'Encore entrepreneurs': Older Americans start businesses with social impact
Not all entrepreneurs are kids in college dorms. A generation of baby boomers want to start businesses that will serve real needs.
Our sputtering economy needs workers with more of that entrepreneurial spirit. Think tank Civic Ventures suggests they might come from an unexpected demographic: workers who are approaching middle age or their retirement years.
The group found that 1 in 4 Americans between ages 44 and 70 wants to build an enterprise – and nearly half of them want it to be a business with a strong social impact.
Might late-in-life entrepreneurs have the experience to be successful in the business and social sectors simultaneously? With help, yes, posits Civic Ventures, which focuses on baby boomers, work, and social purpose.
To support these second-stage entrepreneurs, Civic Ventures annually awards 10 individuals over the age of 60 with "Purpose Prizes" that include top grants of $100,000 for recipients to invest in their business and social organizations.
These so-called “encore entrepreneurs” are challenging the convention that the second half of life should be spent playing endless rounds of golf, jokes Randal Charlton, a 71-year-old entrepreneur and Purpose Prize recipient.
“Not all entrepreneurs are kids in college dorms, eating Ramen noodles, working through the night,” Charlton says. “There’s a generation of baby boomers who want to start businesses too. We have to give them tools to do so.”
Until recently, Charlton was the executive director of TechTown, an incubator that supports other encore entrepreneurs in the Detroit-area, a city that he says “began decaying ahead of the rest of the country.”
Earlier this year, the Kauffman Foundation reported that this bracket of entrepreneurs (between ages 55 and 64) saw a significant increase on the “Index of Entrepreneurial of Activity” in the last two years.
Civic Ventures’ new report determined that encore entrepreneurs are seeking small amounts of capital, about $50,000 or less, to launch their ventures.
“This is small-scale, local, almost personal entrepreneurship, not tech IPO or paradigm-shifting social entrepreneurship,” says David Bank, vice president of Civic Ventures. “These businesses require little start-up capital, produce modest but respectable income, and serve real and demonstrated needs with proven business models. People really can create their own jobs.”
Since 2007, Charlton has led the Detroit-based business incubator, TechTown, which transformed an abandoned auto plant into a hub for new businesses. The building now houses over 250 enterprises, a dozen of which have turned a profit in the last two years, and several others that are on the cusp of doing so. They range from mom-and-pop corner shop ventures to stem cell innovators.
Charlton, a serial entrepreneur himself who’s started 14 companies, is less concerned with the bottom line and more with the “moral compass” of companies, encouraging them to consider social impact as well as profit. He is now the leader of BOOM!, a Tech Town affiliate focused on supporting older entrepreneurs like himself.
Residing in recession-stricken Detroit, he sees the aging baby boomer generation as an asset, not a liability for the American economy.
“We can see this aging population as an economic problem or as the economic solution,” he says. “I think they can be part of the solution. We’ve just got to help them ‘shift gears,’ retrain them, and help them apply all their years of experience to something new.”
That’s what BOOM! will try to do by having a “mall of experts,” who can guide encore entrepreneurs with programs and workshops that will help them restructure their past experiences for a new business.
For Charlton, it’ll be a natural extension of TechTown.
While Charlton will address the Detroit community, Civic Ventures hopes to spur more national awareness of this untapped segment of the population.
“We hope to catalyze relationships and training that may be useful in order to help people turn their aspirations into action,” Bank says. “We’d like to see more mentorship programs for entrepreneurs, more community college courses on starting a nonprofit, more fellowships that can give people an understanding of the nonprofit sector, better financing options for encore entrepreneurs,”
Published in partnership with GOOD
• Sign-up to receive a weekly selection of practical and inspiring Change Agent articles by clicking here.