We’re working for longer than ever before and it’s almost inevitable that the federal budget will lift the retirement age to 70 by 2035. So what is the government doing to support senior business owners?
So you’re in your late 50s, 60s or beyond, and you thought you’d enjoy easing into retirement. But having all those extra hours to wander the golf course, or to simply do what you want, whenever you want, is losing its appeal. You need something else. You want more of a routine back in your day. You want a challenge. You want to go back to work - but you also want to have more control over your working day, too.
For some people, that means starting a business later in life and realising a long-held dream. After all, you’ve always fancied yourself as a budding Richard Branson and now is the time to make things happen. For others, launching a business at a later stage in life is a necessity due to job loss, job shortages and the ageism that is still rife in many workplaces and industries. For senior Australians facing redundancy – and struggling to find alternative employment in a world that values youth over age and experience – starting a business of their own may be the only viable option.
Whether that business is born out of choice or necessity, the people behind these ventures are part of what the government describes as the ’active ageing’ generation. They are fitter, healthier and focused – and they’re working longer and harder than any generation before them. They could even be a cornerstone of the future economic health of our country. But what is being done to help mature-aged Aussies who want to go into business and contribute to the economy? And what can and should be done to help them turn their business idea into a reality and a success?
By 2054-55 government figures suggest the number of Australians aged 65 and over will more than double, placing huge pressures on healthcare budgets and on demand for aged pensions. In today’s dollars, health spending per person is expected to more than double from around $2,800 to $6,500 per person. Age and Service Pension payments will rise from almost $2,000 per person to around $3,200. This economic time bomb has already triggered discussions on raising the qualifying age for the aged pension to 70.
So could self-supporting senior business owners help ease this burden?
In its 2015 Intergenerational Report, the Treasury notes that ‘the community and economy will benefit from opportunities to support older Australians who want to work’. The document says this could be achieved through policies that support those of us who choose to stay in the workforce and adds, ‘This represents a significant opportunity for Australia to benefit more from the wisdom and experience of people aged over 65.’ There are obvious mutual advantages for senior business owners and entrepreneurs – and for the Australian budget. The longer people work and support themselves financially, the less pressure this places on a stretched government purse.
We can learn some valuable lessons from European Union countries like Finland, Denmark and Germany, where initiatives have been introduced to foster the growth of Baby Boomer business ventures. The European Union is looking at supports such as reducing the red tape involved in starting businesses, providing tax credits to financially help businesses in start-up phase, and providing clearer information to help new business owners to more easily and quickly navigate their rights and responsibilities. Providing access to coaches and mentors with relevant business knowledge, and raising awareness that starting a business is a real and doable option later in life, are also seen as key to fostering entrepreneurship in the Baby Boomer generation. But, as yet, there seems to be much less practical, financial and emotional support for senior Australians wanting to set up a business.
“Seniors don’t only need financial support, they need places where they can network and mix with like-minded people,” says Dr Alex Maritz from Swinburne University of Technology in Melbourne, who is researching senior entrepreneurship in Australia. “Your average 60-year-old probably doesn’t want to go to university or a training course with 30-year-old entrepreneurs because they have a different mindset and a lot of life experience. We need training courses and an ecosystem that makes it conducive for seniors to start businesses and that includes targeted training, tax incentives and networking facilities.”
Some initiatives are in place and are steps in the right direction. National Seniors Australia is supporting research into senior entrepreneurship, and dedicated organisations for potential mature-aged businessmen and women are gradually mushrooming across the states and territories, such as the Global Senior Entrepreneurs’ Network.
Smaller organisations are also springing up state by state. In Melbourne, the Melbourne Seniorpreneurs organisation arranges regular meetings for over-50s hoping to start their own business. Members have a chance to meet other mature-aged men and women who want to go into business and to learn about issues such as how technology can help their new venture.
But much more still needs to be done. In his research, Dr Maritz identifies a number of barriers to seniors going in to business – mainly lack of financial support, lack of information on how to start a business and complexity of administrative procedures. He adds that older entrepreneurs also require ‘unique and specific’ types of support and information that is different from the existing generic initiatives to support potential and new business owners.
Dr Maritz lists communication, media, message and mentorship initiatives as being important. ‘Senior entrepreneurs’ skills may be out-dated, and they may have lower levels of digital literacy,’ he says. He champions the establishment of a senior entrepreneur academy, such as a government-funded institute aligned to a university. It should provide dedicated education and training that can be delivered online and face-to-face, to help mature-aged Australians get a business idea off the ground. “Our research has found seniors want to start a business, they don’t want to sit in a classroom and their preferred mode of getting information is a blend of networking, meeting other people and online,” he says. Life experience, some financial stability and a solid work ethic can go a long way in helping a business succeed. But those watching the growth in older businesspeople also have a few words of caution for those who decide it’s high time to launch that business idea they’ve had in the back of their mind.
“A lot is gained through making mistakes, having business failures and bouncing back – but seniors don’t have as many years in which to bounce back. They have a lot to lose in terms of their savings,” warns Professor Kosmas Smyrnios of the School of Management at RMIT University. “Competition in business extends beyond local or national borders and there are a lot more ‘sharks’ out there, too, so the risk of fraud can be greater. The business ethics you may have been exposed to during your formative business years have changed considerably. You need to weigh up how much you have to lose and the impact that would have, and the potential loss can be more than financial. There is also loss of face and loss of belief in oneself and it can take time to get over those types of negative experiences.”
Research suggests we will see more seniors starting businesses at a time in life when they’d perhaps traditionally be spending more time on the golf course. And it’s a good thing, says Dr Maritz. “There is a growing population of healthy older people with skills, financial resources and time available to contribute to economic activity through extending their working lives.” Dr Maritz adds that seniors going in to business and needing some financial backing may find it harder to get that support. “Your average bank isn’t going to back you,” he says frankly, adding that you should also consider your health and ability to cope with a heavy workload as you get your business up and running. “But the positives outweigh the negatives,” he says. “Research clearly indicates this age group are more than capable of starting new businesses and they do well because they have capital, they have deeper personal networks, they know how to manage and control risk and they have survived the university of life.”
So if you have reached that time of your life and that business idea is still on your mind, or if you’ve survived the upheaval of a redundancy and a new job offer isn’t on the horizon, going it alone in business may be an option. Just don’t rush. Do your homework and seek out mentors. And find business networks and organisations in your area that can give you valuable advice and support, and help you on your way to success and greater financial independence.