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Hold the Retirement Party—Grandma's Starting Her Own Business

Baby boomers make up a growing share of new entrepreneurs, as older Americans look for ways to stay busy and earn money.

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Judith Norton is looking to expand her low-sugar, spiked jam business after taking an entrepreneurship class through a pilot program from AARP and the Kauffman Foundation.(Eugene Garcia, Orange County Register)

Judith Norton never imagined becoming a purveyor of high-end jam. The partially retired California resident instead spent the bulk of her career creating and writing educational training materials for private companies from the coffee industry to community colleges. Yet now, at 67, Norton finds herself contemplating a different career trajectory: as an entrepreneur who makes and markets low-sugar jam, finished with a splash of spirits. Her jam tastes so good that an Orange County Register food writer listed it as a favorite product for 2013. That's not a bad distinction for a product that Norton considered a hobby until recently.

Norton, like many aging Americans, is not ready to retire in the stereotypical sense—moving to Florida or playing bingo or spending her days shuttling between doctor's appointments. (She says she's way too healthy for that.) Instead, she is thinking about ramping up her jam-making into a small business with a dedicated production space and greater social media presence.

 

What helped to put her in this entrepreneurial frame of mind? A pilot program from AARP and the Kauffman Foundation that teaches entrepreneurial skills to baby boomers and senior citizens in Orange County and New York as a way to both keep this demographic engaged in the workforce for longer and to provide them with a potentially different way to earn money as they age. "We're trying to stimulate innovation that will benefit people over the age of 50," says Jody Holtzman, senior vice president of thought leadership at AARP, who helped to launch the pilot programs. "It can have a direct impact if people over 50 start companies, hire workers, and pay taxes."

The number of entrepreneurs ages 55 to 64 has only grown over the last decade—busting the myth of entrepreneurship as something solely for young, hotshot, hoodie-wearing risk takers. In 2003, people ages 55 to 64 represented 18.7 percent of all new entrepreneurs, compared with 2013 when their ranks rose to 23.4 percent, according to data from the Kauffman Foundation. New entrepreneurs from this age group now surpass the number of those in the 20-34 age range. "The trend lines are very clear there," says E.J. Reedy, director in research and policy at the Kauffman Foundation. "Most people who go into entrepreneurship have some work history."

The Kauffman Foundation first became interested in catering to the baby boomer and aging entrepreneurial set in 2009, when one of its top researchers, Dane Stangler, predicted a coming entrepreneurial boom among older people. Stangler thought that rising life expectancy, coupled with the huge cohort of baby boomers about to retire and a pretty tough labor market, would drive more people to start firms or work for themselves. His predictions were not off-base. The number of new entrepreneurs between the ages of 55 and 64 continues to grow, compared with the youngest generation (even as the largest share of new entrepreneurs still falls in the age range of 45 to 54).

 

Armed with about $30,000 in AARP money, the Kauffman Foundation created a business class designed especially for older Americans. The goal was to help baby boomers and senior citizens think through the mechanics of starting a business from scratch: from honing a sales pitch to finding financing to building financial projections and developing a personal brand. At the same time, the class tries to take into account the unique aspects of starting a business as an older worker such as the financial risk and factoring in the desire to eventually retire. "If I'm a boomer and I'm thinking about starting a business, I need to plan my exit as soon as I plan my entrance, unlike a 20-year-old," says Michele Markey, vice president of products and programs at the Kauffman Foundation. So far, about 100 people have attended the pilot classes in New York and Orange County, with AARP offering some scholarships to cover part of the cost.

Larry Kutcher, a consultant to entrepreneurs and companies, taught the inaugural Orange County class. Unlike younger people, Kutcher says that baby boomers and retirees bring special skills to entreneurship: lots of work experience, a fairly sophisticated support network, and financial resources. The challenge, he says, is that many come from corporate environments, where they're accustomed to an abundance of resources, or where they're taught to act with more caution in pursuing their ideas.

This is where Kutcher first encountered Norton, the jam-maker who still raves about the experience and stays in touch with her classmates. "It gave me a different way to look at having a business and different options that I never would have had access to," she says. "It was a real high to go to the class every week."

Of the 21 people who enrolled in the Orange County class, about three or four are now actively pursuing their business ventures. In addition to Norton's jam prospects, others are working on opening a consignment store, starting website projects, or offering professional services like helping college students prepare for job interviews, Kutcher says. Just as important, a few attendees figured out that their business ideas would not work in the marketplace. "That is, by itself, a success," Kutcher says.

 

Of course, there's inherent risk in nudging baby boomers and senior citizens toward entrepreneurship. The financial risk of potentially sinking part of one's nest egg into an uncertain venture comes at a time when people need to ensure they have enough money to live as they age and face mounting health concerns. But for baby boomers who've found themselves laid-off from long-held, corporate jobs thanks to the recession, or for those who aren't yet ready to retire, entrepreneurship offers an avenue for staying engaged and continuing to make some money over a longer time period. "You no longer have longevity even at the larger companies, and this conspires to make everyone at-risk anyway," Kutcher adds. "Our society has changed, so that everyone is an entrepreneur in some respect."

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