The End of Entrepreneurship as We Know It?

Thinning the Ranks

After the boomers are gone, who will start businesses?

In the next 10 to 15 years, entrepreneurial companies could start inching the way of the dinosaur, according to a recent study. The main reason? Boomers are getting older, which means if they don't own a business, they're less likely to start one, and if they do own a business, they'll start seeking ways to get out, explains Todd McCracken, president of National Small Business United, one of the study's sponsors.

In any given year, 9 percent of businesses close, says Richard W. Oliver, the study's principal investigator and professor of management at Vanderbilt University. "They don't necessarily fail," he clarifies. "Sometimes they merge or the business owner retires." Meanwhile, about 10 percent of businesses are start-ups-this 1 percent margin actually keeps the entrepreneurial community growing and thriving. But demographic changes-namely, fewer people in the 25-to-44 age range-could result in an increase in the closure rate by 2 to 3 percent and a corresponding decrease in openings.

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This article was originally published in the September 2000 print edition of Entrepreneur with the headline: The End of Entrepreneurship as We Know It?.

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