Over-50 entrepreneurs setting the benchmark

Monday 9 June 2014

Entrepreneurs over the age of 50 make up the majority of owner-managers and are setting the benchmark for the UK self-employed, according to new research.

A study from the Business Growth Programme (BGP) at Cranfield School of Management revealed that many of those heading up their own company in Britain are 50-years and older. Indeed, 54 per cent of owner-managers fall into this bracket, compared to the two per cent who are 30 or younger.

What's more, the over-50 crowd are raising the standard for growth, with the average business growing their revenue by 19 per cent and employment by 21 per cent.

This indicates a rising trend for people of a certain age to become self-employed, whether as a contractor, limited company or sole trader.

The BGP claims the findings fly in the face of the common belief perpetrated by the media that young entrepreneurs are the main drivers of success among small to medium-sized enterprises (SMEs).

Figures are the result of a survey from 171 owner-managers who had attended Cranfield University's BGP over the years.

Among these businesses, revenues have grown over three and a half time quicker than UK GDP growth, standing at 11.5 per cent versus 3.1 per cent.

What's more, job creation has taken place at a rate that is over seven times faster than the economy.

Over the coming year, average revenue growth for these businesses is expected to stand at 22 per cent per annum, with profit growth of 29 per cent. This is in contrast to the 3.6 per cent GDP growth expected for Britain as a whole.

Professor Andrew Burke, co-leader of the research, said: "This first business barometer of owner managers form Cranfield’s BGP programme reveals a much more diverse high performance entrepreneurial base in the UK economy than previously imagined, with most entrepreneurs over 50 and running businesses right across the economy’s industrial base.

"The performance of these businesses over the last year has been exceptional and their expected performance over the next 12 months is expected to continue at this impressive level."

The Professor added that the findings suggest that the entrepreneurial economy in the UK will help to "ensure a broad based recovery across many industries". This will help to fuel job creation and export growth.

Among those surveyed for the research there was a prevalent feeling that core managerial and leadership activities have been the main drivers of growth, as opposed to general improvements in the UK economy.

Vision, strategy, senior leadership, innovation, operational efficiency and sales and marketing were deemed to be among the main drivers of business performance.

The growth of Riviera Travel is testament to this. Michael Wright from the company explained that over the last five years the business has managed to achieve revenue growth of 20 per cent per annum and will be 21 per cent ahead for 2014. This is despite a relatively flat year for travel as a sector and is thanks to "improved distribution, more repeat purchase, additional product and even more attention to product quality".

By Victoria McDonnell

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