Late starters needed

Late starters needed

The Prince’s Initiative for Mature Enterprise on why the nation needs older entrepreneurs more now than ever before.

Next year forecasters believe there will be more over 65s in the UK than under 15s for the first time on record.

Such stats do little to calm the already fraught nerves of the nation’s economic controllers. Healthcare and social housing sectors perhaps take the strain of the ageing population.

And then there’s the job market, with recent figures showing that almost four million people aged 50 to 64 are out of work. While healthcare and social housing strategies are left to Westminster and its private sector friends, the answer to the job market’s woes could well be the emergence of entrepreneurial 50-plus-year-olds. That is according to Nick Bunting, CEO of The Prince’s Initiative for Mature Enterprise (PRIME), which champions the cause of start-ups launched in mid to later life.

In these parts – and no doubt every other corner of the UK - entrepreneurial school leavers and twenty something’s are in abundance.

A glance at BQ’s own inbox reveals a constant stream of cup cake making, software designing, event organising start-ups manned by those yet to hit 25. Older entrepreneurs, though, are not so common or maybe just not as visible.

“All of the government initiatives are being predicated on young people,” says Bunting. “If you think about it there are very clear and laudable public policy frameworks for young people. We’ve also seen a really clear policy framework for older people, predominantly around the care sector, but what’s there for those in the middle?”

PRIME’s work, which Bunting says receives little or no government support, involves helping people over 50 who are workless or threatened by redundancy, to become self-employed or captains of their own social enterprises.

“Weirdly we’re the only organisation doing this but we don’t get government funding. When we talk to the government they ask us if we’re working with young people, in education, with elderly people or community programmes. When we say ‘no’, they say they can’t help us.”

But clear evidence of the benefits of PRIME’s work to the economy does exist. The group has had a hand in the launch of 850 enterprises through its crash-courses in business start-up.

That figure is likely to be eclipsed this year, despite what Bunting describes as a “struggle” to generate funding, and by 2014/15 the group expects to be supporting the creation of 1,000 businesses per year.

Using the type of simple maths readily employed by regional development agencies in their heyday, it is estimated that each start-up creates 1.5 jobs in its first year, which in turn creates a quarter of a job indirectly in the supply chain.

All of which represents a fairly decent return for PRIME’s modest running costs. For example, £5,000 provides 20 ‘will it work’ grants to test a business idea, while £50,000 pays for a regional mentoring programme for 150 people.

Some attendees come to PRIME with a fully developed business plan; others are merely there as a last resort having been cut adrift by their public sector department or struggling SME employer.

When they leave, 80% have their own fledgling business. Of those, there is around a 50% chance that they’ll still be trading five years later.

“Generally the over 50 survival rate is better than with young people. I think if you’ve been thinking about something while working for Mr Government or Mr Siemens, you’ve thought about it for a few years. And often redundancy is just the catalyst for doing something for yourself.

“What we try to do is build confidence and competency. Many people [who come to us] maybe ran a small team or were responsible for an area of work in their business. They probably worked with a budget and they’ve certainly worked with administrative procedures. What they don’t realise is how to take that and turn it into the skills needed to run their own business.”

In the North East, where the number of over 65s is projected to rise by 47% between 2004 and 2029, the need for 50+ people to find their feet in entrepreneurialism is made all the more pressing by the disproportionately high public sector workforce.

“Currently there are over 200,000 public sector jobs that have been or are about to be lost and the North East is bearing the brunt of it.”

And, says Bunting, the majority of public cutback victims who arrive at PRIME’s doorstep have no financial nest egg that can be fed into the expense of creating a business.

But there is also a growing number of applicants to its courses that have been thrown into redundancy following the collapse of an SME. Their available start-up savings seem to be equally in short supply PRIME has found.

But a lack of cash is not necessarily the biggest challenge for the older entrepreneur, despite the belligerence directed at banks for a lack of lending to the self-employed.

“There is a whole range of issues that the entrepreneur faces and the over 50s entrepreneur faces all of them plus the other prejudices that come with being older.

“The whole bureaucratic system is predicated against people starting their own business. There’s also a hangover from the days when working for yourself was not seen as a viable alternative to being employed.

“I think there’s also an issue in this country about failure. I don’t know any major successful entrepreneur that’s not had at least one failure in their working life. So it should be deemed as a learning opportunity.”

PRIME runs a number of events and programmes, including some in this region, and overall supports over 6,000 unemployed mature workers every year.

Describing a typical workshop, Bunting says: “We do a brainstorm to explore their thinking about what they do and perhaps how it is institutionalised. We try to build confidence, self esteem and self-awareness. [Their generation] invented the internet, and lived through the transition from an industrial to a service lead nation.

"Many of the people we work with have lived through world wars and two recessions so who says they can’t adapt and change?

“We look at all the good things they’ve done in a wider context. People tend to value their identity on what they do instead of who they are, so we tell them they’ll no longer be an account manager or a branch manager and we look at how we can develop their skills to enable them to do something different.”

Bunting points to an ex-military officer turned bread baker as an example of PRIME’s ability to unearth unexpected career changes. The entrepreneur in question used to make bread as a means to relax between combat. He now has a flourishing business supplying bakeries in his local area.

“Self employment is a big part of the solution that’s just being overlooked,” Bunting says.