PRIME Initiative

Click to download PRIME briefing paper as PDF 295K

ABSTRACT This paper summarises the ways in which the recession has impacted on the older (50+) workforce, comparing ONS data for different age cohorts since August 2008 – the point where the UK was entering recession and marked differences in the impact on these age cohorts started to appear. The data is drawn from ONS Labour Market Statistical Bulletins from October 2008 to February 2010, which provides figures from August 2008 to January 2010.

PRIME has published Generations Forgotten, a study into attitudes to older people as entrepreneurs based on an independent survey of a thousand people.

The study demonstrates the difficulties the over 50s have in finding work as employees, principally because of ageist attitudes - which the over 50s clearly perceive as still rife. And it highlights the key role self-employment plays in making it possible to remain financially independent.

The results also show that there is an interest in self-employment on a huge scale among older people. But government local and national still seems to have a youth-centric attitude to enterprise which is inappropriate in an ageing society.

The survey reveals that there are far more people aged over 50 who are interested in enterprise than generally thought. One person in six in the 50-64 age cohort has considered it. Some 15 per cent of the over 50s polled had already started a business, with 4 per cent starting a business since turning 50.

Clearly self-employment will remain a vital lifeboat for the over 50s for as long as they continue to be discriminated against in the regular job market.

The production of this report has been funded by the Bank of America Charitable Foundation, one of the first fruits a larger ongoing partnership between PRIME and the foundation.

Download full press release (Word)

Download Generations Forgotten report (PDF),

If you are over 50 then you are closer to retirement than most of the population. Even if you have a good 15 or 20 years of work left in you, it is likely that eventually you will want to stop. So what then will happen to the business you have built up - and can it help pay for the next stage of your life?

More than half of the respondents to a recent PRIME mini poll expect to sell their business as a going concern when they are ready to exit the business. A further 16 per cent of the olderpreneurs expect to keep it going by giving it to family or a friend.

Do you expect to eventually sell your business?

• 1. Yes - sell as a going concern 56% (49 votes)
• 2. No - will give away to family / friend retaining stake 15% (13 votes)
• 3. No - will give away to family / friend completely 1% (1 vote)
• 4. No - it will close but with sale of major assets 1% (1 vote)
• 5. No - it will close with sale of some minor assets 3% (3 votes)
• 6. No - it will close with nothing much to sell 22% (19 votes)
• 7. Other 2 2% (2 votes)

Source: visitors to www.primebusinessclub.com

The poll was run on PRIME’s other web site, www.primebusinessclub.com, which provides support for those starting or running a business after the age of 50.

A key finding was that about a quarter of the respondents expect their business to close when they leave. And the great majority of these don’t expect to be able to make much from selling the assets.

So there is a clear split between those expecting to get extra money from the business when they exit and those who don’t. This may be realistic - some businesses are worth something without the founder while for others the founder IS the business. The type of business is critical.

And so is its size. There is a well developed market for selling businesses over a certain size. Papers, notably Daltons Weekly carry classified listing of businesses for sale, and specialist business transfer agents will help with a sale in return for a fee. But once you get below a value of about £250,000 for the business the market gets less interested, and the costs involved in selling start eating into the proceeds.

PRIME is very interested in this process and whether there is anything we can realistically do to help the owners of smaller owner-run and self-employed businesses. Part of PRIME’s charitable mission is “the prevention of poverty in retirement”. Maximising the chances of business owners realising at least some of the value of their businesses when they pack it in would certainly help.

We hope to produce some kind of report or practical guide.

UPDATE: October 2008. We have secured funding to produce a guide, which we hope to do by the end of March 2009. The emphasis will be on producing a practical guide we can distribute free to older business owners. The money comes from the Pensions Education Fund, part of the DWP that we have worked with before. One of the objectives the fund shares with PRIME (and the charity Age Concern that PRIME is linked to) is the desire to improve the way people plan their finances in the run up to retirement. This can sometimes nip problems of later pensioner poverty in the bud.

Though our focus will be on producing a useful guide about what older business owners can do now under existing arrangements, we will take the opportunity to research wider issues as much as we can. Is there any kind of market failure when it comes to realising the assets of smaller businesses? Or is it just inevitable that below a certain size it is hard for market mechanisms to work?  Is it done better anywhere abroad, and if so are their any lessons we could learn? Are there other organisations working on the problem?

If you have got any ideas please contact me through the form below, or email prime@ace.org.uk

Ian Stobie.

The International Journal of Entrepreneurial Behaviour & Research has an article about PRIME in the current issue. It puts information about PRIME and the (anonymised) results of surveys of the people who contact PRIME in front of an academic audience - particularly those interested in the literature on entrepreneurship.

