Source: Australian Bureau of Statistics.
Entrepreneurs over 50 have many advantages. They are smart: more of them are tertiary educated with half (49.1 per cent) holding a degree or diploma, up from 33 per cent in 2002 and much higher than the total population at 38 per cent.
They have decades of experience, deep networks, are highly skilled and have access to finance including superannuation and equity in their homes.
That is an extraordinary shift. And I was reminded of this last week when I turned up at an entrepreneur function in Melbourne run by a group with the delightful name: “School of Hard Knocks” and found the audience neatly divided between those who were north and south of 50.
Ten years ago at a similar function there would have been a smattering of people over 50 and I would have been pitching my speech at a youngish audience of entrepreneurs, aged between 25 to 45. Now 60 year old entrepreneurs are asking about international expansion.
What’s changed? For a start, the idea of retiring at 50 is going out the window.
Continual messages coming from government urging people to work as long as possible to avoid a huge dive in productivity due to lower birth rates and rising pension and health costs are having an impact. Ten years ago in Australia no government would have dared discuss moving the retirement age to 70.
And it’s not all falling on deaf ears. Many well-educated baby boomers have hit their 50s and 60s in rude health and expect to live well into their 80s and 90s. ABS data shows that only 13 per cent of the Australian workforce plans to retire by 60. Patricia Edger, ambassador for National Ageing Research Institute, pointed out recently that those who say they will never retire have gone from 384,000 to 575,000. And it’s not just about a poor financial outlook. “Able-bodied people don’t want to sit around for what is shaping up to be the longest stage of their life without contributing,” she says.
Women in particular who have taken time out to raise families suddenly find a new lease of life at 50 as their kids require less focus. With technology at their fingertips and in the cloud, working from their spacious homes or inner city serviced offices, they embark on a third career.
Many of the 50 plus entrepreneurs are not just starting new businesses; they have been running successful businesses for years and either don’t want to sell, can’t find a buyer and would rather stay at the helm than shut the doors.
And it’s not that the over 50s lack inspiration. Rich lists around the world are now made up of entrepreneurs in their 70s and 80s still playing a very active role in their businesses which wasn’t the case several decades ago.
But many marketers, financiers and service providers ignore the older entrepreneur, who can face the same discrimination as older workers who are hit with the aging stereotype.
Older entrepreneurs report being treated as if they lack ambition, can’t keep up, may fall sick and lack technological skills to understand the modern world.
Financiers can be reluctant to back them because of a perception they are not in business for the long haul. Yet a 52 year old could be successfully running a business for the next 20 or 30 years.
One entrepreneur says he was asked what his kids thought of him starting a business at 55 with the implication being that he was squandering their inheritance.
What is far more important than age is mindset. Roy Morgan research shows that if you look at the over 50s generally, they are disproportionally represented among the visible achievement and socially aware categories which in a nutshell sums up the entrepreneurial mindset.
What’s really interesting is that as people get older, they actually become more entrepreneurial, says psychologist Colin Benjamin, co-creator of the Morgan Values Segments and who has a doctorate in entrepreneurship from Melbourne-based Swinburne University. Over 50s have a growing willingness to take risk in return for reward.
It’s not because they are more confident – in fact confidence starts falling from age 35 onwards. Benjamin says it is because they have access to finance and the experience to make a business work. That can make the over 50s a very good prospects to back because they don’t take unnecessary risks due to over confidence and inflated egos, the undoing of many an entrepreneur.
There is another crucial difference: older entrepreneurs are more likely to be opportunity entrepreneurs, starting a business because they see a niche rather than necessity entrepreneurs who are often creating a job for themselves. And as GEM research (GEM) research shows, opportunity entrepreneurs have much greater success rates than necessity entrepreneurs.
In fact we are likely to see more over 50s entrepreneurs running and starting businesses. Given the big structural shifts occurring in many industries, there will be impetus to drive the growth of both opportunistic and necessity entrepreneurs: the latter driven by industries retrenching and sacking their older workers who then face age discrimination when seeking further work.
There is big opportunity for advisers, financiers, marketers and the service industry in general to focus on the older entrepreneur as a market worth their attention. The ambitious older entrepreneur is more likely to value external expertise, pay for advice and services in order to build scale. As success stories multiply, there will be more role models to encourage others to take the plunge. So anyone dealing with a 50 plus entrepreneur would be wise to look past the stereotypes and formulas to see the mindset and the prospect – just like you would anyone else.