- Desirability of taking skills and aptitude tests to ascertain your professional and personal strengths
- Importance of developing a business plan or at least a business concept statement
- How to evaluate a business plan or concept statement
- Creation of a personal vision
- Exploration of funding support
- How to overcome fears and concerns/real and artificial barriers
- Importance of conducting research on the competition
- Importance of developing an Advisory Board or Planning Committee to meet several times a year to provide counsel and guidance on your new venture
Finally, another acronym I like is the three Ps: passion, purpose and perseverance. These are critical qualities in pursuing the entrepreneurial path, and I would add a few others:
- Courage/willingness to take risks
- Positive attitude and optimistic spirit
- Strength of character/integrity
- Vision/ability to see things as they might be
- Self-confidence and assurance
- High energy level
- Resourceful and resilient
- Ability to accept rejection and turn failures into learning opportunities
You won’t need all of these qualities for changing careers at 55, but it would be desirable to have many of them. Having created my own consulting firm more than 40 years ago and found it to be a great way to go, I have one more quote: “You don’t stop having fun when you grow older. You grow older when you stop having fun.” Good luck and godspeed for the growing number of senior entrepreneurs!
Note: I have three books for suggested reading:
- Barreto, Hector V., The Engine of America: The Secrets to Small Business Success from Entrepreneurs Who Have Made It! Hoboken: John Wiley & Sons, Inc., 2007.
- Price, Robert W., Roadmap to Entrepreneurial Success: Powerful Strategies for Building a High-Profit Business. New York: AMACOM, 2004.
- Murphy, Bill Jr., The Intelligent Entrepreneur: How Three Harvard Business School Graduates Learned the 10 Rules of Successful Entrepreneurship. New York: Henry Holt and Company, LLC, 2010
