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5 Reasons You Should Start a Microbusiness

Older adults are very successful in ventures that have just a few employees, research finds

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Starting a small business can seem like a big step to many people. On top of having a product or skills that customers want, aspiring small-business owners may have to get financing, hire employees and handle the paperwork necessary to set up shop. Because many businesses that have hundreds of employees and millions of dollars in annual revenue still might qualify as “small,” competing against them for loans and other types of assistance can be difficult.

If that sounds like a tough challenge, maybe a microbusiness is a better fit for your goals. A microbusiness generally is defined as a venture with 10 employees or fewer, and often these types of companies can be started with less than $10,000. The types of microbusinesses range from small accounting firms to landscaping/lawn services, food trucks to interior design.

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According to some data, people age 50 and older are particularly successful as microbusiness owners.

“The means that [older adults] have accrued over time unlock that capability to really put their microbusiness in a position to be successful,” says Robert Brown, senior director of Venture Forward Research and Insights.

GoDaddy, a company that provides domains for websites, created Venture Forward in 2018 to analyze how much economic impact microbusinesses were having on their communities. Venture Forward uses that data to provide local governments, policymakers and nonprofit organizations with research that helps them understand how to help these smaller businesses thrive.

In February 2022, Venture Forward surveyed 2,300 entrepreneurs among the millions of microbusinesses that have used GoDaddy as their domain provider. At AARP’s request, Venture Forward analyzed those results to look at the trends among older microbusiness owners. Nearly half of the respondents were age 50 and older, offering some clear insights about older microbusiness owners. The analysis split the respondents into four age groups: under 50 years old, 50–59, 60–69, and age 70 and older.

1. Retirees run microbusinesses to stay active rather than make extra money.

Money matters, of course. But the older a microbusiness owner is, the more likely they are running the business to stay engaged rather than earn income. Among owners age 70 and older, 24 percent said they own the business to stay active. Only 13 percent of that age group said they do it to make extra income.

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“For 1 out of 4 folks who are over the age of 70, what’s driving them into this particular [microbusiness] activity is that they don’t want to become stale or become irrelevant,” Brown says. “They want to have something that is active that they can contribute towards.”

For owners in their 50s and 60s, earning extra income was more important than staying active. Eighteen percent of owners ages 50–59 said they run businesses for extra money, while only 5 percent said they do it to stay active. For the 60–69 group, 19 percent do it for the additional income while 14 percent of respondents said they run businesses to stay engaged.

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2. Being your own boss is less important for older microbusiness owners.

While entrepreneurs bear the ultimate responsibility for their businesses, that authority isn’t what motivates them to start businesses later in life. Among microbusiness owners younger than 50, roughly 43 percent said they started the business because they wanted to be their own boss. But that share shrinks steadily with each age group, dropping to 37 percent for those 50–59, 32 percent for owners 60–69 and just 25 percent for owners age 70 and up.

3. Nearly 3 in 10 older owners make over $4,000 per month from their microbusiness.

According to the survey, 34 percent of older microbusiness owners are earning significant annual income. The experience they have built through previous jobs or businesses is paying off later in life.

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“Whether it’s to supplement the retirement income they’re getting from their 401(k) or savings they’ve accrued over their lifetime,” the income is meaningful, Brown says. “That this population is able to generate these kinds of results is a strong signal that their experience pays off and creates these more robust and healthy communities in which they exist.”

Only 27.8 percent of microbusiness owners under the age of 50 who had some previous entrepreneurship experience were earning more than $4,000 per month.

4. Marketing and technology are the biggest challenges for older microbusiness owners.

When asked to name their biggest challenge, 66 percent of owners 60–69 and 63 percent of owners age 70 and older cited marketing their business. Only 52 percent of the 50–59 group said marketing was the top hurdle, a share that was comparable to the number of owners under the age of 50 who said the same (55 percent).

Older microbusiness owners also tended to be less comfortable setting up their businesses online. Only 25 percent of respondents age 50 and older said getting online was their top challenge. But 37 percent of owners in their 60s, 36 percent of those age 70 and older, and 30 percent of microbusiness owners in their 50s picked getting online as a top challenge.

5. Access to capital is less of a challenge for older owners.

For younger owners, raising capital to launch their businesses can be one of the key obstacles. Roughly 29 percent of those under age 50 said gaining access to capital was their biggest challenge. Only 15 percent of owners age 70 and older and 20 percent of those in their 60s said capital was a top obstacle.

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