What Over-50 Entrepreneurs Say About Going Solo
A survey finds that most who've gone out on their own are glad they did
Message to anyone over 50 thinking about dipping a toe into pool of entrepreneurship: Come on in, the water’s fine.
That’s the takeaway from a fascinating report called the MBO Partners’ State of Independence in America, which surveyed more than 600 baby boomers who are independent workers (defined as entrepreneurs who are contractors, self-employed or on call).
“We found that, generally, the boomers working on their own didn’t enter the world of independence unwillingly, and they enjoy being independent,” Gene Zaino, chief executive of MBO Partners, told me at the What’s Next Boomer Business Summit in Washington.
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 16 million independent workers overall. And Zaino says an additional 1.2 million boomers are likely to join their ranks over the next two years.
What's driving the shift? Zaino cites a variety of factors for the growth in what he calls the "project economy."
He says boomers have a strong interest in staying active, challenged, and valued as well as achieving a healthy work/life balance. It's also never been easier or cheaper to go independent. New technologies, like cloud-based apps and mobile devices, make it a breeze to quickly set up a business and work from anywhere. The same technology makes it easier for employers to find and hire independent workers, when they need them. The average cost of starting a business has been halved, to $5,000, Zaino says.
In addition, employers are increasingly finding that full-time employees come with unsustainable costs, like health care and pensions. This means that opportunities to find full-time jobs at corporations are shrinking and that trend seems likely to continue. The flipside, of course, is that employees with traditional jobs are growing increasingly frustrated by cuts in benefits, rougher work loads and diminishing job security.
Here are the highlights from this "solopreneurs" study:
Most boomers who are independent workers really like being on their own. Some 70 percent are “highly satisfied” with their status as free agents, compared with 58 percent of independent workers overall.
They’re making good money. The average income of boomer independents: $77,000.
They’re slightly more likely to be women than men. Women represent 53 percent of solopreneurs; men, 47 percent.
The vast majority — 84 percent — plan to continue as independent workers over the next three years. Only 8 percent expect to seek a traditional job during that period, much less than the 19 percent of independent workers overall.
Contrary to conventional wisdom, most weren’t forced into working independently because they were laid off. Just 23 percent said they became independent because of a job loss; 59 percent chose to be independent.
What do boomer solopreneurs enjoy most about being independent? Although flexibility is a big plus, so is the chance to make an impact, the survey found.
Before you quit your corporate job, however, be sure you’re prepared for life without a steady paycheck: 55 percent of survey respondents said they’re concerned about having an unpredictable income stream. “Most of their anxiety is about ‘Where will I find the next project?’” Zaino says.
If you're tempted to venture out on your own, ask yourself whether you have the temperament and skills to be an entrepreneur. Not everyone does. Answer the eight questions in Next Avenue’s Self-Employment: How to Know if You’re Cut Out for It, to see if you have what it takes to succeed in America’s independent workforce.