Nearly half the UK's self-employed are over 50 years old1, and one in six businesses now started in the UK are by over 50s2. The great news is that the businesses started by this generation have more than double the chance of succeeding within the first 5 years, compared with those founded by the younger generation3. But why is it that so many over 50s are opting to start their own businesses - and why do they seem to be thriving?
It's a new challenge
We've all fantasised about changing careers once or twice in our lives, and for some, the lure of starting their own business is irresistible. There has been a spike in people becoming self-employed during retirement, and the financial benefits of this are clear, but the fulfilment that comes from a new challenge - especially when your existing career is winding down - is not to be underestimated.
It's a way to invest
With finances (usually) more stable in our 50s and beyond, and financial commitments such as mortgages slowly coming to an end, older entrepreneurs have more capital to put into a new business than they may have done in their younger years. This means that only 13% of over 50s require a bank loan for their start up and those that do, are usually more likely to be accepted than their younger counterparts. Generally due to having a better credit rating, more security and sometimes even a better thought-out business plan. Research by the Yellow Pages has also revealed that the average annual turnover for an over 50 entrepreneur is around £67,5004 - so for those of us who do have a business idea and the money to turn it into reality, it's a way to adding to our savings pot - rather than relying on it if the next job does not happen to come along, and can potentially turn savings into something bigger.
For some it's the only option
On the other side of the coin, it's also true that people in this age bracket have been hit hard by the recession and opting to start their own businesses as a reaction to being laid off from previous employment, especially if they're finding it hard to re-enter the workforce.
We've written articles previously on job hunting for the over 50s and there are certainly some jobs to be had out there for the golden generation, but unfortunately, unemployment among the over 50s is on the rise5, which could be why this generation is starting their own businesses to keep the money flowing in later life.
It makes the most of your experience
It's often said that with age comes wisdom, and those of us over 50 certainly have a lot of wisdom in the workplace after having been employed for so long. It's natural that some people will want to take all of this experience and channel it into their own business ventures instead of working for someone else. After all, it's the benefit of so much experience that can help these start-ups flourish. Even if your chosen business is in a completely different area to your previous career, there are always transferable skills that can be used - and probably a couple of professional mistakes you've learnt from in order to know what not to do!
If you're over 50 and thinking of starting your own business, there are many resources out there to help you on your way - including PRIME, a branch of the Prince's Trust that specialises in support for over 50s who want to start a business, and Start Up Loans - a government funded scheme to provide loans and mentors for start-ups.
1 Office of National Statistics (2012) "Employment, unemployment and economic activity by age group" - Available from www.ons.gov.uk
4 Kingston University Small Business Research Centre - Available from http://business.kingston.ac.uk/research
5 Office of National Statistics (2012) "Employment, unemployment and economic activity by age group" - Available from www.ons.gov.uk
Note: Whilst we take care to ensure Hub content is accurate at the time of publication, individual circumstances can differ so please don’t rely on it when making financial decisions. OneFamily do not provide advice so it may be worth speaking to an independent financial advisor about your own circumstances.