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Survey: Several Baby Boomers are Launching into Small Businesses

Over-50 Small Business Owners  

Baby boomers are making significant moves in small business sectors. A recent survey shows that rather than worrying about retirement, several baby boomers are actively getting involved in small businesses. The 2018 Small Business Trends for Baby Boomers is a survey of over 2,600 entrepreneurs and small business owners who are 50 years an above.

The study found that retirement isn’t the top concern on the minds of members of this generation. As such, instead of anticipating retirement, the baby boomers are capitalizing on their workplace experience, their professional networks, and their consistent financial status to become run successful businesses.

The study revealed that entrepreneurs who are above 50 years account for over half of the small business owners in America. One out of three of these small business owners fall within the age range of 50-59 years, 17% of them are between 60-69 years, and 4% of them are 70 years or older. The study also revealed that one-fourth of the small business owners over 50 are female, while three-fourths of them are male.

The study also revealed that one-fourth of the small business owners over 50 are female, while three-fourths of them are male.

Location wise, the study showed that the entrepreneurs over 50 years are mostly resident in California, Texas, New York, North Carolina and Florida and the food and restaurant industry was the industry in which a majority of them got involved.

Survey Results

It is settled that most people above 50 are starting their businesses not because they lost their jobs or cannot find one.

Rather, the study revealed that 42% of them started the business because they have a passion for it, 36% of them opened business because they found an opportunity to do so, and 22% said they started because they were not satisfied with Corporate America. Only 15% of the participants stated that they opened business because they were laid off or their jobs were outsourced.

The survey revealed that 42% of over-50 entrepreneurs started the business because they have a passion for it, 36% of them opened business because they found an opportunity to do so, and 22% said they started because they were not satisfied with Corporate America.

44% of them noted that they currently employ between two to five employees. 32% of them responded that they were solopreneurs and 12% of them said they have between six and ten employees.

Although the businesses are still relatively small in size, a large percentage of them expressed that they have significant growth plans for their businesses. 64% of them stated that they are anticipating growing their current businesses, while only 6% said they are considering selling the business.

67% of the over-50 business owners indicated that their businesses are profitable to them moment and 76% of them on a scale of 1-10 signified 8 as their level of happiness

86% of the participants stated that they became business owners by buying an independent business or starting their own. 14% said they purchased franchises.

More than half of them said their startups were financed with cash. Over 25% of them said they used their 401(k) plans as capital for their startups. Money from friends and family, unsecured loan and a line of credit also ranked high on the choices of financing methods.

401(k) business funding which is also referred to as Rollovers for Business Start-ups allows the individuals to make use of funds in their retirement accounts as capital for a business startup. Analysts noted that considering that people above 50 would most likely have higher savings in their retirement accounts, it is logical that they opt for this financing method than people who are much younger.

Would-Be Entrepreneurs

The survey also had as participants those aged 50 and above who intend to launch a business but have not yet started. Most of the participants indicated that finding financing was the biggest challenge for most of these would-be entrepreneurs above 50. Specifically, 61% stated that they were struggling with raising capital to start their businesses.

Most of the would-be entrepreneurs in the survey said they need nearly $100,000 to launch their businesses and over half of them said they do not have sufficient capital to start. 4% admitted that they do not sufficiently know about the available financing options, three out of ten said their current credit score disqualified them from applying for some of the options and 19% responded that they did not want to incur any form of debt.

The results of the survey also showed that capital isn’t the only issue these would-be over-50 entrepreneurs encounter. 40% indicated that they are yet to identify the right opportunity, 28% responded that they are unsure about how to start, 14% stated that they were not yet prepared to leave their current jobs and 13% said they currently do not have a sufficient support system.

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