The Baby Boomer Entrepreneur
Tech startup founders in their 20s and 30s make all the headlines, but when it comes to entrepreneurship, increasingly it's baby boomers who are more likely to be in business for themselves — and creating jobs in the process.
For Lynn Gray, the idea of starting her own firm had never been anything more than an occasional daydream.
"I never really had the time to think, 'Do I want to do something completely different and take a risk?''' said the former head of recruitment in Lehman Brother's Global Real Estate Group.
With Lehman's collapse in 2008, nobody was hiring recruiters on Wall Street. At age 59, she had to start fresh, so she enrolled in an entrepreneurship course. She launched her own recruiting service, Campus Scout, three years ago.
She's built a client base and now is looking to expand. "I've reached a point where I can't do it myself," she said. "I need to get some people who could go out and be a sales force, beyond me." (More: 11 Notable Entrepreneurs Teaching the Next Generation)
It's the kind of story Michelle Markey, vice president of The Kauffman Foundation's FastTrac entrepreneurship programs, has seen again and again.
"If you follow all the trends that kind of swirl around the boomer population," she said, "this is a pretty obvious one—that we're going to see the number of boomer entrepreneurs increase pretty significantly."
Older workers have historically seen an advantage in forming businesses, but baby boomers have fared even better than younger entrepreneurs during the Great Recession. Their labor participation rate has climbed steadily over the last decade while for younger workers it dropped in 2008.
The self-employment rate for adults 55 and older is 16.4 percent, according to Bureau of Labor statistics. That compares with a 10.4 percent rate of self-employment for the total labor force, which has seen a decline.
"We do see much higher rate of self-employment among older workers," said BLS economist Steven Hipple, partly because it's easier for boomers to leverage their experience.
"As people age, they're more likely to accumulate capital or have access to credit," he said.
Boomer businesses may also be more successful. BLS data shows the majority of older workers with incorporated businesses are involved in higher-paying management and sales services. Nearly two-thirds of them have paid employees, compared to just over one-third of incorporated firms owned by 25-34 year-old entrepreneurs. (More: An Apprenticeship to Rival Peter Thiel's?)
Experience is one key advantage boomers have over their younger cohorts, said Sevanne Kassajian, FastTrac program instructor at the City University of New York. Older students are often more focused about pinpointing their customer base.
"Older entrepreneurs are a little clearer about what they like, who they are, and why," she finds, "and that gives them the ability to see more clearly who their target market is."
Their sense of time is also on their side, to paraphrase the classic Rolling Stones song.
"The lifecycle of the business for the boomer entrepreneur is much shorter," said Michelle Markey, who helped design a new FastTrac entrepreneurial program designed especially for boomers. (More: Surprising Cities Where New Businesses Are Growing)
"Most are not getting into entrepreneurship to leave a legacy," she said, but they are looking for fulfillment. "It's a feeling that it's their time."
Lynn Gray admitted she's still not earning anywhere near what she earned at Lehman, but she's never been more excited about what lies ahead.
"I'm constantly with entrepreneurs, and there is that entrepreneurial spirit and support that ... keeps you going."