[Senate Hearing 113-898]
[From the U.S. Government Publishing Office]




                                                         S. Hrg 113-898
 
                       IN SEARCH OF A SECOND ACT:
                     THE CHALLENGES AND ADVANTAGES
                       OF SENIOR ENTREPRENEURSHIP

=======================================================================

                             JOINT HEARING

                               BEFORE THE

                       SPECIAL COMMITTEE ON AGING

                                AND THE

            COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP
                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             WASHINGTON, DC

                               __________

                           FEBRUARY 12, 2014

                               __________

                           Serial No. 113-18

         Printed for the use of the Special Committee on Aging
         
         
         
         
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             U.S. GOVERNMENT PUBLISHING OFFICE 
49-910               WASHINGTON : 2023
        
        
        
                       SPECIAL COMMITTEE ON AGING

                     BILL NELSON, Florida, Chairman

RON WYDEN, Oregon                    SUSAN M. COLLINS, Maine
ROBERT P. CASEY, JR., Pennsylvania   BOB CORKER, Tennessee
CLAIRE McCASKILL, Missouri           ORRIN G. HATCH, Utah
SHELDON WHITEHOUSE, Rhode Island     MARK KIRK, Illinois
KIRSTEN E. GILLIBRAND, New York      DEAN HELLER, Nevada
JOE MANCHIN III West Virginia        JEFF FLAKE, Arizona
RICHARD BLUMENTHAL, Connecticut      KELLY AYOTTE, New Hampshire
TAMMY BALDWIN, Wisconsin             TIM SCOTT, South Carolina
JOE DONNELLY, Indiana                TED CRUZ, Texas
ELIZABETH WARREN, Massachusetts
                  Kim Lipsky, Majority Staff Director
               Priscilla Hanley, Minority Staff Director
                              ----------                              

            COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP

                 MARY L. LANDRIEU, Louisiana, Chairman

CARL LEVIN, Michigan                 JAMES E. RISCH, Idaho
MARIA CANTWELL, Washington           DAVID VITTER, Louisiana
MARK L. PRYOR Arkansas               MARCO RUBIO, Florida
BENJAMIN L. CARDIN, Maryland         RAND PAUL, Kentucky
JEANNE SHAHEEN, New Hampshire        TIM SCOTT, South Carolina
KAY R. HAGAN North Carolina          DEB FISCHER, Nebraska
HEIDI HEITKAMP, North Dakota         MICHAEL B. ENZI, Wyoming
EDWARD J. MARKEY, Masschusetts       RON JOHNSON, Wisconsin
CORY A. BOOKER, New Jersey
                                CONTENTS
                                

                              ----------                              

                                                                   Page

Opening Statement of Senator Susan M. Collins, Ranking Member....     1
Opening Statement of Senator Mary L. Landrieu, Chairman, 
  Committee of Small Business and Entrepreneurship...............     3
Opening Statement of Senator Bill Nelson, Chairman, Special 
  Committee on Aging.............................................     4

                           PANEL OF WITNESSES

Tameka Montgomery, Associate Administrator, Office of 
  Entrepreneurial Development, U.S. Small Business Administration     4
W. Kenneth Yancey, Chief Executive Officer, SCORE Association....     5
Conchy Bretos, Chief Executive Officer, MIA Senior Living 
  Solutions......................................................     7
Elizabeth Isele, Co-Founder, Senior Entrepreneurship Works, 
  (accompanied by Dr. Greg O'Neill, Director, National Academy on 
  an Aging Society)..............................................     9

                                APPENDIX
                      Prepared Witness Statements

Tameka Montgomery, Associate Administrator, Office of 
  Entrepreneurial Development, U.S. Small Business Administration    26
W. Kenneth Yancey, Chief Executive Officer, SCORE Association....    28
Conchy Bretos, Chief Executive Officer, MIA Senior Living 
  Solutions......................................................    30
Elizabeth Isele, Co-Founder, Senior Entrepreneurship Works.......    32

