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Why Now May Be a Good Time to Start Your Small Business

Rising prices are leading many older adults to choose to work for themselves

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Twyla Teitzel worked as a secretary at a private school, but over the past year the commute — and the rising price of gas — began to take a toll.

“It was fun and I liked it, but I didn’t really want to do it anymore,” Teitzel, 66, says of her day job. “I’m not in my 30s or 40s. What could I do?”

A vegetarian who had taught cooking classes and run cooking demonstrations at farmers markets for fun, Teitzel hit on an idea: She could become a social media influencer, focusing on plant-based foods and working for herself.

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“I was able to turn my hobby into a business,” says Teitzel, who lives near Sacramento and has already started attracting sponsors for Plant Based Twy, her TikTok and YouTube channels, on her way to making a living from her newfound entrepreneurship.

It’s becoming a more common story among people age 55 and older, who are leaving conventional workplaces in favor of starting their own businesses, taking on side hustles to supplement their incomes, or simply keeping busy by venturing into moneymaking pursuits they may have always thought about but never got around to trying.

“There’s clearly more of this kind of thing going on,” says Norm Sherman, a former marketing and advertising manager and now a New York-based volunteer mentor at SCORE, formerly the Service Corps of Retired Executives, which provides free help to aspiring entrepreneurs.

“Especially when COVID hit, a lot of people got laid off or quit,” says Sherman, who is 74. “As they get into their late 50s and early 60s, they still need to work but can’t get a job. And that is driving a lot of people to decide to start a business.”

Many older adults are becoming entrepreneurs now

There has been an “unprecedented” rise in new business applications since the start of the pandemic, according to the Ewing Marion Kauffman Foundation, which does research on entrepreneurship. And it’s older workers who are far more likely to be self-employed.

Nearly 40 percent of Americans over 55 work for themselves, according to the Bureau of Labor Statistics, compared to fewer than 6 percent of 25- to 34-year-olds. Self-employment is greatest among people 65 and older than for any other age group.

While over-55s make up 21 percent of the U.S. population, they own more than half of all small businesses, according to SCORE. The organization calls them “encore entrepreneurs.”

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“We can definitely see there’s been more of a shift toward older entrepreneurs,” says Lauren Aleshire, senior communications manager at the Kauffman Foundation. “A lot of it is the instability that has likely come from the pandemic and the changes it’s caused in the workplace. There’s an opportunity for people to now pursue something different that was maybe always at the back of their minds.”

Older adults are also increasingly concerned about their financial security, especially as costs have been rising. “People see what’s happening to their 401(k) or their retirement savings,” Teitzel says, and want a little extra money coming in.

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But older entrepreneurs also may have financial advantages their younger counterparts don’t, says Suzanne Bergmeister, executive director of the Gilliam Center for Entrepreneurship at James Madison University. Social Security retirement benefits and pension payments give older people who start small businesses money they can rely on while they’re waiting for the business to take off.

“You have a retirement income coming in, so it’s not quite as risky to make the entrepreneurial leap,” says Bergmeister.

That doesn’t mean there’s no risk. Seventy-four percent of new business owners invest their personal savings, a SCORE survey found. Nearly a quarter dip into their retirement funds. More than a third rack up credit-card debt. And nearly one in five of those startups fail in the first year, according to the Kauffman Foundation.

“What we’ve seen is a lot of people who have said, ‘I’m going to go do this,’ without thinking about what the business plan should be and how much time it will take to be successful,” says Sherman. “You need to start [a business] you have some sort of knowledge or experience with. And then you have to have the energy, the willingness and the financial ability to keep that business going for at least a year.”

Organizations can offer resources and support

SCORE is among the resources that can help, with free mentoring and advice. Other nonprofits, government agencies and even banks offer guidance too, usually without charge. The U.S. Small Business Administration, which has small business development centers in every state, provides step-by-step instruction online and offers free online courses and podcasts — including, with the Federal Deposit Insurance Corporation, a program called Money Smart about the finances of starting and managing a business. Other support for over-55 entrepreneurs is available from the Small Business Resource Center for the 50+ and AARP Foundation.

Teitzel turned for help to GetSetUp, a social learning platform for older adults that covers many topics and is mostly free to users, thanks to subsidies from states, health care companies, Medicare Advantage plans and other benefactors.

In its two years in operation, GetSetUp has found surprising demand for information about entrepreneurship, cofounder Lawrence Kosick says. Nearly 400 people age 55 and older entered its first-ever virtual startup accelerator program in June, a Shark Tank-style competition to pitch new business ideas. The five winners got $2,500 apiece in seed funding.

“If you think about what older adults are most interested in, we realized that in addition to their health and wellness, financial security was becoming a more important consideration,” Kosick says. “We really do see a significant trend toward anything around augmenting their current skills — how to write a business plan, how to use Excel — so they could either grow a company they already run or start a new business.”

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Setting up business technology can be a challenge

For all their experience, many older entrepreneurs say that one of their highest hurdles was finding the confidence to go out on their own.

Leslie Lamb, who lives in Albuquerque, is the daughter of an entrepreneur. It was by working for her father that she got her start as an accountant and bookkeeper specializing in taxes and payroll. She did all of that while raising a daughter as a single parent, and she later worked part time as a cosmetics merchandiser.

Yet when retail turned “really nasty” during the pandemic and Lamb decided to quit and go to work for herself, “I still wasn’t sure that what I had to offer was something that people would pay for.” Being confronted at her cosmetics job by angry customers had “brought my confidence to a lower level than ever before.”

She, too, found her way to GetSetUp to learn about entrepreneurship. By the time she was named one of the winners of the startup accelerator contest, she was well on her way to starting Grace Place Creative. The “grace” in its name is an acronym for growth, resourcefulness, accountability, community and empowerment. The graphic design company will make — and teach others to make — business forms, websites, e-books, workbooks, slide decks, newsletters, business cards, social media and other digital products.

One confidence killer for entrepreneurs over 55, say those who work with them, is the technology essential for a business to succeed today. “It’s a very big obstacle,” says Sherman. “We’re still a generation removed from the digital natives.”

SCORE and similar organizations put an emphasis on teaching technology. “Once we counsel them, they find it’s fun,” says Sherman.

Once they’re up and running, older entrepreneurs say one of the best things about working for themselves is that they can control their time. “I can still take my grandson to gymnastics and then go do a TikTok later. So the flexibility is huge,” says Teitzel.

“You can do it on your own terms,” echoes Lamb, who now has a blended family, with five children and five grandchildren. “There are more things going on in my life in terms of supporting family members and babysitting than I ever had as a single parent. And I can work around those things with my own business.”

Another big driver is the chance to finally realize long-imagined plans.

“Our generation, the over-55 generation, was taught that you go to college and go work and then retire. But we never got to do our passion,” says James Madison University’s Bergmeister. “Now if we’re retired — or if we’re retired and we need a secondary income — it’s a time to say, ‘I’ve worked hard my whole life. Now let me turn my passion into a business.’ ”

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