Many entrepreneurs age 45 and older turned to government resources to help their businesses survive the economic crisis caused by the COVID-19 pandemic, according to new research from AARP and the Federal Reserve Bank of New York.
After using data from the Federal Reserve's Small Business Credit Survey to identify trends among older entrepreneurs, AARP conducted in-depth interviews with 25 small business owners over the age of 45 between November 2020 and January 2021.
The discussions revealed that these business owners were resourceful in finding government programs that could offer financial assistance. Eighteen of the business owners had received a federal Paycheck Protection Program (PPP) loan (which could become a grant), six had received a Small Business Administration Economic Injury Disaster Loan (EIDL), and five had secured some other federal, state or local loan or grant.
Most of those interviewed said managing their businesses during the pandemic has been very challenging, requiring them to pivot swiftly in order to stay afloat. In addition to the increased use of teleconferencing technologies such as Zoom and Microsoft Teams to stay in contact with their employees and clients, many of these entrepreneurs also said they have had to launch or upgrade their digital marketing strategies, websites and online sales techniques.
"A lot of small businesses, who have been very agile and been able to make those shifts, I think are going to be well positioned in this new hybrid world that we're going to be in, where people will be coming back into the city center into the offices while there also may be a lot more remote work,” John C. Williams, president and CEO of the Federal
Reserve Bank of New York, said during a March 30 webinar to present the results of the research and promote AARP's Small Business Resource Center.
The resource center is just one of the programs AARP provides to help older adults who may be considering becoming entrepreneurs.
"The reality is four out of five small business owners are 45-plus, and they are among the most successful in the entrepreneurial space,” Nancy LeaMond, AARP's executive vice president and chief advocacy and engagement officer, said during the webinar.
“They come to it after years of experience, they have many contacts, and they've had the benefit of failure and resilience. And they want to bring those skills [to their own businesses], including some of the softer skills."
Entrepreneurs rise to the challenges
Even during the COVID-19 pandemic, there have been opportunities to become a business owner, Williams said.
"We've seen an enormous number of new small businesses being started, so there is an entrepreneurial spirit,” he said. “There are people out there who are looking for the next stage in life or next challenge, and we're seeing them taking those opportunities. I think combined with a better economic outlook, there are some pretty positive trends, [and] the willingness and ability of people to take risks in starting new businesses is clearly as alive today as it ever was."
Some of the small business owners who were panelists for the webinar agreed that the economic difficulties of past year could be overcome.
"The pandemic, it crushed us, but it did not crush the entrepreneurial spirit that makes America great,” said Towanda Livingston, chief business strategist at Livingston Worx, a diversity, equity and inclusion consulting firm. “We did rally around what was important, and that is to save our communities, to save our nation and save jobs, and we did that collectively together."
Another small business executive urged entrepreneurs to be aggressive as they look for resources to help them stay afloat in uncertain economic times. Jan-Le Low, managing partner of the Satay Thai Bistro & Bar in Las Vegas, compared the challenges small businesses faced at the start of the pandemic to the shortages that many Americans encountered looking for household necessities.
"If one PPP lender is not giving you that loan, guess what? Go to another bank, go to another resource,” she said. “Just like toilet paper, we can't just sit there and wait for them to restock the next week, right? So we've got to take our own entrepreneurship spirit and go find the resources, go get the help. Because there are a lot of resources out there."
For some older adults, the decision to start a new business may be driven by the loss of their previous employment as a result of the pandemic.
"We know that if you're older and you lose your job, it typically takes a lot longer for you to get a job than someone else,” LeaMond said. “We know there are a lot of older folks who've been out of the labor market for awhile already. They are probably thinking about what to do if they can't get back into their industry or their job. And [entrepreneurship] is going to be a real opportunity for them." SOURCE: https://www.aarp.org/work/small-business/info-2021/business-owners-surviving-pandemic.html