                        Questions for the Record

Tameka Montgomery, Associate Administrator, Office of 
  Entrepreneurial Development, U.S. Small Business Administration    39
W. Kenneth Yancey, Chief Executive Officer, SCORE Association....    40
Conchy Bretos, Chief Executive Officer, MIA Senior Living 
  Solutions......................................................    41
Elizabeth Isele, Co-Founder, Senior Entrepreneurship Works.......    42

                       Statements for the Record

Statement of Senator Mary L. Landrieu, Chairman, Committee of 
  Small Business and Entrepreneurship............................    47
Statement of Senator Bill Nelson, Chairman, Special Committee on 
  Aging..........................................................    49
S.1454, the Empowering Encore Entrepreneurs Act of 2013..........    50
AARP Statement...................................................    56
AARP, Letter of Support, Empowering Encore Entrepreneurs Act of 
  2013...........................................................    60
Greg O'Neill, Ph.D, Director, National Academy on an Aging 
  Society at The Gerontological Society of America...............    61


                     IN SEARCH OF A SECOND ACT: THE

                       CHALLENGES AND ADVANTAGES

                       OF SENIOR ENTREPRENEURSHIP

                              ----------                              


                      WEDNESDAY, FEBRUARY 12, 2014

                               U.S. Senate,
                        Special Committee on Aging,
          Committee on Small Business and Entrepreneurship,
                                                    Washington, DC.
    The committees met, pursuant to notice, at 10:01 a.m., Room 
562, Dirksen Senate Office Building, Hon. Bill Nelson, Chairman 
of the Committee, presiding.
    Present from the Special Committee on Aging: Senators 
Nelson, Casey, Collins, and Scott.
    Present from the Committee on Small Business and 
Entrepreneurship: Senators Landrieu and Risch.

                 OPENING STATEMENT OF SENATOR 
                SUSAN M. COLLINS, RANKING MEMBER

    Senator Collins. Good morning. With the Chairman's very 
kind permission, I am going to convene our hearing.
    We do expect to have a series of votes later this morning, 
so we want to make sure that we have ample time to hear the 
testimony from our great panel of witnesses.
    I am very pleased that the Chairman has been able to put 
together this joint hearing with the Senate Small Business 
Committee, and we have just been joined by the Chairman of that 
committee, Senator Landrieu, who is Chairman for a few more 
hours, I think, before she changes committees and Senator 
Cantwell becomes the Chairman of the Small Business and 
Entrepreneurship Committee.
    I am also very pleased to welcome my colleague from South 
Carolina, who has been a terrific member of the Senate Special 
Committee on Aging, Senator Scott, so, thank you for being here 
with us today.
    Again, our Chairman, Senator Bill Nelson from Florida, will 
be joining us shortly.
    Our nation's heritage as the land of opportunity owes much 
to the hard work, energy, and optimism of those who take the 
risk to start up businesses of their own. Through their 
success, they help to create a better life for themselves and 
to create jobs for others. The role played by America's small 
businesses in creating jobs and opportunity is well known, but 
the role played by America's seniors may come as a surprise.
