The current life expectancy of people in the European Union hovers around eighty. So it stands to reason that after the age of sixty, you would think that you still have plenty of time to build up your own business. Every year in the Netherlands, the Chamber of Commerce registers around nine thousand new entrepreneurs who are over sixty. Innovation Origins spoke with a number of these grey innovative starters and asked them about their reasons for embarking on a new adventure at their age. Over the next week, we are portraying them in a special senior edition of the Start-up of the Day series.
Sixty is the new forty. At that age, you used to prepare yourself for the idle hours of retirement. Companies even used to offer employees in that age bracket courses for dealing with it. And after a working life thanks to early retirement schemes, people over sixty were usually left stuck at home behind the aspidistras. Now, however, the grey wolves are no longer imprisoned in the golden cage of pre-retirement but are setting up new companies.
Research also shows that people over 50 who start their own business are two to three times more successful than those in their thirties. The entrepreneurial over-60s is meanwhile a global phenomenon. In the United States, people between the ages of 55 and 64 make up the largest share of entrepreneurs. Similarly, in Japan, people over 60 now account for more than a third of new entrepreneurs. In Britain, ‘older’ entrepreneurs are responsible for more than a quarter of new start-ups, according to figures from the international research firm Multivu and others.
Many budding entrepreneurs are going into business for themselves. Of the approximately 9,000 new registrations with the Chamber of Commerce, some 8,000 were one-person businesses. Most people over 60 start a company in the business services sector. These are mainly consultancies. The health sector comes in second, followed by the retail trade and construction.
If you start a business, at least you have a purpose again and that keeps your vitality up,” Han van Doorn (84), entrepreneur
The common perception is that people are either ‘coerced’ into entrepreneurship either due to redundancy, age discrimination, or forced retirement, or are ‘pulled in’ by the prospect of business opportunities, potential profitability, greater freedom, and flexibility, according to research conducted by Massey University in New Zealand. Many older entrepreneurs cited personal well-being and altruism as motivating factors in that study.
According to the researchers, the trend toward entrepreneurship among seniors offers both social and economic benefits. On the one hand, meaningful and well-suited work promotes personal well-being. On the other hand, it gives individuals a sense of self-worth, fulfillment and improves their social life.
Take Han van Doorn as an example. He is 84 years old and together with his son, he has developed the app Areyouokaytoday, which sends out an alarm if something happens to a single person at home.
Han finds entrepreneurship ‘fantastic’. It has given his life renewed direction. “At least when you go into business, you have a purpose again and that keeps your vitality up,” Han states. “You have to think of it as a party where you don’t know anyone. When you get talking to someone, they soon ask what you do. Now I have something to talk about again.”
One big difference compared to young start-ups is that, in many cases, seniors are often only partially dependent on income from their business, if at all. In addition to that income, they are already enjoying a pre-retirement plan or have some equity in reserve.
Entrepreneur credit
That is also the reason why they tend not to knock directly on a bank’s door to finance their business. Rabo Bank does see, however, that in the past two years the number of business accounts among the age groups over 56 and over 65 has indeed risen.
“We see no particular risks involved here. This age group has gained a lot of knowledge during their working lives. Not everyone wants to retire from work after reaching retirement age. A win-win situation can also be seen, given the tight labor market. There are insurances that do accommodate the age of the entrepreneur. But this depends very much on the situation,” says spokesperson Eric Lagerweij.
We assess the over-60s just like any other starter,” Eric Lagerweij, Rabobank The Netherlands
It is, the bank argues, no more difficult for over-60s to secure a business loan than for entrepreneurs younger than 60. “We assess them just like any other starter. In fact, the Rabo Bank has the knowledge platform ikgastarten.nl. This platform has been around for over 12 years. There are thousands of articles on it on how to start up as an entrepreneur. So far, there has been no reason for Rabobank to make a distinction between age groups. In our view, the knowledge of what hourly rate to charge when to file a VAT return, what legal form to choose or how to make a business plan is no different for someone aged 35 than it is for a 67-year-old starter.”
Still, more attention should be paid to the older entrepreneur, believes Margreet Drijvers, director of the Platform for Self-Employed Entrepreneurs (Platform Zelfstandige Ondernemers, PZO). The government’s TOZO measure (aimed at struggling self-employed people during the corona crisis in the Netherlands, ed.), for example, did not apply to over-65s who already had their state pension (AOW in Dutch). “While these entrepreneurs are also suffering from the consequences of corona. We succeeded in ensuring that they could at least get a line of credit.”
According to Drijvers, this particular group of entrepreneurs is growing -albeit slowly- simply because of the longer life expectancy of people. She does caution against the risk of seeking self-employment later on in life after salaried employment. “It is quite expensive to pay for that last bit of pension accrual yourself. That can mean that a large part of that income will be lost later on. You really need to take that into account.”
Silver Starters
In spite of this, free enterprise still attracts people in later life. For this reason, Leyden Academy and the Aegon insurance company are organizing the third free entrepreneurship course, Silver Starters, in February, which is specifically aimed at older entrepreneurs who are just starting out. The program runs in four countries and is co-funded by EIT Health and others, a European consortium that aims to promote entrepreneurship and innovation in the field of healthy living and vitality, and aging.
About 100 people took part in the course the previous two times. “The main advantage is, that the participants are all between 50 and 60. You are around like-minded people. The course is online, but they receive intensive personal guidance in the process,” explains Yvonne Koemans of Leyden Academy. There is a great diversity in the type of companies they want to start. But what strikes me is that there are a lot of so-called social start-ups among them. With older start-ups, it is much more about making a difference than making money.”
