A sizable number of American baby boomers are considering starting businesses or nonprofit ventures over the coming decade, according to new research released Tuesday by Civic Ventures, a think tank on boomers, work and social purpose.
Nearly half of the 25 million women and men who expressed such interest want to be encore entrepreneurs, making a living while having a positive social effect. Three-quarters expect to create small, local organizations that employ up to 10 people.
The study, “Encore Entrepreneurs: Creating Jobs, Meeting Needs,” which was funded by MetLife Foundation and conducted by Penn Schoen Berland, shows that although potential encore entrepreneurs are daunted by the economic risk in starting ventures now, half are still eager to move forward:
- 58% said the current economic crisis makes them more likely to start their own businesses or nonprofit ventures.
- 54% said they were “very likely” to start their ventures within the next five to 10 years.
- 47% of encore entrepreneurs believed they would not be able to obtain adequate financing. The same percentage expected to tap their personal savings to launch their ventures.
- 52% said they had delayed launching their ventures because they did not feel secure enough financially at present.
Civic Ventures noted in a statement that the findings reinforce consistent research from the Kauffman Foundation, which shows that for 11 of the 15 years between 1996 and 2010, Americans between the ages of 55 and 64 had the highest rate of entrepreneurial activity of any age group.
The new study included findings in several areas.
- 37% of Americans in the 44–70 age group have already started businesses or nonprofit organizations; of these, 42% are still actively involved in their ventures.
- Aspiring entrepreneurs reported an average of 31 years of work experience and 12 years of community involvement.
- 85% reported having management experience, averaging 15 years.
On the motivation and interests of potential encore entrepreneurs:
- More than 80% of encore entrepreneurs said they wanted work they “are passionate about” and that gave them “a sense of meaning and a feeling of accomplishment.”
- Encore entrepreneurs expressed interest in social services (37%); poverty alleviation (28%); working with at-risk youth, economic development and health care (all at 24%); the environment (19%); and human rights or social justice (18%).
On the goals and needs of potential encore entrepreneurs:
- 68% of potential encore entrepreneurs said they would consider their businesses or nonprofit ventures worthwhile if they earned less than $60,000 a year.
- 67% said that they would need $50,000 or less to get started, and only 20% said they would need more than $100,000.
- 67% planned to have a positive effect on the local, state or regional (as opposed to national or international) level.
The research found that compared with aspiring entrepreneurs in the boomer age group without a social mission, potential encore entrepreneurs are more likely to be women, African American, involved in their communities, motivated by faith and serious about getting started.
Penn Schoen Berland conducted 400 online interviews from Sept. 14 to 28 with American adults between 44 and 70 who expressed interest in starting their own business or nonprofit ventures in the next five to 10 years (Potential Entrepreneurs). This included 193 Potential Encore Entrepreneurs who expressed interest in starting ventures that would have a positive social impact, meet a community need or address a social challenge.
“There are certainly many obstacles to building successful enterprises at this stage in life,” Marc Freedman, founder and CEO of Civic Ventures, said in the statement. “But, as we’ve seen with The Purpose Prize, many have been able to make a living while making a difference. We need to help many more do the same.”
Last week, Civic Ventures gave five encore entrepreneurs over 60 years old its $100,000 Purpose Prize for their social contributions.