Young self-employed workers are doing some pretty remarkable things. According to Upwork’s “Freelancing in America: 2017” study, 46 percent of Generation Z workers (roughly speaking, those born in 1996 or later) freelanced last year. And not only is this demographic of young freelancers expanding, they are transforming the way we think about and discuss topics like education, working remotely, and technology. To top it all off, young entrepreneurs are revealing another interesting phenomenon in how they spend their time.
Being a solopreneur means every job within the business falls on your plate, from hiring contractors to driving leads to then nurture into customers.
As you adapt to the various roles you have to play as a business owner, keep these tips and insights in mind.
Navigating the experience will be challenging but watching your business grow is well worth it.
Baby boomers are no longer the largest American generation. But they’re still one of the strongest, armed with skills and experience to help them live fully.
One area where older Americans are thriving? Small business!
In 1996, people 55 to 64 made up less than 15 percent of new entrepreneurs. In 2016, that same age group made up 25 percent of new entrepreneurs, according to a study by the Kauffman Foundation.
We call them encore entrepreneurs. Many are starting businesses for the first time as they near retirement age. Some are already retired, but seek a new path to help them feel reinvigorated in their older years.
It’s the ultimate example of age being just a number.
Consider Ryders Public Safety. Two law-enforcement officers nearing retirement started this shop to serve the Denver, Colorado area because they knew they could serve security industry customers better than current offerings. One of the owners’ wives has joined the team to support the shop as it expands into ecommerce.
Meanwhile, Laurie Brown pivoted from her 30-year career in corporate management to a gift-basket delivery service. Her business idea meshed with her passion for helping people with special needs, who create and fill baskets as a part of their job-skills training.
These are just two examples of seasoned professionals taking an idea and turning it into an encore career as an entrepreneur.
Want to get started in your own encore business? Start by doing the following:
1. Find your “why”
Before embarking on a business journey in your 50s, 60s, or beyond, consider your reasons for doing so. Is it a method of ensuring financial stability? Is it a way to make extra money while practicing a skill you value?
There’s no wrong answer, but knowing your “why” will undoubtedly help guide you as you prepare to pursue your small business idea. You’ll be able to right-size your business to your goals.
2. Go lean
Too much planning can stall even the brightest of business ideas. If you’re balking at the idea of writing a business plan from scratch, consider a lean startup plan.
Methods like the Business Model Canvas and Lean Canvas model can help you test the viability of your business idea on a brief worksheet rather than a lengthy plan. You can even take your business model canvas with you to initial financing discussions to help illustrate your business idea and your plans.
If you decide to move forward with your idea and write a full business plan, your one-page worksheet will help you get started.
Some SCORE chapters host in-person events about lean business planning; you can also view a free recorded webinar that walks you through the process online.
3. Plan for contingencies
Emergencies can happen to any business owner, but health can be a special consideration for older business owners. Make plans to take care of yourself as you launch your business with a solid work-life balance.
Just as you strategize for business success, you’ll also plan for your own longevity in your business — whether that means keeping a schedule that works for you, or hiring staff who can keep your business humming if you need to take a break.
4. Work with a mentor
A mentor may bring to mind an image of an older person, experienced and wise.
Guess what? That might be you!
But you still need someone to guide your new small business. You may find that your perfect mentoring is the same age as you. Or, they might be half your age.
Go into your mentoring relationship with an open mind. Regardless of age, a mentor will challenge you to think strategically while cheering you on along the way. Remember that small business expertise comes in many forms!
Are you ready to become an encore entrepreneur? Meet with a SCORE mentor to get started.
About the Author(s)
At an age when you might expect their thoughts to be turning toward retirement, Americans age 50 and up are far from slowing down. Instead, as the growing number of entrepreneurs over 50 shows, they’re embracing business ownership eagerly.
That’s the conclusion of the State of Small Business, a survey of over 2,600 entrepreneurs and small business owners recently published by Guidant Financial. (Although the survey referred to people over 50 as baby boomers, the boomers are currently age 54 to 72, so that term isn’t quite accurate.)
