During the 2018-19 holidays ProPublica published an article titled, “If You’re Over 50, Chances Are the Decision to Leave a Job Won’t be Yours.”*Let’s start with some highlights from the article:
- While there are stories about individuals and their situations, most of the facts come from a study started in 1992 that’s been tracking 20,000 people, especially when they hit age 50.
- By 2016, 56% of these people had been laid off or left under such circumstances it was evident they were pushed out (forced retirement).
- Only 10% of them earn as much as they did before they lost their job with most suffering big money losses.
- In 2018 there were 20.7 million people laid off. Older, more experienced people have their experience held against them and one-third of those in their 50’s lose two or more jobs.
- While layoffs hit all age groups, those over 50 suffer the most as they don’t get hired as often or as fast as younger job seekers.
- There is less government oversight to prevent age discrimination. (I’ve written about this before as my dad was part of a group layoff of people over 50 and they won a class action lawsuit to get their jobs back. The company lost a group of loyal, I’ll do-what-it-takes employees for bitter, I’ll go-through-the-motions employees).
There are a lot more statistics in the article, but you get the drift. So, what are the alternatives? Given what our business focuses on, the buying and selling of businesses, you can bet that’s one of the alternatives, but not the only one.
First, it’s easy to say, “Take control of your life and get your own business.” But it’s not that easy and it’s not for everybody. It takes capital (or other household income), the right skills, and guts. The last point isn’t meant to diminish people who don’t have the desire or fortitude to own their own business. As I write in Buying A Business That Makes You Rich, my mother was a college level teacher who couldn’t imagine anything riskier than a government paycheck every month. She just didn’t have the risk tolerance.
An option besides business ownership is to work for a small to mid-sized business. While the pay and benefits don’t always match what one can get from a large corporation, there’s a lot more flexibility and good people are highly valued. I’m not just saying this; I see it. Owners regularly tell me about the long-tenured employees they have (caveat: if many of those long-tenured employees are in their sixties buyers get scared about too much institutional knowledge walking out the door in the near future, which is why all businesses need expertise spread out over all age ranges).
When it comes to business ownership, there are three, and only three, ways to get into business. You can start a company (and this includes consulting or advisory work), buy a franchise, or buy a (mature, profitable, and fairly priced) business. Buying a business is for those people who:
- Are fed up with working for someone else.
- Don’t have the creative juices to come up with an idea for a new company.
- Have honed their management skills so, to varying degrees, they can manage people, processes, money, and systems, with an emphasis on people.
- Have the money, or access to it, to fund a down payment (the bank and the seller will finance the rest of the deal).
Then it’s a matter of why, as in, what do I want to get out of business ownership? Many people think money is the prime motivator, and it is for some, especially those tied to private equity, search funds, or similar. But from asking hundreds and hundreds of audiences, here are the reasons I hear the most (and they’re on page one of my book):
- Reap the benefits of my smart and hard work
- Decision authority
- Income potential
- Equity or net worth
- So I can be the boss
To give away my punch line, the top reason should be to have fun. To enjoy what you’re doing – it’s your business after all – because of all the above reasons.
Notice the common thread in the above; control, independence, decision authority, be the boss, and creativity (to solve customer problems not as in starting a business) are all about the same. Business buyers want to do things their way, pure and simple. No big boss in Pittsburgh micro-managing their numbers every week. No corporate ladder peers (or employees) doing whatever it takes to advance, with no thoughts of ethics or integrity. No risk that once you’re making “too much” money you’ll be replaced with someone half your age and one-third your salary (see above).
For most people, the concept of working the same job for 40 years or more is a foreign concept. If you’re not in government or quasi-government (think Boeing) you’re going to have multiple jobs. Some by your choice and some by your employer’s choice. Heck, friends in their 50’s at Microsoft feel (know) their days are numbered. For some, business ownership is a way out of this trap.
Next, I’ll cover what exactly is the American Dream and how it’s been changing over the years.
* Thanks to Jeff Levy for making me aware of the ProPublica article.