Survey Finds Most Americans Want to Start a Business Rather Than Retire

The dream of owning a business in retirement

The Inside Small Business Survey showed that of all retirees chasing the entrepreneurial dream, 54% said the idea of succeeding and finding pride in their business is what excites them most. [Read related article: How to Start a Business: A Step-by-Step Guide]

Community also mattered to most respondents. According to researchers, 70% of those polled said they would support a small business if one opened in their community. Approximately 83% of small business owners said they would do the same. Convenience (46%) and quality of the goods and services provided (45%) factor into whether respondents would support a mom-and-pop store versus a major retailer.

Tim Davis, president of The UPS Store, said the survey’s findings in this area showed that most small business owners “really want to help new business owners in their communities succeed.”

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Potential obstacles

As with any major life decision, outside forces can get in the way of starting a business. For more than a decade, many Americans have been reluctant to set up shop at their own expense, thanks to the recession in 2008 and subsequent volatility in the marketplace.

According to researchers, the biggest hindrance to starting a small business is fear. In the Inside Small Business Survey, respondents identified concerns about financial security (40%), financial commitment to the business (35%), and fear of failure (35%) as their major roadblocks. Participants also shared the top expenses they were most worried about, pointing to basic operating costs (54%) and supplies and equipment (50%). Nearly 25% of those polled said shipping expenses would worry them. 

It’s also unclear whether or how these fears have been impacted by the COVID-19 pandemic, as the survey was conducted before the widespread business closures and economic shutdowns prompted by the spread of the coronavirus.

Embracing new technology

While the economy and financial stability remain points of worry for some entrepreneurs – especially following the coronavirus pandemic and recent shutdowns – the adoption of new technology is not one of them.

Nearly 64% of Americans said they believe artificial intelligence tech, like that found in autonomous machines or automated customer support, will be a boon to businesses in the future. Further bucking the conception that workers view automation as a threat, 69% of respondents said they believed automation was a good thing for small businesses.

Among small business owners, the excitement for artificial intelligence and automation only grows. According to researchers, 74% of small business owners polled said they believe AI will be helpful, while 78% said they believe automation would also be a major benefit.

“Surprisingly, Americans are far from fearing automation and artificial intelligence when used in small business settings,” Pittaway said. “They see technology as a helping hand, providing tools and apps that make their day-to-day activities more efficient and seamless.” [Related: What a 401(k) Plan Is and How to Choose One]

Finding financial success in retirement 

Between COVID-19 hitting the U.S. and a new administration coming in, millions of Americans have seen their finances change drastically over the past 12 to 24 months, affecting their retirement plans as a result.

Many Americans have responded to these changes by rethinking their career paths, taking time off or switching to freelance or independent work. Others have decided to exit the workforce entirely and retire early.

Nevertheless, a multitude of Americans leaving the workforce today still contemplate taking their work into retirement, either by contracting or starting their own business. In many cases, this approach proves beneficial. 

For example, extending your income into retirement delays the need to draw down retirement account balances, or it can help tide you over until you reach age 70 and can maximize your Social Security benefits. 

Some couples choose to file and suspend their Social Security benefits so that one spouse can start receiving benefits while the other continues working, even in a part-time or self-employed capacity. 

After all, by the time most Americans reach retirement age, they’ve mostly settled into an established lifestyle and defined spending habits. Most people have paid off their homes and other debts by the time they reach retirement. As a result, starting a business can let you focus on a passion project or earn a small amount of extra income that goes a long way.

Dock Treece contributed to the writing and reporting in this article.