More baby boomers are looking to start businesses by themselves. Luckily, franchisors can massively benefit from recruiting olderpreneurs as franchisees
Contrary to what stories about flashy startups from London’s Silicon Roundabout may suggest, being an entrepreneur is no longer just a young man’s game. “Over the last decade we’ve seen an entrepreneurial revolution occurring among the UK’s older [people],” says Mike Cherry, national chairman of the Federation of Small Businesses. Indeed, there has been a 140% rise in the number of over-65s starting a new business over the last decade, according to research from Barclays. “[And with] the retirement age due to rise in the next few years [...] we can safely assume that this boom will continue and [that we’ll] see even more older people entering the market,” he says. “This new demographic of business owners will play a big part in driving the UK economy forward.” And if franchisors play their cards right, the rise of olderpreneurs could be stellar news for their franchise networks.
While some may be surprised by the increase of older people launching businesses, it’s really not difficult to see why more baby boomers want to run their own companies. “Many of them have probably reached a point in their lives where they are no longer prepared to compromise their values and beliefs,” says Matthew Levington, co-founder of Business Doctors, the business-management consultancy. “They are tired of boardroom politics, corporate game-playing and toeing the company line.” And with their growing reluctance to simply remain a cog in the machine, more of them are ready to take the step into business ownership. “They’ve come to a stage where they’ve realised that the only way to do things their way is by doing it in their own business,” says Levington.
And compared to many millennial entrepreneurs, olderpreneurs have the financial muscles to more easily realise their dreams. “They have bigger disposable income and fewer things to lose,” says Stewart Butler, managing director of World Options, the parcel-delivery and courier franchise. “They’ve paid off their mortgage, their children are grown up and they’re generally more financially secure.” Additionally, their ability to raise funds to launch a business was improved in 2013 when David Cameron removed the age cap on the government’s Start Up Loans scheme. “That encouraged a whole generation to say ‘I’m not too old for this,’” says Butler.
But regardless of their motivations, baby boomers are hungry for new opportunities. Fortunately, franchising provides a great chance for them to realise their entrepreneurial ambitions without having to do everything themselves. “Someone in their 50s doesn’t have time to build something from the ground up, get all their ducks in a row and put everything in place,” says Butler. “But franchisors have already taken care of it. So franchisees can just crack on with business.” Indeed, while regular startup founders would have to figure out their business model and their branding, franchisees can rest assured that these things have already been taken care of by the franchise through years of perfecting its model. “It’s basically a business in a box,” he says. “They only have to worry about two things: bringing in new customers and retaining them.”
Another reason for olderpreneurs to consider joining a franchise rather than launching a business by themselves is that they don’t have to go it alone. “You’ll have the support of the entire network,” says Butler. Instead of depending solely on their own business acumen, new franchisees can rely on both the franchisor and the other franchisees in the network. “And, no matter how good somebody is, there are times when they need to hear somebody else’s voice, advice and encouragement,” he says.
From enjoying the support of the franchisor to the opportunity to achieve faster results, its safe to say that olderpreneurs greatly benefit from joining franchises. But franchisors have equally strong reasons to recruit franchisees from the baby-boomer generation. “They understand the relationship between hard work and good results,” says Levington. And this understanding of what it takes to grow the business coupled with their experience can have a huge impact on franchisees’ futures. In fact, more than 70% of businesses started by people in their 50s survive for at least five years whereas only 28% of those started by younger people last that long, according to a survey by Age UK, the charity for older people. “They understand that there is no silver bullet or magic wand and that in order to grow the business they have to put the effort in,” he says.
However, that doesn’t mean that there aren’t challenges attached to recruiting older franchisees. Given that olderpreneurs by definition are closer to retirement than younger entrepreneurs, franchisors could worry about them leaving the business after a few years. “But we actually see it as a benefit to us as a franchisor,” says Butler. “Because they’ll build up the franchise and when they come to the age they want to retire or have work-life balance, they can pass it on for their children or grandchildren to take over.” And even if the franchisee’s kids don’t want to take over, the franchisor will still be left with a strong business that a new franchisee can step into. “They could sell the business or they could take a step back and employ a couple of people to run their business and they’ll have a good income coming in week after week and year after year,” he says.
Another challenge to consider is that olderpreneurs may struggle with using technology. “This generation hasn’t grown up with digital technology,” says Levington. “When they left school, computers hadn’t taken that great a role in businesses. And there certainly were no hand-held computers.” Fortunately, franchisors can train franchisees to use the technology and can offer them support while they learn how to do it. “It’s actually a reason why a lot of people buy a franchise because they are aware that technology is one of their weaknesses,” he says.
Despite these challenges, the benefits of having experienced franchisees should make recruiting more mature franchisees a no-brainer for any franchisor. And equally, it’s easy to see why older people would be wise to consider joining a franchise. “You can only play so many rounds of golf and have so many holidays,” concludes Levington. “Starting a business will give you a purpose, enable you to be productive and get out of the house.” And given the rise of olderpreneurs, that’s clearly something many elderly would like.