    Individuals between the age of 55 and 64 make up the 
largest percentage of new business owners in the United States, 
and moreover, this has been true for decades, even at the 
height of the dot-com boom. Twice as many new businesses were 
founded by those over age 50 than by those under age 25.
    Most seniors do not want to spend their retirement just on 
leisure, and many simply need to earn extra money to help make 
ends meet. Seniors often have advantages that make them 
excellent entrepreneurs, such as their life experience and real 
world education and the networks that they have established and 
maintained throughout their work careers. Let me give just a 
few examples from my home State of Maine to illustrate these 
points.
    Bruce Bohrmann from Yarmouth spent his career in the 
catalog business and as an advertising manager for a Maine 
bank. As a hobby during his work years, he also created high-
quality custom made knives in his own small machine shop. After 
he retired, with the help of SCORE, a terrific program run by 
the SBA that taps into the skills of retired business owners, 
he was able to turn his hobby into a full-time job and now 
sells his knives to customers around the world.
    Dana Saucier from Wallagrass, Maine, spent 28 years at 
International Paper. When he retired, he and three colleagues 
started a small consulting firm to help other entrepreneurs get 
their businesses off the ground. Dana said the great thing 
about running your own business in retirement is that you can 
work as much or as little as you want and still make a 
difference in the world. By choice, much of the work Dana does 
is now pro bono.
    Martha Muldoon from West Buxton, Maine, lost her job when 
she was 64 years old. But she picked herself up and got back in 
the game by starting her own public relations business, calling 
on skills she had used earlier in her career. Now she works out 
of her own home, on her own schedule, directing the marketing 
for Coffee News, the world's largest weekly restaurant 
publication.
    Seniors like these Mainers have become successful 
entrepreneurs not only through their hard work, but also with 
the assistance of experts at SCORE and with the support of 
programs run by the SBA. I was telling the SBA's 
representatives today that other than being a United States 
Senator, my favorite job was when I was Regional Administrator 
of the Small Business Administration in New England and saw 
firsthand the difference the SBA could make. I am particularly 
pleased that they are represented here today.
    I am also absolutely delighted to see Elizabeth Isele at 
the witness table this morning. Elizabeth is a knowledgeable 
and tireless advocate for senior entrepreneurship, and just as 
important, she hails from the great State of Maine.
    Again, Chairman Nelson and Chairman Landrieu, thank you for 
calling this important hearing. I appreciate the Chairman's 
staff telling me to proceed. I did not want him to think I had 
done that without permission. I look forward to hearing from 
our witnesses on how SBA and other assistance programs can be 
even better tailored to help seniors start up businesses and 
create good jobs for themselves and for others.
    Thank you, Mr. Chairman and Madam Chairman.
    Chairman Nelson. Thank you. You all may be surprised that 
Senator Collins and I actually run this committee together.
    Senator Landrieu, Madam Chairman, and congratulations on 
being Madam Chairman of the Energy Committee.