The report was part-authored by Laurie South of PRIME, but the lead author was Professor Teemu Kautonen of the Department of Management at the University of Vaasa in Finland, who is a recognised authority on older enterprise. Dr Simon Down is Senior Lecturer in Management at Newcastle University Business School, and deputy director of the Centre for Knowledge, Innovation, Technology and Enterprise at the University.

The publisher’s abstract and publishing details are below. The paper can be obtained for a charge from Emerald - or via the inter-library loan scheme (generally free to most students and University staff though there may be quota restrictions).

Title: Enterprise support for older entrepreneurs: the case of PRIME in the UK

Author(s): Teemu Kautonen, Simon Down, Laurie South

Journal: International Journal of Entrepreneurial Behaviour & Research

Year: 2008
Volume: 14
Issue: 2
Page: 85 - 101

Publisher: Emerald Group Publishing Limited
Price payable: GBP £13.00 plus handling charge of GBP £1.50 and VAT where applicable.

Abstract: Purpose – The objective of this paper is to examine the potential for and barriers to older enterprise as well as the role and contribution of specific enterprise support policy, focusing in particular on socially disadvantaged older people.

Design/methodology/approach – The paper takes the form of a single case study of the Prince’s Initiative for Mature Enterprise (PRIME) with multiple data sources, including a synthesis of current literature, PRIME self-evaluation reports, interviews with PRIME personnel and results of a recent survey of 283 individuals who had contacted PRIME for enterprise advice and support.

Findings – The paper finds that, with respect to older enterprise support policy, the tentative results presented in this study seem encouraging in terms of a positive social and economic role for older enterprise support work. However, due to the limitations of the data, a number of questions need additional clarification in future research. Longitudinal research designs are required to investigate in more detail the additional social benefits generated by older enterprise support as well as concerns regarding deadweight and over-investment.

Originality/value – The paper brings the experience of enterprise support practitioners into the debate about older entrepreneurship.

Go to article

PRIME and its sister charity PRIME-Cymru have jointly published a report into improving the employment prospects of the over 50s.

“It is worth putting real money behind a drive to re-employ economically inactive over-50s”, says the report’s lead author Christopher Smallwood.

“In order to reintroduce them to the workforce, two things are needed: (1) widespread changes in employers’ practices relating to training, retention and recruitment, and (2) a more proactive approach from Government agencies to help people back to work, particularly in the area of self-employment.”

Some 800,000 people between 50 and state pension age are currently inactive but want to work, according to Smallwood’s analysis of the available data. The UK has a total of nine million people in this age group. At the moment one in three is workless, and one in seven on Incapacity Benefit.

“There is a huge wealth of skill and experience amongst the over 50s that UK business could benefit from tapping into”, says PRIME’s Chief Executive Laurie South. “Not enough is being done to reduce worklessness among the over 50s. Despite an increase in the number in work, the number not working is actually growing - and will continue to grow as the UK’s population ages. So effective government action is sorely needed. ”

“Meanwhile, self-employment remains the best option option for many of the 800,000 individuals eager to work. It’s something you can do for yourself. You don’t have to wait for government.”

You can download the full report and the executive summary from the links below.

“Improving Employment Prospects For The Over 50s”, by Christopher Smallwood and Linda Obiamiwe, published by The PRIME Initiative, January 2008.

Christopher Smallwood is a leading UK economist, and has held a wide range of senior positions in government, industry, banking and media. He is a Member of the Competition Commission, a Trustee of the charity UnLtd (founded to support social entrepreneurs) and until April 2005 he was Chief Economic Adviser to Barclays plc. Previously he was Chief Economist and Strategic Development Director at TSB Group and before that Chief Economist at BP, Policy Director of the SDP and Economics Editor of The Sunday Times.

Some 800,000 people between 50 and state pension age are currently inactive but want to work, according to a new report commissioned by PRIME and written by leading economist Christopher Smallwood.

The majority of new businesses are created by people in their forties and fifties - indeed business owners aged over 50 account for 15 per cent of all business start-ups in England and Wales.

Companies started by older people have a 70 per cent chance of surviving the first five years, compared with only 28 per cent for younger people. Yet the report finds that finance for Jobcentre’s New Deal self-employment programme for the over 50s has been reduced.

“It is worth putting real money behind a drive to re-employ economically inactive over-50s”, says the report’s author Christopher Smallwood.

“In order to reintroduce them to the workforce, two things are needed: (1) widespread changes in employers’ practices relating to training, retention and recruitment, and (2) a more proactive approach from Government agencies to help people back to work, particularly in the area of self-employment.”

The report says that there are still a greater number of complaints about age discrimination in the workplace than about any other form of discrimination. However, the solution does not necessarily lie in more legislation.