Entrepreneurs over 50 are harnessing their sizable professional networks, decades of experience and financial assets to start and grow their businesses. Instead of winding down, they’re just getting started.
Here’s a closer look at these older entrepreneurs.
Meet the entrepreneurs over 50
This is not a small cohort, by any means. More than half (54%) of America's small business owners are over 50. Specifically, 33% of U.S. small business owners are between 50 and 59 years old; 17% are 60 to 69 years old; and 4% are 70 and up. Men account for three-fourths of small business owners over 50.
The most popular states for business owners age 50 and up are:
- New York
- North Carolina
What industries attract over-50 business owners? The most popular industries are business services, food and restaurant businesses, retail businesses, health and fitness businesses, and automotive businesses.
Pursuing their passions
After the Great Recession, conventional wisdom had it that people 50 and older who got laid off would start businesses out of necessity. However, Guidant reports this is no longer the case. The majority (42%) of entrepreneurs over 50 say they launched their businesses because they wanted to pursue their passion.
In addition, 36% started a business because “the opportunity presented itself,” and 22% did so because they were unhappy working in corporate America. People who started businesses after losing their jobs accounted for just 15% of entrepreneurs over 50.
Most of the older entrepreneurs Guidant surveyed don’t have huge businesses. Almost one-third are solopreneurs, while 42% have two to five employees; 12% have six to 10 employees.
However, small size isn’t cramping their plans for big growth. Almost two-thirds (64%) of entrepreneurs over age 50 say they plan to expand their current businesses, while only 6% are even thinking about selling them.
Speaking of success, 67% of business owners over 50 report their companies are making a profit. But there are other measures of success: 76% say that on a scale of 1 to 10, their happiness level is 8 or above.
How they did it
About 14% of 50-plus entrepreneurs in the survey got started by buying franchises, while 86% launched or purchased independent businesses. The most popular method of financing their startups was cash, used by more than 50% of the entrepreneurs surveyed. Other popular financing methods included friends and family, getting a business line of credit, and obtaining an unsecured loan.
However, entrepreneurs over 50 also report using their 401(k) plans to finance their businesses. More than one-fourth used this method, which is about twice the national average compared to entrepreneurs overall.
The Rollovers for Business Start-ups (ROBS) business financing option allows people to finance a startup with money from their retirement accounts, such as 401(k) plans or IRAs. Older entrepreneurs are more likely than younger ones to have enough money in their accounts to take advantage of this method.
While business owners who used other types of financing to get started spent an average of $50,000 on their startups, those who used ROBS financing spent between $100,000 and $175,000. This is one situation where being over 50 is an advantage.
Speaking of capital, almost half of entrepreneurs over 50 say if they had extra money, they would invest in expansion. Some 45% would use the money for marketing and advertising, 44% for equipment, 28% for staff and 23% to invest in technology.
Not all of those in the survey were current business owners. The survey also included people age 50 and up who want to start businesses. For these would-be “encore entrepreneurs,” finding financing is the biggest hurdle. Most say they need about $100,000 to start their businesses, and 61% are struggling to find financing.
Part of the problem could be that 46% don't know enough about financing options to get started. In addition, 40% haven't yet identified the right opportunity, 20% aren't sure how to get started and 13% lack a support system.
- Haven’t identified the right opportunity: 40%
- Not sure where to get started: 28%
- Not ready to leave job yet: 14%
- Lack of support system: 13%
Whether your business is expanding or just getting started, if you need a support system, check out SCORE. Their experienced business mentors can help you with everything from writing a business plan and finding financing to marketing your business and hiring employees. No matter how old you are, SCORE can give your business you edge you need to succeed.
ABOUT THE AUTHOR(S)
Rieva is CEO of GrowBiz Media, a content and consulting company specializing in covering small businesses and entrepreneurship and SmallBizDaily.com.
CEO, GrowBiz Media