77 Percent of Boomers Plan to Operate Home-Based Companies in Retirement
by Amy Zuckerman
The first numbers are rolling in from EONS ongoing Virtual Business and Career Pilot Survey and they are right on target with earlier polls by Yahoo.com and MassIncs Commonwealth Magazine, as well as anecdotal reporting from NEWSWEEKs Boomer Files.
All of these regional and national sources have indicated that a majority of boomers between 60 and 75 percent plan to run home-based, virtual companies of various types when they are in retirement. (The first wave of baby boomers hit 62, the official retirement age, in 2007.) Early data from the EONS survey are right in sync, even a little higher: 77 percent of EONS respondents report plans to run a virtual business from their home in their retirement years.
Its important to note that the survey was promoted for only two days over a mid-December 07 weekend with little explanation and with a tool that was not beta tested properly before being released. Since then, it has sat without much fan fair on the EONS Building a Virtual Company group page, which this author runs to assist EONS members who either want to operate a virtual company or are already doing so. This means they operate a lean, small business that relies on advanced technology. Also, there was no time to add a category for part-time employees.
These factors may have skewed the data. Plus problems with the tool and lack of awareness of its presence mean only 170 EONS members admittedly a small sample -- took the survey as of Jan. 7, 2008. Even so, the consistency of responses with other national polls on this same subject was striking.
For this reason, plans have been underway to post an improved tool on a variety of sites nationwide, including the authors Website at www.a-zinternational.com; at Gen Plus+, which is owned by career coach Wendy Spiegel (another EONS expert who helped design the tool); on THE FUTURE OF WORK site, and on author/expert Joel Kotkins (The New Geography) Website. EONS has been invited to keep the tool live, but was undecided at this writing.
Also, discussions are underway with Michael Goodman, Director of Economic and Public Policy Research at the University of Massachusetts Donahue Institute, regarding development of a scientifically-constructed study of the virtual economy for municipalities, regions, states or the nation to be based on the EONS pilot survey.
OK, so why all the hullabaloo about some survey numbers?
Well, for one, the boomers represent half of the United States work force. Sen. Barack Obama, the charismatic, young Democratic presidential candidate may urge this country to move beyond the boomers in his attempt to attract Gen X, Y and other voters an understandable and even important step, by the way but he can hardly ignore the largest cohort on the globe. As has been documented endlessly, whatever the boomers do sends hiccups at the least -- and often shockwaves -- through any sector they touch, whether thats housing, auto industry, health care or the work force.
Also, its well known and documented that a large percentage of the boomer population has wracked up a huge amount of debt. Many boomers may need to work until they drop. The fact that a number of polls show such a high percentage of the 78 million boomers planning to work out of their homes, or in rental offices, and do this in a virtual fashion over the next several decades, will undoubtedly have huge ramifications for a variety of industries from home construction and repair, to tech companies, Internet service providers, business supply retailers, book stores, Web-based services -- just about anyone serving small businesses.
Then theres the issue of services that boomers like this author need today to operate a virtual company, and will need in the future. To beat a dead horse, we need affordable health care. Yes, the IRS provides a tax deduction for a percentage of health insurance costs for those running a Schedule C, but we still need to ante up the money each month. For this writer thats roughly $540 a month or slightly more than $6,000 a year, not counting the co-pays and visits that arent covered by my HMO plan. All in all, Im probably spending closer to $7,000 a year on health care. And thats for someone without chronic disease. My partner, age 61, is a type II diabetic and his health care costs would be $1,000 a month or more if he was self-employed.
The next most crucial issue facing all virtual company owners, whether they rent or operate from a home office, is Internet connectivity and cell phone service. As Kotkin and other digital economy experts can tell you, cell and high-speed Internet access are hardly ubiquitous, particularly in low population zones where topography makes it hard to get signals or lay fiber optic cable. Rural areas from North Dakota to parts of California, Tennessee to Hawaii and western Massachusetts lack the technology connection they need to build a company.
For example, there are parts of western Massachusetts, particularly in Franklin County and the Berkshires, where virtual company owners report driving 40 minutes into a town to download files, or to get cell service. In the Web 2.0 world the lack of broadband or cell service is the kiss of death to any real business. In Massachusetts, Gov. Deval Patrick is urgently trying to address this issue, but relief is not here yet.
Then theres the fact that boomers spend a lot of money. This is the cohort, despite many of whom are in debt, that has the most disposable income (besides members of the World War II generation still alive and with large-scale assets.) Retailers and manufacturers of all kinds of technology take note: 30 percent of EONS respondents (based on a sample of 114 that answered this section) said they would be purchasing laptop and personal computers, cell phones or smart phones/PDAs in 2008. The breakdown by technology was 35 percent for laptops; 17 percent for PCs and almost 22 percent for cell phones/PDAs.
For all of these reasons and more, data on the virtual company population, which the U.S. Census Bureau does not yet collect, is urgently needed to meet the avalanche of need and yes, opportunities -- that the retiring boomers present. Although the questions posed on the EONS pilot survey are not scientifically designed, they are based on standard journalistic methodology with input from academics. And, no, the means of gathering the data is not scientific, either. But this information at the very least represents the sorts of questions the Census might gather if and when government officials decide to take interest in the virtual work place -- one of the fastest-growing sectors of the U.S. work force as it fits into the self-employed category.
