Too Old to Be Self-Employed? - Tips and Help for Older Founders
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| Photo by Foto Sushi on Unsplash |
However, one usually does not think of older people who dare to take the step into self-employment when they are 50+.
In this article, I would like to investigate the question of whether you can be too old to be self-employed.
I will go into the disadvantages, but also show the advantages of older founders and give tips.
(To the article Too young to be self-employed? )
Can You Be Too Old to Be Self-Employed?
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| Too Old to Be Self-Employed? - Tips and Help for Older Founders |
When it comes to setting up a business, younger people tend to be involved. At least that is what you often get.
But is it like that and does age play a role in founding the company?
I surveyed my readers and here is the result:
Does age play a role in starting a business?
- No, the age doesn't matter. (70%, 85 votes)
- Yes, you should be a bit older. (13%, 16 votes)
- Yes, one should be young. (12%, 14 votes)
- I do not know. (7%, 8 votes)
Number of participants: 121 (1 vote)
More than two-thirds of the survey participants believe that age does not play a role in starting a business. I think that's a very clear statement.
I was also surprised that the proponents of young founders are in balance with the proponents of older founders. 12% each stated this.
Now, of course, the question arises, what do these readers mean by “older”? When I started my own business at 31, I was probably one of the older founders.
But what about those who are over 50?
The Age Structure of German Founders
People who are older than 50 are relatively seldom found as founders.
According to the KfW Start-up Monitor 2013, the proportion of 45 to 55-year-old founders was around 20%.
Only every 10th founder was older than 55 years. The proportion of older founders is not only lower in absolute terms, but also relatively few older people become self-employed relative to the total population.
But something is moving. According to the 2013 DIHK start-up report, the proportion of founders over 50 has increased significantly since 2003. While it was 12% 10 years ago, it is now 20%.
There are certainly many reasons for this. Today's people over 50 years of age are certainly healthier and fitter than ever before. Unfortunately, more older people are also affected by unemployment, and self-employment offers a way out.
The Internet should not be forgotten, which today of course also offers older people many opportunities to start a business.
Why Do Older People Rarely Set Up a Business
What is it that keeps many older people from starting their businesses? Here are a few typical reasons:
- Dare to Do Something New
It is not uncommon for people to have a little more respect for a new beginning as they get older. You have already experienced a lot, built something up, and it is not so easy for many to take the plunge into the deep end again. - Fear of Failure
But there are also very solid reasons. Many older people are afraid of failure. This is understandable because while younger founders can start again after failure, it looks a little different with older founders. Then there is not much time left to try again. - Retirement Account
This includes many, the fear of risking their retirement plans. However, this fear is partly unfounded, as there is a certain level of seizure protection for old-age provision. Nevertheless, the risk prevents many older people from starting a business. - Financing Difficult
But even if you want to start a business as an older person, it is not that easy at all. Apart from the fact that there are almost no funding programs for older founders, the house bank often finds it difficult to give the required loans. - Public Image
It is not yet really common in our society for people 50+ to start their own business. The image of the typical founder is different and that makes many older people doubt whether it is even possible. - Lack of Know-How
Anyone who has worked as an employee for many years often lacks the commercial know-how: Marketing, customer acquisition, accounting, etc. are important. In addition, many older people no longer have access to the latest technology and find it difficult. But, for example, customer acquisition without the Internet is often a disadvantage today. - Stress
Last but not least, independence is of course a burden for the body and mind. With advancing age, the problems in this area naturally increase and even those who are still fit at 50 naturally wonder what it looks like at 55 or 60.
These and other reasons prevent many older people from starting their own business, even though they are interested in it.
Advantages of Older Founders
But older people also have many advantages that can have a positive effect when setting up a business:
Professional Experience
Anyone who has already worked in their field for 20 or 30 years naturally has a lot of professional experience that can be worth gold in self-employment. You make far fewer mistakes and you know what is important.
Life Experience
But the life experience that you have been able to gain so far also has a positive effect. You have already experienced a lot of good and bad things and you can deal with people very differently.
Trust in Older Target Groups
The proportion of pensioners and older people in general in our society is growing and of course, they also have needs and there is a lot of money to be made there. Older founders in particular have the opportunity to successfully offer services or products for older people. There is often a better level than when a 20-year-old or a 20-year-old tries to address this target group.
Employee Management
The social skills and usually greater inner calm ensure that older entrepreneurs are often better able to deal with employees. That can be an advantage.
Network
In the many years of work and private life you have made many contacts and know a lot of people. Such a network can be very useful when starting a business.
Equity
As a rule, older people have more equity available so that they do not have to fall back on loans or the like.
Care
An eye for details and more care is also what distinguishes many older founders.
The advantages of a fulfilled life and the experience gained from it can be great plus points when starting a business.
Tips for Older Entrepreneurs
To set up a business successfully at the age of more than 50, you should pay attention to the following tips, among others:
- Advice
You should get adequate advice. The requirements for founders are high and the IHK or other bodies can offer a lot of helpful information. - Protection
You cannot insure yourself against failure, but you should at least make sure that your assets are as safe as possible. It starts with the choice of the legal form and also applies to the possible insurance policies.
The voluntary continued payment of the statutory pension should also be considered, especially if you have paid in for a long time. - Voluntary Unemployment Insurance
You should carefully consider whether voluntary continued insurance in unemployment insurance makes sense. If you have already paid in for a long time, it can be worthwhile, especially if you are not sure about the success of the foundation. - Minimizing Risks
You should be careful when planning the independence definitely that you minimize the risk because you just no longer have so much time in a failure. In addition, it doesn't get any easier with each passing year. - Fast Amortization
The business model should also not be designed for the long term. It should be possible to earn the money invested again relatively quickly. - Commercial Knowledge
It is very important to bring yourself up to date about commercial knowledge. Just like with all other founders, the best specialist knowledge is of no use if you drive the company to the tree in terms of business management.
Conclusion
If I compare myself today with my 18 years old alter ego, then you will notice differences.
At that time I had less discipline, no experience, I wasn't sure where I wanted to go and what I could do and I didn't have particularly strong stamina.
I certainly had more energy for that and of course, I was more flexible.
Nevertheless, I am not sure whether self-employment at the age of 18 would have been good. Probably not in my case, at least.
But everyone is different and you should make the most of your age. As an older founder, you have different strengths than a young person and you should use that instead of complaining about the disadvantages.
The right attitude is most important. Some 20-year-olds are already dreaming of retirement and do not have a lot of drive and some 50-year-olds still have dreams and are full of energy.
You can find more information in the free PDF magazine Gründerzeiten number 19 of the Federal Ministry of Economics and Technology.
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