                  OPENING STATEMENT OF SENATOR

             MARY L. LANDRIEU, CHAIRMAN, COMMITTEE

             ON SMALL BUSINESS AND ENTREPRENEURSHIP

    Chairman Landrieu. Thank you very much. As the Ranking 
Member said, for the next few hours, I am still maintaining my 
gavel as Chair of the Small Business Committee to get through 
this hearing, and then later this afternoon, we will take the 
gavel of Energy. That is how important this hearing was to me 
and to our team at SBA, and Senator Nelson, thank you and 
Senator Collins for being willing to join us in this effort 
because I think it is such a promising subject to be explored 
and to be supported.
    I love the term ``encore entrepreneur.'' I think it just 
says it all. It really is an exciting opportunity for our 
country with older people, older citizens, still very healthy, 
very experienced, wiser, calmer in their older years, to be 
able to think and dream and build great businesses. I think our 
country, if I might say, our structure here in Washington, in 
our States, and in our local communities really needs to 
recognize this wealth and treasure and structure ourselves to 
best help them.
    I am going to submit my statement to the record, but I want 
to underscore what Senator Collins said. The Kauffman 
Foundation, which I have found to be an extremely reliable 
source of good information about entrepreneurship, not partisan 
at all, but very good facts about entrepreneurship, says that 
from 1996 to 2010, 26 percent of entrepreneurial activity in 
this country, which is the backbone of our economy, was 
produced by people ages 20 to 34. That may be expected. What is 
not expected is that almost 40 percent were produced by people 
55 to 64. This difference is expected to widen as more 
Americans age over the next two decades, and we, I believe, 
have to be better positioned here in Washington, in our State 
capitals, and in our cities to be good partners with these 
entrepreneurs.
    Louisiana has approximately 960,000 residents over the age 
of 55, ready to go, ready to create jobs and opportunity. Let 
me just say that the SBA just this year, Senators Nelson and 
Collins, launched a strategic partnership with AARP. This 
partnership focused on providing counseling and training to 
entrepreneurs over 50 who wanted to start or grow a business. 
By October 2013, the collaboration had met and exceeded its 
goal of reaching 120,000 seniors, and I think this is just the 
beginning.
    Through our core partnerships with SCORE, and Mr. Yancey is 
here representing them, the women business owners, which all of 
us have supported, a series of other partnerships with the 
private sector, I think this is so promising to not only 
provide an opportunity for our seniors, but really, more 
importantly, for our seniors to create wealth, to continue to 
create wealth for themselves, their families, their 
communities, and for the United States.
    I am going to stay for a few minutes. I have got to conduct 
another hearing this morning. I will submit the rest of my 
statement for the record, but just again, it has been a 
privilege to work with you all on this. Senator Nelson and I 
have introduced a bill, Empowering Encore Entrepreneur Act. It 
is S. 1454. Perhaps some of the testimony can enhance our 
efforts in that piece of legislation and we can join together 
with our Republican colleagues and move something forward in 
the near future.
    Thank you, Senator Nelson.

