Baby Boomers Starting Small Businesses Instead of Retiring
Updated on Jul 29 2019
It’s no secret that the Baby Boomer generation is like no other generation before. Throughout their lives, they have revolutionized societal norms, challenged what it means to age, and now, they are challenging what it means to retire. Today’s baby boomers are not slowing down. In fact, many are using their retirement to start small businesses. Learn more about baby boomer business trends.
Baby Boomers Leading in Entrepreneurship
A recent survey from Guidant Financial entitled the 2019 Small Business Trends for Baby Boomers found that 57 percent of small business owners are boomers. The survey, which was conducted by small business financing company Guidant Financial and online credit marketplace LendingClub Corporation, included more than 2,700 current and aspiring small business owners across the country.
The survey found that one-third of all small business owners are between 50 and 59 years old, 17 percent are 60 to 60 years old, and a remarkable 4 percent are 70 or older. Industries driving baby boomer startups include business services, food/restaurant business, general retail, health/fitness, and automotive.
For many boomers, it’s not about the money. In fact, boomers reported their motivations for opening their own business was more personal. They were ready to be their own boss, wanted to pursue a personal passion, seized an opportunity, were dissatisfied with corporate America, or were simply not ready to retire. And, for the most part, they are happy they did. 35% of small business baby boomer owners reported being a 10 (the highest level) on a happiness scale.
51 percent of boomer-owned small businesses have been operating for at least eight years. Because of this, and other factors, boomer small businesses created more jobs than millennial-owned businesses this year. 69 percent of boomer-owned businesses employ at least two employees, compared to 60 percent of millennial-owned businesses.
Baby Boomer Owners are Overcoming Challenges
A high percentage (71 percent) of Boomer-owned businesses are profitable with boomer-owned businesses accounting for $5.14 trillion in sales. However, running a small business is not without it’s trials, even for experienced boomers.
“Baby boomers still represent a majority of people we encounter pursuing franchise opportunities,” said David Nilssen, CEO of Guidant Financial. “These are hardworking people who have spent 20+ years in corporate America leading teams, departments, and business units – and are now ready to put that experience to work in their own small business.”
According to the survey, the most challenging aspect of running a business is lack of capital or cash flow. For younger businesses, marketing and advertising can be problematic. Boomer-owned businesses that have been operating for at least eight years say that recruiting and retaining employees is a major challenge along with managing their time.
Ultimately, having a plan for retirement that sets a foundation of financial security can help overcome these challenges. An organized and comprehensive financial plan can allow you the financial freedom to pursue your passion in retirement, as your own boss, on your own time. Contact a trusted, fiduciary financial advisor to help you develop a comprehensive financial strategy to make your retirement goals a reality. Many baby boomers are starting businesses because this allows them income in the last third of their life.
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