A tough job market – and the low start-up costs for Internet-based businesses – is leading more seniors to form small businesses, according to the Associated Press.
One example is Crash Boom Bam, a company started by 64-year-old Jim Glay. The vintage drum company started in Glay’s spare bedroom in 2009. While it hasn’t made Glay a fortune, the company has kept him “afloat,” he told the Associated Press.
“You would send out a stack of 50 resumes and not hear anything,” Glay, who had been laid off from a sales job, told the news agency. “This has saved me.”
The U.S. Bureau of Labor Statistics (BLS) has data indicating that the largest number of self-employed workers are over the age of 65.
A recent report on entrepreneurial activity from the Marion Kauffman Foundation found that the share of new entrepreneurs between 55 and 64 grew from 14.3% in 1996 to 23.4% in 2012. Meanwhile, entrepreneurial activity from younger age groups fell.
Some of this activity, according to the Associated Press, is a result of the overall aging of the country. But those with Marion Kauffman said the older people are starting businesses due to the ease of doing so with modern technology, as well as a job market that has stayed tough even as the economy has improved.
A recent poll by the Associated Press found that 82% of workers 50 and older say it is at least somewhat likely they will continue to work for pay when they reach retirement age, which is now officially 65.
Dane Stangler, a research and policy director at Kauffman, said technology has made it easier and that older people are staying active longer in the workforce. “We’ll see continued higher rates of entrepreneurship because of these demographic trends,” Stangler told the Associated Press.
Some also do it for love of a certain business.
Paul Giannone opened a pizza restaurant in Brooklyn in 2010. Now 60, Gianonne told the Associated Press the risk (he had to take a second mortgage out on his home to finance the venture) has been worth it. Not only is he doing something he enjoys, but the restaurant is so popular he plans to open a second location.
Giannone formerly worked in information technology. He told the Associated Press, “I wanted to do something that I could be proud of. I am the only one who makes decisions and I love that. I haven’t worked in 3 1/2 years, that’s how it feels.”
Some opt for a more gradual transition.
Santa Clara University professor Mary Furlong holds seminars that focus on business start-ups and are aimed at Baby Boomers. While older business owners have talent honed by years of experience, some lack the technological skills needed to make a successful Internet business.
Furlong said many who start businesses later in life do so as a follow-up to a successful career from which they fear a layoff or have endured one.
Furlong said older workers often start small businesses out of fear they will be laid off – or after having endured a lay off.
She told the Associated Press:
“The boomers are looking to entrepreneurship as a Plan B.”
