Canada’s seniors are showing off their entrepreneurial spirit by being the main drivers of the small business sector according to a new report.
Bucking the traditional trend of ‘sliding into retirement, more and more of Canada’s Baby Boomers – and particularly the ‘empty nesters’ – are choosing to run or start businesses. With small businesses vital to the Canadian economy, the contribution made by older business owners is highlighted in a new report from RBC; 42 per cent of business owners are boomers compared to 24 per cent that are owned by millennials. Canadian seniors also give more money to charity than any other age group according to a Canadian retirement home provider.
So why are Canadian seniors not taking it easy in their retirement years?
The poll found that around half of those that have started or thought about starting a business want to continue using their experience and, importantly, supplement their retirement income.
‘Seniorpreneurs’ is the term being coined for this quickly growing group of older Canadians who are choosing to work beyond the traditional retirement age of 65 — some as a financial necessity, others because they simply aren’t ready to call it quits.
A pilot program specifically designed specifically for senior entrepreneurs in Oshawa, Ontario, tested the waters to see whether Canadian baby boomers not only want to keep working but also desire to be their own bosses.
The answer, according to program creator Pramilla Ramdahani, is a resounding yes. Ramdahani launched the Seniorpreneur Program 4 Innovation, Creativity, and Entrepreneurship, or SPICE, and received 75 applications for the 60 positions it offered in its first cohort in 2018-19. Ramdahani says ageism was a big factor in creating a seniors-specific program. She says nearly all of the pilot participants identified ageism in the workplace or in applying for jobs as part of their reasoning for looking for an alternative.
“Hence, they really want to create their own jobs,” said Ramdahani. According to Statistics Canada, nearly 15 per cent of Canadians 65 years and older are still in the workforce, compared to around 6 per cent 20 years ago — and their entrepreneurial spirits are certainly strong.
Through the first round of the seniors’ entrepreneur program, Ramdahani found a massive hole in terms of funding to support the senior entrepreneurs, including limited grants and loans for their businesses.
“There is zero support,” said Ramdahani.
She wants the next federal government to prioritize funding for seniors’ entrepreneurial endeavours, and she hopes to secure other private funding as well to help her expand the program from 60 participants to 1,000 over three years.
“The individuals in the program have been sitting on these ideas for about 30 to 40 years, so now is the time for them to unleash,” said Ramdahani.
For some Canadians, actually retiring at age 65 isn’t a reality, simply because of a lack of pension or savings. A 2018 survey by Sun Life Financial even found that a quarter of retired Canadians are still in debt in their golden years. Hence the need for income is providing the impetus they need to take the leap into entrepreneurship.
Some future retirees may continue to be short on savings, as Statistics Canada data shows that the household savings rate has fallen from a high of 21.6 per cent of net disposable income in 1982, to 1.7 per cent in the second quarter of 2019.
Lower interest rates could be one of the reasons for saving less, according to BMO Capital Markets economist Robert Kavcic, because the returns on savings are smaller and borrowing at low rates is tempting. So whether for reasons of practical necessity or simply a case of meeting the need for ongoing income, Canada’s seniors are a driving force to be reckoned with in small business.
“The future looks bright for the Canadian economy, which is predominantly driven by small businesses” said Lori Darlington, Vice-President of Small Business and Strategic Partnerships, RBC. “Canadian boomers are incredibly entrepreneurial. Many are turning their passion projects into new ventures and leveraging their extensive experience to fuel today’s small business economy. At the same time, their spirit and leadership is surely inspiring the next generation of aspiring millennial entrepreneurs to build on the momentum.”