                 OPENING STATEMENT OF SENATOR 
       BILL NELSON, CHAIRMAN, SPECIAL COMMITTEE ON AGING

    The Chairman. In the interest of time, I will submit for 
the record a statement.
    First, we are going to hear from Ms. Tameka Montgomery. She 
serves as the Associate Administrator of the Office of 
Entrepreneurial Development in the U.S. Small Business 
Administration, and then, from Kenneth Yancey, CEO of SCORE.
    Then, Conchy Bretos. She is the CEO of the Miami Senior 
Living Solutions in Miami.
    Then, Elizabeth Isele. We are delighted to hear from the 
co-founder of the Senior Entrepreneurship Works, and she is 
accompanied by Dr. Greg O'Neill, the Director of the National 
Academy on an Aging Society.
    With that, we will start off with you, Ms. Montgomery. Your 
written testimony is inserted as a part of the record. If you 
will share with us about five minutes, and we will go right 
down the line, and then we will open it up for questions. Ms. 
Montgomery.

           STATEMENT OF TAMEKA MONTGOMERY, ASSOCIATE

            ADMINISTRATOR, OFFICE OF ENTREPRENEURIAL

        DEVELOPMENT, U.S. SMALL BUSINESS ADMINISTRATION

    Ms. Montgomery. Thank you, Chairman Nelson, Chair Landrieu, 
Ranking Member Collins, and Senator Scott. Thank you for the 
opportunity to testify on SBA's work to serve America's encore 
entrepreneurs, new and aspiring small business owners over the 
age of 50. We commend you for highlighting this important topic 
and are grateful for your ongoing leadership and support.
    We all know the facts. Small businesses employ half of the 
private sector workforce and create two out of every three net 
new private sector jobs. What many people do not realize is 
that Americans between the ages of 55 and 64 comprise the 
fastest-growing group of entrepreneurs in the country.
    According to the Kauffman Foundation, encore entrepreneurs 
start new firms at a higher rate than any other age group. 
Moreover, about 7.4 million self-employed workers are 50 and 
older. Research shows that one in four Americans between the 
ages of 44 and 70 are interested in starting a business or 
nonprofit.
    That is why at SBA we are committed to ensuring that encore 
entrepreneurs have the tools they need to turn great ideas into 
successful companies. Through our 68 District Offices and 
nationwide network of resource partners, which includes 11,000 
volunteer SCORE mentors, 900 Small Business Development 
Centers, and more than 100 Women's Business Centers, we counsel 
and train more than a million current and aspiring 
entrepreneurs annually.
    We have always assisted small business owners over the age 
of 50, but our new initiative with AARP enables us to more 
effectively target our services to encore entrepreneurs. In 
April 2012, SBA and AARP entered into a strategic alliance to 
provide encore entrepreneurs with the tools and information 
they need to launch new companies. The objectives of the 
partnership were threefold. First, to increase our outreach to 
this growing segment of prospective entrepreneurs; second, to 
connect these individuals with our programs and resource 
partners; and third, to present entrepreneurship as a viable 
next step for older, retiring Americans, one that allows them 
to translate their ideas and vast professional experience into 
successful business ventures.
    Between April 2012 and May 2013, we held hundreds of in-
person workshops and mentoring sessions on topics ranging from 
writing a business plan and exploring franchise opportunities 
to accessing new markets and addressing the technology needs of 
encore entrepreneurs. We also offered online resources, such as 
webinars and e-courses, and also a self-assessment tool for 
determining if an individual is ready to start a business.
    In order to increase awareness and connect more encore 
entrepreneurs with mentors, last April, SBA and AARP 
established the First Annual National Encore Entrepreneur 
Mentor Month. Throughout the month, our District Offices and 
resource partners teamed up with State AARP offices to host and 
promote more than 100 events around the country. Events 
included speed mentoring, which allowed mentors and 
entrepreneurs to share information for five-minute sessions, 
and mentor lunches for entrepreneurs to learn best practices 
from established business owners. As a result of this effort, 
AARP and our resource partners engaged almost 120,000 
individuals.
    Due to the initiative's ongoing popularity, we have seen a 
rise in the number of older Americans taking advantage of SBA 
programs. We know that these aspiring business owners are 
poised to join the ranks of other successful SBA-supported 
encore entrepreneurs, folks like Vickie Francovich, who 
leveraged her 21-year career in banking and her husband's 
background in construction to form Business Solutions Inc. in 
Reno, Nevada. With the help of SBA's 8(a) Business Development 
Program, Vickie secured government contracts with several 
Federal agencies, growing her company's revenues from $3 
million to $15 million a year.
    Together with our resource partners and friends at AARP, we 
look forward to continuing this important segment of this 
population and helping more encore entrepreneurs grow and 
prosper.
    Thank you again for the opportunity to testify, and I am 
happy to answer any questions you may have.
    The Chairman. Thank you, Ms. Montgomery.
    Mr. Yancey.