What is required, argues Smallwood, is a change in attitudes and practices of employers both in the public and private sector, together with a greater focus on the possibilities for self-employment.

Self-employment also has an important role to play. A self-created job can put an individual back in control of their lives and build on the skills, experience and knowledge acquired over a life-time.

However, for people coming off benefits some significant poverty traps remain that make test trading difficult. “The confusion with HMRC needs to be resolved very quickly”, says Smallwood. At the moments it’s “confusing even to the advisers trying to explain the system”.

Smallwood report full text

Smallwood report executive summary

Christopher Smallwood is a leading UK economist, and has held a wide range of senior positions in government, industry, banking and media. He is a Member of the Competition Commission and until April 2005 he was Chief Economic Adviser to Barclays plc.

PRIME has published “Encouraging older entrepreneurship” a report on how best to help older people starting or running their own businesses. It looks into the support needs of those entering self-employment after the age of 50, and at what PRIME and its partners can realistically do to help.

The study coincides with an unusual period of turmoil in the business support sector. Major changes in how support is funded and who provides it have unintentionally created new difficulties to individuals seeking to start their own businesses.

The production of this report, written in-house by PRIME, has been partially-funded by the Equal Diversity in Practice project, which is in turn paid for from the European Social Fund.

About a quarter of the people who have contacted PRIME over the last two years kindly filled in a form giving some details about themselves. The responses have now been analysed and here’s what you told us.

The results were independently analysed for PRIME by Professor Mark Hart from Kingston University Business School.

The purpose of this kind of formal monitoring exercise is twofold. Firstly it re-assures our supporters that PRIME, a charity, is reaching the people it should be reaching. And secondly it enables us to spot gaps where we should be doing more.

Of course this isn’t the only way we get feedback. Indeed, you are very welcome to email us at any time or post comments in the forums.

PRIME has published a report called Olderpreneur Outcomes. It looks into what happened to people aged over 50 who contacted PRIME about starting in business.

The report is based on telephone and email polling of 283 people, the vast majority of whom were interviewed by phone. All had originally contacted PRIME between October 2003 and May 2005.

The good news is that 43% had gone ahead and started a business, 30% were still considering it - and only 27% had given up.

People contacting PRIME turn out overwhelmingly to be aged in their 50s. Only 15% of the respondents were people in their 60s or 70s. This is reflected in the business outcomes, with most (84%) of the people starting businesses being in their 50s too.

However, it does appear that the older people are when they contact PRIME the more they are prepared to get on with it and start their business, and the less inclined to delay. Once on the route, the older olderpreneurs are more likely to see it through. Though this runs counter to expectations if one is used to thinking in terms of enterprise being a preserve of youth, from the responses to this study, it appears to be true.

Also running counter to expectations were differences between the genders, which were more marked than we expected. Women take longer setting up their businesses, but once started on the process may be just as likely to eventually establish an enterprise as men. However, interest in starting a business seems to drop off more rapidly for women than men, with very few women in their 60s and 70s even contacting PRIME.

This means that despite womankind’s greater longevity, most olderpreneurs will turn out to be men. Of the 121 respondents to this study who had gone ahead and started their own businesses, 85 - that’s 71%, were male and 35 (29%) female. We think that the earlier state pension age for women probably plays a big role here, removing some financial pressure from women earlier (although women are more likely to have a lower pension than men) and perhaps reinforcing expectations that women in their 60s should not work.

PRIME has published “Franchising for the over 50s - a PRIME report and guide”, which is available for free download from the link below. The report is based on interviews and polls with over 1,000 people, and contains 10 detailed case studies of people who have gone ahead and taken up a franchise.

The guide explains what franchising is and its pros and cons from the potential franchisee’s perspective. Particular attention is paid to issues that affect older potential franchisees, and there are checklists of key points to watch out for, along with contacts for further information and advice. There’s also a full glossary of all the jargon you are likely to encounter.

The research side of the report explores people’s experience and perceptions of franchising, based on polls and interviews with existing older franchisees, those currently actively considering franchising and the general public. Business advisers in PRIME’s network also give their views, mentioning both the good and bad side, and any particular pitfalls people should watch out for.

Download full report (204 pages, 835K PDF)
Download just executive summary

The report was commissioned as part of the Equal CREATE project, and
funded by the European Social Fund of the European Union.

Using government data, PRIME has analysed 50+ self-employment in the English regions. Towards a 50+ Enterprise Culture: a PRIME report highlights the enormous potential for growth in 50+ self-employment.

It also expresses concern about the financial, social and welfare dangers if over one-third of the 50-64 age group remain outside the economic mainstream.

PRIME is a charity linked to both Age Concern and The Prince’s Trust. The report concludes with a number of key recommendations that will enable the growth of more of an enterprise culture for 50-, 60- and even 70-somethings.