You might guess that the city with the highest rate of self-employment is a high-tech metropolis such as Seattle or Austin.
It turns out that West Palm Beach, Fla., where roughly 25 percent of residents are 55 or older, is the No. 1 hot spot for entrepreneurs, according to Harvard University economics professor Edward L. Glaeser and William R. Kerr, an associate professor at Harvard Business School. The two men crunched U.S. Census numbers for their 2010 study, What Makes a City Entrepreneurial.
Better known for its retirees, gated communities and golf courses, sunny West Palm Beach is suddenly an ideal place to live if you want to start a business.
Starting a Business to Give Back
Just ask Paul Heuwetter. A decade ago, when he retired from working in Citigroup's municipal bond department in New York at age 55, Heuwetter and his wife bought a condo in the West Palm Beach metro area, then commuted back and forth between there and Long Island. But in 2009, soon after the couple settled in Florida full-time, Heuwetter grew tired of doing little more than playing golf three times a week; he wanted to find a way to give back to the community.
So he invested $55,000 and opened a franchise of Seniors Helping Seniors, which provides in-home, non-medical services such as meal preparation, transportation and light housekeeping to older residents. Heuwetter now employs 12 part-timers, ages 45 to 75, and has turned a profit since 2011. But money isn’t his sole motivation. “I take great joy in writing checks for my employees,” he says.
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West Palm Beach's influx of educated retirees, mostly from the Northeast, is one reason the area has become a hub for self-employment.
Teneka James, associate director of the West Palm Beach Downtown Development Authority, says many local entrepreneurs are entering their “second act” after retiring from business careers and are now eager to pursue a passion, such as opening a restaurant or fitness center. Others see self-employment as a transitional stage between the end of their corporate lives and the beginning of full-fledged retirement.
Encouraging Entrepreneurs with Startup Grants
West Palm Beach's ascent as a hotbed for entrepreneurs can also be traced back to the local government's decision six years ago to encourage business launches by offering start-up incentives. Specifically, James's agency provides Downtown Incentive Program grants to ease the burden of getting new ventures off the ground.
One program offers grants of up to $25,000 to help remodel new restaurants or retail shops in designated downtown areas. Another covers six months of rent (maximum grant: $50,000) for unique boutiques, restaurants and cultural centers that will help diversity the city’s retail base.
The development agency also works with SCORE, a nonprofit affiliated with the U.S. Small Business Administration. It helps entrepreneurs create solid business plans and provides business training and support. All of these efforts are aimed at reducing the stress so common in the first year of operating a business and enhancing insights required to succeed.
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The 50-plus entrepreneurship boom in cities like West Palm Beach is echoing throughout the U.S. these days, as Next Avenue has noted.
In fact, MBO Partners, which manages payroll, benefits and taxes for independent consultants, estimates that 5 million boomers are independent workers — about one-third of America's ovearall 16 million indies.
What's Behind the 50+ Entrepreneurship Trend
Lynn Karoly, a senior economist with Rand Corporation, says the rising tide of older entrepreneurs can be traced, in part, to their ability to procure financing. “Younger workers don’t have access to capital to start a new business," she says. As a result, Karoly adds, "movement into self-employment happens as workers gain more experience in the labor market.”
The technology boom has also made it easier to launch certain types of businesses — such as public relations and consulting — from just about anywhere, including vacation homes in retirement havens like West Palm Beach and Aspen.
3 Business Startup Tips
If you're considering starting a business in your 50s or 60s, Karoly offers this advice:
- Keep your capital investment to a minimum, and try not to deplete too much of your retirement savings.
- Before embarking on a new venture, meet with a financial adviser to determine the best financing strategies and to ensure that you won't be investing too much of your own money or going into too much debt.
- Try to launch a business in a field you already know, rather than venturing off into a sector where you have no experience.
You might also want to join the crowd — and move to West Palm Beach.