             STATEMENT OF W. KENNETH YANCEY, CHIEF 
              EXECUTIVE OFFICER, SCORE ASSOCIATION

    Mr. Yancey. Thank you. Chairman Nelson, Senator Collins, 
Chairman Landrieu, Senator Risch, Senator Scott, my name is Ken 
Yancey and I am the CEO of SCORE. Thank you for the opportunity 
to offer testimony regarding the advantages and challenges of 
senior entrepreneurship and SCORE's experience in serving this 
important and growing segment of our population.
    First, I would like to thank Senator Landrieu and Senator 
Risch for sponsoring and introducing S. 2008, SCORE for Small 
Business Act of 2014, a reauthorization bill seeking to 
strengthen the resources for entrepreneurs by improving the 
SCORE program. The additional funds provided by this bill will 
allow us to continue to improve the services offered by our 
volunteers, improve our efficiency, improve our outreach in 
both rural and underserved communities, to include senior and 
encore entrepreneurs.
    As you know, SCORE is a resource partner with the U.S. 
Small Business Administration and we are celebrating our 50th 
year this year. Today, SCORE has over 320 chapters and more 
than 11,000 volunteers nationwide, most of whom are also 
seniors. Many have been entrepreneurs and many are still 
actively employed or running their own business. They give back 
to their communities by volunteering in SCORE and they have 
significant economic impact.
    In fiscal year 2013, those volunteers assisted clients in 
starting 38,600 new businesses, adding 67,300 new jobs, and 
growing the revenues in 40,100 enterprises. SCORE remains one 
of the most efficient and effective business formation and job 
creation engines presently in the SBA's arsenal of resources.
    I would like to reference a study sponsored by the MetLife 
Foundation. In many areas, the results of the study are 
consistent with the anecdotal information we gathered from 
SCORE mentors in preparation for this testimony. The survey 
estimates that 25 million Americans age 44 to 70 are interested 
in starting a business venture in the next ten years. Slightly 
less than half of those are interested in social 
entrepreneurship and intend to benefit their local or regional 
community in addition to making a living. These aspiring senior 
entrepreneurs often have significant networks and bring to the 
table an average of 31 years of work experience. Many have 
management experience, and most have very realistic 
expectations for their own small business experience.
    Again, this is consistent with the information we gathered 
from our SCORE mentors. In fiscal year 2013, 30 percent of our 
clients were between the ages of 44 and 55. An additional 31 
percent were 55 and older. Of these clients, roughly 29 percent 
were considering starting a business, 38 percent were in the 
process of starting their business, and 33 percent were already 
in business. I know that that is a lot of numbers, but they are 
important.
    According to our mentors, our senior clients often have the 
tools and experiences needed to start a business. However, they 
may not have the ability to apply those resources in a small 
business setting. They do not have complex capital 
requirements, and most do not aspire to a business size that 
will require angel, venture, or private equity financing. Many 
of them plan to self-fund their venture with personal savings 
and only need a small amount of outside capital, often less 
than $50,000. Many have existing banking or vendor 
relationships and other personal relationships that aid in the 
business start-up and management process.
    While a senior entrepreneur may have decades of experience 
in the business world, these skills, relationships, and 
experiences often are not a direct translation to the world of 
small business ownership. SCORE mentoring, coaching, guidance, 
and assistance provide support to these senior entrepreneurs in 
using appropriately their existing knowledge and resources. It 
also helps them to focus on the right tasks, priorities, 
measurements, and tools to be a successful small business 
owner.
    We appreciate the support of the two committees here today 
and your personal support of the issues around senior 
entrepreneurship and SCORE. We believe that senior and encore 
entrepreneurship will continue to be an important segment 
within the small business marketplace. These individuals have 
significant knowledge, experience, and often resources to use 
in support of their own business initiatives. They benefit from 
mentoring, coaching, and education on issues relating to 
starting and running a small business.
    SCORE clients 55 and older make up our largest client age 
demographic today. We know you recognize what an important and 
valuable contributor the senior entrepreneur segment is to our 
economy and that you will help us continue to meet this growing 
need.
    I would be pleased to answer any questions, provide you 
with any documentation. Thank you very much for this 
opportunity to testify.
    The Chairman. Thank you, Mr. Yancey.
    Ms. Bretos.

