Over 50s Overjoyed with Entrepreneurship

Oct. 28, 2007

It's never too late to start a business, and the UK's over 50s are proving it.

And senior start-up entrepreneurs, who contribute £24.4bn to the economy every year, are not just doing it for money - there doing it for fun and to maintain a better work/life balance.

The research, carried out by the Yellow Pages and analysed by Kingston University’s Small Business Research Centre, delves specifically into new businesses established by older entrepreneurs and shows the group are becoming a powerful force within UK plc.

It identifies an emerging group of senior startups (business owners aged 50 and over who have set up in the last five years) who account for approximately one in six (16%) fledgling businesses in the UK each year.

The study seeks to understand the motivations of this group, and whether they reap the benefits of their greater life experience.

According to the study:

* Senior start-ups turn over an average £67.5k per year and tend to work alone, from home
* Most entrepreneurs in this group (61%) regret not having set up on their own earlier in life, with just under half (44%) claiming they are now happier than they’ve ever been
* Most have no thoughts of retirement and see their business as their pension plan. More than two thirds (71%) want to run their business for as long as they are able
* Businesses within this group tend to be financed by savings – with only 13% funded by bank loans
* The main motivations for starting up a company at this time of life are a desire to do something pleasurable (39%), obtaining a better work/life balance (29%) and not wanting to work for someone else (24%)

The study was commissioned to coincide with Yellow Pages’ sponsorship of the Startup Awards Silver Fox category – an accolade that recognises and rewards successful startups with inspirational over 50s at the helm.

Commenting on the research, Mark Hart, professor of small business research at Kingston University and PRIME trustee said: “This research adds greatly to our knowledge of the over 50s’ contribution to enterprise in the UK. There is clear evidence that the entrepreneurial activities of this diverse group are capable of providing sustainable incomes as they engage in new business ventures resulting from many years of experience. This is an important finding in the context of a growing reliance upon state pensions by an ageing population.”

For most senior start-up entrepreneurs, business is a lone concern (79% work alone), or their enterprise is kept small and compact with between one and five employees (18%). The majority (82%) work from a home office and one in 10 work from a workshop or retail unit. One in 10 turns over more than £100k.

Most popular over 50s startups business fields:

1 Professional and business services
2 Retail, hire and repair
3 IT and Telecommunications services
4 Arts, sports and recreation
5 Media and creative services
6 Construction

Ambition comes with age

About one in 10 senior entrepreneurs say they’re more ambitious and motivated than when they were younger, which has contributed to their business achievements. Around half say age and experience has been a key advantage and hard work and commitment is what makes their business tick.

A leap into the unknown

Only 16% of those questioned had run their own business before, with 41% having worked in a completely different field before setting up on their own.

Confident enough to go it alone, almost one in five senior startup entrepreneurs are inspired to take the plunge by family and friends or work colleagues, with only one in 10 being influenced by television shows like Dragon’s Den, despite their popularity.

Freedom and happiness

The majority of senior start-up entrepreneurs view freedom and happiness at work as much bigger motivators than making money. More than a third of over 50s said the reason for setting up on their own was ‘to do something they enjoy’, while nearly a third again wanted to achieve a better work/life balance.

Around a quarter claim they were frustrated working for someone else but only 12% want to ‘make lots of money’. Only 2% say they want to create a nationwide business, while two in five say that their main ambition for their business is to keep it small and ‘niche’.

The gender divide

Women are more likely than men (28% compared to 15%) to be prompted to start up on their own following a lifestyle change such as ill health, divorce or moving house. One in five women who started a business over the age of 50 were not working immediately before setting up their businesses.

Happier than they’ve ever been

While it’s not all plain sailing for this burgeoning group of small business owners (with challenges such as building up a customer base cited by almost half and marketing their business by more than one in 10), a large proportion (44%) say that they’re happier working for themselves than they have ever been. Around a third of all respondents say that they love their work and more than half say that the key piece of advice they would give to other over 50s would be to ‘go for it’.

To find out more about the study, as well as advice and tips on setting up a business as a senior start-up entrepreneur, go to peoplebehindthenumbers.com

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