Editor’s note: This is the last in a five-part series on starting a business at various stages of life.
Q: What should I consider when starting a company in retirement?
A: Silver entrepreneurs are thriving. In 1997, only 15% of business founders were between 55 and 64. By 2016, that figure was 24%. According to the U.S. Bureau of Labor Statistics, those over 65 are the age group most likely to run their own business. Potential silver entrepreneurs should consider: In what activities might my age be advantageous? How might my age affect the financial structure of my business? How could my business relate to the rest of my well-being as I age?
There are some advantages to changing career trajectory in our late 50s. While it is true that our fluid intelligence, our raw intellectual horsepower, does steeply decline after our 30s, our crystallized intelligence — our ability to apply the lessons we have learned — increases well into our 40s and does not decline until much later.
Second, loath though we are to admit it, our time horizon begins to diminish beyond 60. In later years we will have less time to reap the rewards of investment, and we have less time to overcome short-term troughs caused by mistakes and accidents. Older entrepreneurs might consider businesses and business models which involve lower levels of capital investment and lower fixed overhead.
Finally, it has been widely found that having a strong purpose to life is critical to the health and well-being of older people. Striving for purpose is one of the key driving factors in the trend of encore careers. It should be no surprise that 81% of business owners are happier than they were as employees.
Rather than asking how we can stay forever young, mature employees might ask a different set of questions. What have I learned in my career that might be of value to the next generation? What are the most ambiguous challenges that I have learned to overcome in life? How could I structure my business to lower my risks and allow me to reap shorter-term rewards? How can I apply the wisdom I have acquired to a purpose which engages me and extends my financial security as well as my health and well-being?
John F. McVea is an associate professor in the Schulze School of Entrepreneurship at the University of St. Thomas Opus College of Business.