In September 2017, the Institute of Directors published a report entitled, "The Age of the Older Entrepreneur".
If asked to describe a modern entrepreneur, most people will likely jump to the image of a 20-something founder of a high-growth tech start-up. This stereotype is fuelled by the stories underpinning a number of the world’s best known companies e.g. Facebook and Snapchat. This reinforces the assumption that youth is the secret to success.
However, while youth may be an obvious part of the Silicon Valley story, it is hardly the common thread connecting the majority of business founders across the UK. Entrepreneurship has also never been a route just available to the young. A growing number of people over 50 are joining the start-up community, many capitalising on the skills and experience they have accrued over long careers in order to start a successful business.
A recent survey showed that 53% of IoD members define themselves as either an entrepreneur or company founder and in addition, 67% of members are above the age of 50.
Age is not an obstacle to starting a business, but like young people, those starting a business later face challenges, albeit different ones. For those facing the prospect of retirement or leaving lifelong employment, starting a business can also be a great way to continue engaging with work. It may not be everyone’s first choice for 'retirement', but it can keep an individual busy, stimulated and potentially physically and socially active.
Business acumen will tend to improve with age, allowing founders to better understand industry nuances, and to utilise networks and skills built over their working lives. An IoD survey showed that 86% of members work in a field that is related to previous experience. Ultimately, there is rarely a substitute for experience, particularly in complex industries.
Research in 2009 found that ‘the average age of a successful entrepreneur in high-growth industries such as computers, health care, and aerospace is 40. Twice as many successful entrepreneurs are over 50 as under 25; and twice as many over 60 as under 20. The vast majority, 75%, have more than six years of industry experience and half have more than 10 years when they create their start-up.
Statistics show that older entrepreneurs tend to be more successful than those starting out younger. According to a survey by Age UK, more than 70pc of businesses started by people in their fifties survive for at least five years whereas only 28pc of those started by younger people last that long.
With the economy needing to be rebuilt post-Covid-19, older entrepreneurs should be encouraged to create businesses using their skills and business acumen.
See the IoD report here.
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Geoff Knott, 20/05/2020