'Senior Startups' contribute more than £24.4 billion to the UK economy - 25 October 2007
Enterprising over 50s who decide to go it alone by setting up their own businesses are contributing a staggering £24.4 billion* to the UK economy per year, according to new research** released today by Yellow Pages directories.The research, analysed by Kingston University’s Small Business Research Centre, delves specifically into new businesses established by older entrepreneurs and shows the group are becoming a powerful force within UK plc. It identifies an emerging group of Senior Startups (business owners aged 50+ who have set up in the last five years) who account for approximately one in six (16 per cent) fledgling businesses in the UK each year.
The study was commissioned to coincide with Yellow Pages’ sponsorship of the Startups Awards Silver Fox category – an accolade that recognises and rewards successful startups that have inspirational over 50s at the helm. It reveals interesting insights into the motivations of this group, who are taking the plunge into enterprise later in life and reaping the benefits of being their own boss using their experience, knowledge and self-confidence to get ahead in business.
According to the study:
- Senior Startups turn over an average £67,500 per year and tend to work alone, from home
- Most Senior Startups (61 per cent) regret not having set up on their own earlier in life, with 44 per cent claiming that they are now happier than they’ve ever been
- Most have no thoughts of retirement and see their business as their pension plan – more than two thirds (71 per cent) want to run their business for as long as they are able
- Businesses within this group tend to be financed by savings – with only 13 per cent funded by bank loans
- The main motivations for starting up a company at this time of life are a desire to do something pleasurable (39 per cent), obtaining a better work/life balance (29 per cent) and not wanting to work for someone else (24 per cent)
Commenting on the research, Mark Hart, professor of small business research at Kingston University and PRIME*** trustee said: “This research adds greatly to our knowledge of the over 50s’ contribution to enterprise in the UK. There is clear evidence that the entrepreneurial activities of this diverse group are capable of providing sustainable incomes as they engage in new business ventures resulting from many years of experience. This is an important finding in the context of a growing reliance upon state pensions by an ageing population.”
Helen Stevenson, chief marketing officer of Yell, publisher of Yellow Pages directories, said: “Our study highlights the crucial contribution over 50s make to the UK economy and demonstrates that Senior Startups aren’t afraid to take a risk by changing career later in life. To help inspire and support future 50 plus startups, we’ve developed a special web site (www.peoplebehindthenumbers/business-advisor.com) to offer invaluable advice and tips to this group of budding business owners.”
Business profile of Senior Startups
For most Senior Startups, business is a lone concern (79 per cent work alone), or their enterprise is kept small and compact with between one and five employees (18 per cent). The majority (82 per cent) work from a home office and one in ten work from a workshop or retail unit. Their average annual turnover is £67,500 per year, although 10 per cent turnover more than £100,000.
| Most popular over 50s startups business fields | ||||
 | | Total % | Male % | Female % |
| 1 | Professional and business services | 22 | 21 | 26 |
| 2 | Retail, hire and repair | 12 | 14 | 14 |
| 3 | IT and Telecommunications services | 8 | 11 | 6 |
| 4 | Arts, sports and recreation | 7 | 7 | 6 |
| 5= | Media and creative services | 6 | 6 | 9 |
| 5= | Construction | 6 | 9 | 0 |
Ambition comes with age
More than one in ten (11 per cent) Senior Startups say they’re more ambitious and motivated than when they were younger, which has attributed to their business achievements. Half (49 per cent) of over 50s startups say that their age and experience has been a key advantage to their business, with 51 per cent claiming that hard work and commitment is what makes their business tick.
Taking a leap into the unknown
Only 16 per cent of those questioned had run their own business before, with 41 per cent having worked in a completely different field before setting up on their own. Confident enough to go it alone, Senior Startups are inspired to take the plunge by family and friends (18 per cent) or work colleagues (17 per cent), with television shows like Dragon’s Den having less impact in terms of influence (10 per cent), despite their popularity.
Freedom and happiness main motivators
The majority of Senior Startups view freedom and happiness at work as much bigger motivators than making money. More than a third of over 50s (39 per cent) said that their reason for setting up on their own was ‘to do something they enjoy’, while nearly a third again (29 per cent) wanted to achieve a better work/life balance. Around a quarter (24 per cent) claim they were frustrated working for someone else but only 12 per cent want to ‘make lots of money’. In fact, only two per cent say they want to create a nationwide business - more than a third (39 per cent) say that their main ambition for their business is to keep it small and ‘niche’.
The gender divide
Women are more likely than men (28 per cent compared to 15 per cent of men) to be prompted to start up on their own following a lifestyle change such as ill health, divorce or moving house. Almost one in five (19 per cent) female over 50s startups were not working immediately before setting up their businesses.
Happier than they’ve ever been
While it’s not all plain sailing for this burgeoning group of SMEs (with challenges such as building up a customer base cited by 48 per cent and marketing their business by 12 per cent), a large proportion of over 50s startups (44 per cent) say that they’re happier working for themselves than they have ever been. Around a third of all respondents (30 per cent) say that they love their work and more than half (53 per cent) say that the key piece of advice they would give to other over 50s would be to ‘go for it’.
To find out more about the study and get advice and tips on setting up a business as a Senior Startup visit www.peoplebehindthenumbers/business-advisor.com.
* Based on 361,800 startups in the UK (businesses aged 0-60 months) run by over 50s. Source: Mark Hart, Small Business Research Centre, Kingston University. (Based on GEM UK and BERR data).
** Ninety startups business owners aged 50-74 (businesses aged 0-60 months) were surveyed by Vanson Bourne in September 2007
*** PRIME is the only national organisation dedicated to helping people aged over 50 to set up in business. They are a not-for-profit company whose aim is to release the untapped potential of 50+ enterprise.
