A few months ago, it was reported that a 17-year-old IT whizz-kid had sold his ‘app’ business to Yahoo for a reported $30m. This seemed to reinforce the view that it was the young technology-savvy who were the entrepreneurs of today. But is this the really the case?
In an interesting article in the Financial Times in April, the journalist, Gillian Tett, pointed to studies which proved just the opposite. Apparently a study in 2004 showed that during the 1990s the most common age grouping for entrepreneurs was 25-34. But a more recent study showed that 34% of budding entrepreneurs were aged 35 to 44 and 29% between 45 and 54. Only 18% were under 34.
But what is not too clear is the reasons for this. So I suggest 4 possibile causes:
Whilst the profile of the ‘model entrepreneur’ would seem to be someone with a fairly high level of tolerance to risk, typical of a younger more carefree person, perhaps those who start businesses when they are very young also fail quickly, and maybe the older take a more cautious approach and test their ideas more carefully ending up more successful because of it;
It was found that quite a few entrepreneurs appeared to have tested out working in a larger environment before making the decision that they wanted to be on their own. So they learned more corporate skills were more savvy about what is involved in running a business;
Maybe the experience of working in the wider sector gave them exposure to many different types of businesses and helped them to generate and nurture their new entrepreneurial ideas.
Perhaps having worked in other sectors gave them the confidence to go out on their own.
So maybe it is true that more new businesses are started by the young, but perhaps the latter have a higher rate of failure and the more successful entrepreneurs are those of more mature years.
If you are thinking about starting up, take a look at our Business Startup services.
Keith Graham – Managing Partner
Westbury Accountants and Business Advisors is an accountancy practice based in London. Westbury have been providing Accounting and Tax solutions to small and medium sized businesses since 1936. Talk to the team at Westbury on 0207 253 7272; or visit http://www.westbury.co.uk.