The pilot survey, designed by this author and Spiegel, aims to gather information on several cohorts: boomers employed full-time at this writing; boomers working virtually at this writing, and boomers either in retirement or facing retirement at this writing. These preliminary findings are based largely on 170 respondents, although only 114 people responded to some sections (see below) by the Jan. 8 cut off date when the data was issued to this author.
The following is the collective the data for all 24 questions posed to EONS members at the end of 2007 and into early 2008. Its my intent to present this information to the media, government officials, technology service providers, professionals such as lawyers and accountants, as well as manufacturers/retailers serving the small business population, and others serving the virtual work place:
GENERAL QUESTIONS (170 respondents):
- AGE: Of 170 respondents, 50 percent were between the ages of 49 and 55 (not surprising as this was the largest sector on EONS.com); 26 percent were between ages 56 and 60; 17 percent were between 61 and 65, and there were a smattering of respondents reaching beyond the boomer generation with the oldest age 85.
- GENDER: The majority, or 74 percent of respondents were female and 26 percent were males.
- MARITAL STATUS: Most, roughly 60 percent, were married for a varying number of years; 29 percent were divorced.
CURRENTLY EMPLOYED (170 respondents):
- CURRENTLY EMPLOYED: 62 percent said yes; 38 percent said no.
- UNEMPLOYED AND SEEKING EMPLOYMENT: 12 percent reported they had been seeking employment; 19 percent said they were unemployed, but not seeking employment.
- DURATION OF THE JOB SEARCH FOR THE UNEMPLOYED: 7 percent had been looking for work for one year; 3 percent had been seeking work for between one and two years and almost 4 percent had been seeking a job for more than two years.
- TELEWORKER: 13 percent reported teleworking, meaning they were fully employed and checked into an office at least once a week.
- WORKING VIRTUALLY FOR AN EMPLOYER: Almost 10 percent reported working full-time for an employer, but virtually from a home or satellite rental office.
- WORKING FULL-TIME BUT BUILDING A SIDE BUSINESS: 26 percent of respondents are building a side business while maintaining a day job.
SELF-EMPLOYED (114 respondents):
- SELF-EMPLOYED: 31 percent of the respondents were self-employed; 52 percent were not, and 17 percent said this was not applicable.
- OPERATING A HOME-BASED COMPANY VIRTUALLY: roughly 39 percent reported operating home-based, virtual businesses; roughly 49 percent were not, and 13 percent said this was not applicable.
- RENT OFFICE SPACE: Of 114 respondents to this question, only 5 percent rent space and 82 percent said they do not, while the remainder indicated this was not applicable.
- OWN PROPERTY TO HOUSE AN OFFICE: 29 percent of 114 respondents said yes; 45 percent said no, and the rest said this was not applicable.
- HIRE FULL OR PART-TIME EMPLOYEES TO BACK A BUSINESS (as defined by the IRS): about 95 percent of 114 respondents said no; 5 percent said yes.
- HIRE SUBCONTRACTORS TO BACK A BUSINESS: almost 18 percent said yes; 82 percent said no.
- TECH PURCHASES IN 2008: 30 percent 112 EONS respondents said they would be purchasing laptop and personal computers, cell phones or smart phones/PDAs in 2008. The breakdown by technology was 35 percent for laptops; 17 percent for PCs and almost 22 percent for cell phones/PDAs.
- WOULD ADD A WEB SALES (ONLINE BUSINESS) TO A BRICKS N MORTAR COMPANY: 28 percent of 114 respondents said yes; almost 20 percent said no and the rest were not applicable.
- BUSINESS GOALS OF VIRTUAL COMPANY OWNERS: Of 114 respondents, 30 percent said they were lifestyle entrepreneurs, meaning they want to generate enough revenue to pay the bills and enjoy life; almost 40 percent said they wanted to generate as much income as possible while not operating a large business with employees; roughly percent would build a major corporation, and the rest said this did not apply.
EMPLOYMENT PLANS AFTER AGE 62 (of 114 respondents):
- PLAN TO WORK FOR CURRENT EMPLOYER AS LONG AS POSSIBLE AFTER AGE 62: almost 33 percent said yes; 30 percent said no, and the rest said this did not apply.
- PLAN TO LEAVE A FULL-TIME JOB TO START A RETIREMENT BUSINESS: almost 33 percent said yes; 30 percent said no, and the rest said this did not apply to them.
- PLAN TO OPERATE A HOME-BASED BUSINESS IN RETIREMENT: 77 percent said yes; 12 percent said no, and the rest said this did no apply.
- PLAN TO RENT OFFICE SPACE FOR A RETIRMENT BUSINESS: about 79 percent said no; 6 percent said yes, and the rest answered not applicable.
- WOULD PURCHASE PROPERTY TO HOUSE AN OFFICE: 20 percent said yes; 73 percent said no, and 73 percent said this did not apply.
- BUSINESS GOALS FOR A RETIREMENT OPERATION: 41 percent said they wanted to earn enough to support their lifestyle needs; 38 percent wanted to grow in revenue, but not in employees; 4 percent would build a major business in retirement, and the rest said this did not apply.