Older North Americans are becoming Entrepreneurs whereas the number of younger generations are reducing.
Self-employment rates by age group created from Bureau of Labor Statistics data in 2009, incorporated and unincorporated companies.
If you want to find America’s entrepreneurs, should you be searching places frequented by senior citizens? The answer, from several data sources, appears to be a resounding yes.
Seniors are more likely than young people to own and operate their own businesses. Contrary to the popular perception that entrepreneurship is a young persons game.
In a June 2009 report by Dane Stangler of the Ewing Marion Kauffman Foundation: In every single year from 1996 to 2007, Americans between the ages of 55 and 64 had a higher rate of entrepreneurial activity than those aged 20 to 34.
The 2008 U.S. Global Entrepreneurship Monitor report, shows that the rate of entrepreneurial activity rose among American seniors but fell among younger ones. Over 2007 and 2008, both the total rate of entrepreneurial activity (which combines people actively planning to start businesses and those owning operating businesses less than 42 months old) and the rate of ownership of established businesses (those more than 42 months old) indicated a decline of 8% to 9% for the 18-to-44 age segments and an equal increase in groups aged 45 to 99.
Over 75’s have the highest rate of unincorporated self-employment of any age group, a rate 7.5 times greater than for people aged 20 to 24 and 4 times greater than for people 25 to 34.
For tax and benefits reasons, many people who are self-employed may be independent contractors, older people may be more common than younger ones to be employed this way. Data shows that incorporated self-employment peaks in the 65-to-69 age group, those just past retirement age being more likely to be self-employed leads incorporated businesses than members of any age group under 65. Facts, show the incorporated self-employment rate is 4 times greater among those aged 65 to 69 than those aged 25 to 34-and an amazing 25 times greater than those aged 20 to 24.
Unincorporated self-employment over the past year among those over 65 has experienced growth (an increase of 11.1%), but reduction in the number of unincorporated self-employed of those 16 to 64 (a drop of 5.4%). Amongst those 65 to 69 (Omitting those over 70) the number of unincorporated self-employed increased 15.1% from 2008 to 2009.
Incorporated self-employment saw a 4% increase in the number of incorporated self-employed among those 55 to 64 the changes are unclear. For incorporated self-employment, dividing the population at age 55 instead of 65 shows an 8.4% drop of those aged 16 to 54 and an increase of 1.7% those aged at least 55 from 2008 to 2009.
It might be a group effect. People who entered the work force in the 1960s might be more entrepreneurial than people born more recently.This might be an age effect. Seniors might be more likely to go into business for themselves because they have developed the industry and work experience that research shows enhance entrepreneurial performance. Data does not tell us why entrepreneurial activity is greater and increasing among North American seniors.
What are the implications of the aging of the self-employed? There are probably many, but here are a few.
* Older entrepreneurs seek the flexibility of running their businesses on a part-time basis therefore it is becoming more common among senior entrepreneurs who seek part-time self-employment than among younger people.
* Self-employment is seen as a second career as older North Americans retire or leave jobs to start their own businesses.
* Using savings to self-finance their entrepreneurial ventures is becoming more common with the older self-employed.
It could be a daunting prospect for many seniors to embark upon a new business venture, which for many would be uncharted territory. Some senior entrepreneurs may be tempted to buy a franchised business. The idea is a good one in principle, yet to do so could open up a whole new set of issues, namely time and money. Many franchise businesses will require significant start up dollars as well as ongoing monthly and yearly royalties or fees. Mull over the options carefully before parting with your hard earned retirement dollars.
I fall into the over 60’s age category myself and have recently embarked on a new business venture with a group of ambitious savvy business associates who offer the support and guidance which I need to achieve my goals.
Want to find out more about business, then visit Mac Stone’s site on how to choose the best business alternatives jeff learner for your needs.
categories: Entrepreneur,Entrepreneurial,Franchise,Business,Retirement,Seniors
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