Entrepreneurship’s Shifting Landscape
Entrepreneurship is not simply a young person’s game anymore. Older Americans are now, more than ever, finding themselves out of the mundane 9 to 5 and in on entrepreneurial adventures. For the baby boomers with a business plan there are many ways to get started and many resources to utilize. Forbes recently published an article explaining the shifting landscape of starting your own business and highlights the population that inhabits it.
In 1996 only 14.3% of entrepreneurs were classified in the 55 to 64 years of age demographic. In 2013, the mark has shifted to 23.4% and Kauffman research director Dane Stangler believes an entrepreneurship boom is coming soon and it won’t be in spite of the older crowd but will be fueled by it.
While the stereotype of an entrepreneur these days is an up-and-coming young tech genius, that isn’t exactly the full story. Many of the new businesses in the United States are not creating the latest application for a smartphone but mom and pop shops with individuals who are following their dreams or making a career change. With representation of the older entrepreneur crowd growing, the country could see a boom in successful startups lasting longer than three years. In fact, businesses started by individuals 50 or over lasted over three years 70% of the time in 2013. In contrast, only 28% of those younger 50 made the mark.
Largely, the main challenge to entrepreneurs who start later in life face the challenge of recouping their upfront investment in less time than the younger crowd. Older entrepreneurs also can’t afford to lose money and need to have specific funding sources that can help them gain their startup cost back. Edward Rogoff, a professor at the City University for New York’s Baruch College states that individuals over 50 can’t be diving a lot of their personal wealth into a venture and expect that they are going to have enough time to recoup the money and afford retirement. Rogoff mentions that for older entrepreneurs it is important to field test their product or service on a smaller scale before fully committing. Investments from friends and family who believe in the product will also help minimize the risk for these individuals as well. Or, exploring crowd funding sources like kickstarter.com could really help ease the negative impact in the long term should the venture prove unsuccessful.
In the long run, older entrepreneurs have to calculate their ideas on a more narrow scale. With less room to fail. Research, testing and data collection is important to changing a dream or passion into a successful business.