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3 Myths That Keep People Over 50 From Starting a Small Business

July 1, 2015
Small Business
3 Myths That Keep People Over 50 From Starting a Small Business
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You’ve turned 50 and have started thinking more about retirement — time to finally shelve that longtime goal of starting a small business, right? Wrong.

There’s no reason to give up that dream, say some of those in the know, although it won’t be easy. As an older adult, you’ll have to wrestle with the perception that entrepreneurship just isn’t for you, that it’s a younger person’s world.

But that’s a false view, says Donna Ortega, a program manager at the AARP Foundation, which last week unveiled a $1.4-million program geared to expanding small-business opportunities for low-income older adults.

The initiative, which the organization launched with insurance and investment company The Hartford, is part of the foundation’s Back to Work 50+ initiative to help struggling older Americans.

The program is aimed in part at debunking myths that keep aspiring entrepreneurs older than 50 from starting a small business. Ortega talks about three of them:

  • You don’t fit the ‘entrepreneurial mold.’

The popular images of entrepreneurship feature the young Steve Jobs building the first Apple computer in a Palo Alto garage or Mark Zuckerberg in a hoodie tinkering with Facebook in his Harvard dorm room.

Forget all that, Ortega says.

“While most people picture Mark Zuckerberg when they think of an entrepreneur,” she tells NerdWallet, citing a report from the Ewing Marion Kauffman Foundation, “the fact is that in every year from 1996 to 2007 Americans between the ages of 55 and 64 had a higher rate of entrepreneurial activity than those aged 20 to 34.”

That’s not surprising given that older adults have “more years of experience and knowledge,” she says. And they most likely have a bigger network to help them succeed in launching a small business.

  • You don’t have it in you to be the boss.

Fear is a major reason older adults back away from starting a small business, Ortega says.

That’s largely based on the mistaken view that at 50 and beyond, it’s too late for them to be at the helm of a business venture.

“People don’t have the confidence that this is something they could do,” Ortega says, “or they worry that they don’t have the energy.”

And although the obstacles “can be real,” there are ways to overcome them, she says: “Coaching can help older adults reduce their self-doubt and realistically assess their readiness for being their own boss, and effective guidance can help them build the entrepreneurial skill set that will help them thrive.”

  • You’ll have to go it alone.

Starting a small business may seem like a long, lonely journey to an older adult. But it doesn’t have to be that way.

There are many programs to help older adults navigate the path to entrepreneurship.

Various organizations, such as AARP, the U.S. Small Business Administration and a host of foundations and nonprofits, offer training in different areas of starting and running a small business.

The problem, Ortega says, is many 50-plus adults don’t know these programs exist. That is why reaching out to the members of that age group and letting them know of small-business opportunities is part of the mission of organizations such as the AARP. And spreading the word is the focus of the AARP Foundation’s partnership with The Hartford. The program is not designed to provide small-business loans, but rather to offer assistance to older adults looking to start a business.

This includes technical assistance and training, and researching the needs of older adults when it comes to starting and running small businesses.

These initiatives became important in the wake of the 2008 financial crisis, which took a particularly heavy toll on adults over 50, Ortega says. For many older adults, starting a small business was a way to cope with the crisis.

Programs geared to helping people over 50 start their own business were a way “to help bridge that income gap for older adults who have lost their jobs.”

Many of them were not planning to run a small business full time, she says.

“They needed to find a way to generate additional income,” she says, “which means taking a hobby or a skill and using it to generate income on the side.”

But these entrepreneurs could also play bigger roles, said Diane Cantello, vice president of corporate responsibility at The Hartford.

“They help fuel the economy, and we appreciate all that they do to contribute to the vibrancy of our local communities,” she tells NerdWallet. “Small businesses are owned by people who live in our communities, are less likely to leave, and they are invested in the community’s future.”

Looking to start your business, and need help with financing? Be sure to compare lenders here:

Benjamin Pimentel is a staff writer at NerdWallet, a personal finance website. Email: [email protected]. Twitter: @benpimentel

Image via iStock.