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Even though they're nearing retirement age, a large number of baby boomers are looking for an "encore" career as entrepreneurs.
Adults over the age of 50 comprise one of the fastest-growing groups of entrepreneurs in the United States, according to a new Gallup study. Among those people who don't currently own a business, baby boomers are twice as likely as millennials to say they plan to start a business in the next year.
The majority of those prospective entrepreneurs cite a desire for lifestyle changes as the reason behind their desire to launch a new venture in the later stages of their careers. Specifically, 32 percent of the baby boomers surveyed said they are choosing to start businesses primarily because doing so will allow them to be independent, while 27 percent say it will give them a chance to pursue their interests and passions.
Money is also playing a large role for many. Nearly one-quarter of those surveyed said starting a new business will allow them to increase their income.
"Very few are pursuing an idea for a new product or service that solves a problem or meets an unfulfilled need in the market — the type of business that would typically have immense growth potential," the study's authors wrote. "Perhaps for boomer entrepreneurs, these reasons reflect their current stage in life."
Even though many baby boomers have years of experience working for established organizations, business owners over the age of 50 face many of the same challenges young entrepreneurs face. More than half of those surveyed said information relevant to growing a business and entrepreneurial training and education aren't readily available in their communities. Additionally, just 44 percent said that the city or area where they reside is a good place to live for entrepreneurs forming new businesses, while just 9 percent said it's easy for them to obtain a business loan where they live.
The researchers said that communities looking to foster entrepreneurial growth among baby boomers should focus on several key areas, including:
- Readiness for the role: It's critical communities help entrepreneurial-minded baby boomers understand that running a business is very different than working for a company. Unlike working for someone else, business owners have to deal with ambiguity, uncertainty and failure, the study's authors say.
- Local resources: Communities need to help prospective entrepreneurs connect with local resources, like the AARP, Small Business Administration and professional networks, that can help them plan their business.
Good coaching: Despite their years of professional experience, entrepreneurs over the age of 50 can still benefit from working with others who can provide counseling and support, such as coaches, mentors and business advisors. The study's authors said readily available coaching and mentoring programs should be an essential part of any community trying to develop business leaders.
The researchers said that addressing these challenges and building up the support that is available will not only benefit current baby boomer entrepreneurs, but also help convince those who might be considering starting their own businesses.
"Supporting those over 50 who want to launch and grow businesses is crucial for reversing the trend of American business deaths outnumbering business births, and accelerating sustainable economic development," the study's authors wrote.
The study was based on interviews with 1,906 baby boomers, consisting of 229 entrepreneurs and 1,677 nonentrepreneurs.
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