               STATEMENT OF CONCHY BRETOS, CHIEF 
         EXECUTIVE OFFICER, MIA SENIOR LIVING SOLUTIONS

    Ms. Bretos. I am so happy to be here. Thank you very much, 
Chairman Nelson, Chairman Landrieu, Ranking Member Senator 
Collins, and the rest of the members of this committee. I am 
delighted to share my thoughts on what it takes to be a late-
in-life entrepreneur. There are currently nine million--and 
this is the only statistic I want to give, I think enough has 
been given--nine million of us and 31 million coming through in 
the next decades.
    I am Conchy Bretos. I am the owner of MIA Senior Living 
Solutions, an innovative firm that for the first time provided 
assisted living services to public housing residents in Miami 
in 1996. In fact, Senator Nelson, you may not remember, but you 
visited Helen Sawyer in 1998 and we were so pleased to see you 
there.
    Since then, our firm has worked with public and private 
entities in 23 States. Later this spring, we will be opening 
the first public housing assisted living facility right here in 
D.C. for the D.C. Housing Authority. Our projects have proven 
to reduce Medicaid and Medicare spending by keeping seniors 
away from costly institutions, generating thousands of jobs and 
healthy profit margins. For the past two years, we have 
partnered with Low-Income Tax Credit developers, owners of 
affordable housing, and investors to grow our model. This has 
required a major undertaking on our part.
    In 1995, I created MIA Senior Living Solutions as a for-
profit, knowing quite well that in order to grow our firm, we 
had to be propelled by profits. As Florida Secretary for Aging 
under Lawton Chiles, I developed a very good understanding of 
aging issues, a good network, and facility to be able to bring 
funding to Miami when it was required. I have lived long enough 
to learn from failures, how to deal with downturns and the 
inevitable ups and downs that senior entrepreneurs go through.
    Changing the way we care for our seniors, low-income 
seniors and disabled adults in this country, is not a new idea, 
but no one had come up with a good model. Starting my own 
business at age 50 was as much a part of changing life 
circumstances as it was a career change--an empty nest, an end 
of a marriage, a loss of a job. I reached mid-life with an 
urgency to leave a legacy, to contribute, to make money, to be 
able to live those bonus years that longevity gives us.
    As we age, we have this dying desire to impact the world, 
and it grows stronger. For a long time, I dreamed of creating 
something lasting that would connect me with other generations, 
including my children. I did not want to defer that dream 
anymore. What kept me up at night was the fact that I did not 
have health insurance.
    When my term ended as Florida Secretary of Aging, I came to 
Miami with an idea and a few thousand dollars. I wanted to 
convert a public housing building into assisted living. I went 
to the Director. He gave me Helen Sawyer, an award-winning 
project, and then I went to the State legislature and got $1.2 
million. I am very good at raising money for other people, but 
not for myself, unfortunately.
    I raised $1.2 million from the State legislature--I believe 
you were there, Senator Nelson, at that time--and we started 
Helen Sawyer with a promise that it would be self-sufficient by 
the end of the year. Helen Sawyer actually generated $1 million 
in profit at the end of the year.
    Receiving the first Purpose Prize back in 2006 and becoming 
an Ashoka Fellow in 2010 has helped me tremendously. They have 
not only gave recognition to what I did, but they have provided 
a lot of people that have helped us in developing investor tax, 
budgets, how to present ourselves, how to raise money. I have 
learned more about electronic records and blogging and Facebook 
than I ever wanted. However, yes, I am always catching up with 
my kids.
    Most of my fellow entrepreneurs today, and, also, I wanted 
to recognize SCORE and SBA--actually, I was an 8(a) firm and 
have contributed a lot of knowledge and money to my initiative. 
Most of our fellow entrepreneurs do not have or are not as 
lucky as I have been and they do need capital and they do need 
connections and they do need somebody to open doors for them.
    Discrimination is real and is a major factor. America is a 
young country, but we do not have any models that encompass old 
people. We think of an innovator as someone young that develops 
an idea in a garage, a makeshift office or a dormitory. That is 
the exception. The real entrepreneurs today look like me, as 
you well said, and we need some help, and accessing government 
for me has been a major issue. It is very difficult to bring a 
new idea to government, and they need us. They need people like 
us who are committed, who have the public interest in mind. I 
am driven, I am disciplined, and I am terribly disruptive----
    I think those are the qualities that have gotten me here 
today, and I thank you very much.
    The Chairman. Thank you, Ms. Bretos.
    Ms. Isele.

             STATEMENT OF ELIZABETH ISELE, PH.D., 
           CO-FOUNDER, SENIOR ENTREPRENEURSHIP WORKS

    Ms. Isele. Thank you, Senator Nelson. It is an honor----
    The Chairman. Turn on your microphone.
    Ms. Isele. Thank you. I understand what you mean about the 
technology.
    I am a senior entrepreneur myself and I am very grateful to 
be here today and to share and explore the opportunity that we 
all have as a country, as a nation, as communities, as 
individuals, to really open and expand the untapped resource of 
senior entrepreneurs in creating their own economic self-
reliance as well as boosting that of their communities and the 
country.
    I would also like to acknowledge my colleague, Dr. Greg 
O'Neill, who is here. I, as Conchy, am extraordinarily 
impassioned on this subject. Dr. O'Neill has the data to back 
up my passions, and thank you, Greg, for being here to do that.
    I would really--I have just returned from the State of 
Florida, where we launched a brand new program this weekend to 
an extraordinarily receptive audience, and, as I said, I am 
especially delighted that Senator Collins is here because I 
started my first enterprise as a senior entrepreneur in the 
State of Maine. I do not know of any State as early on and 
continuing to support entrepreneurial activity and was 
extraordinarily welcome to a senior such as myself who was 
starting a program for seniors in that State to connect them to 
technology, to help them understand how to use it.
    That program grew from 12 seniors in Portland, Maine, 
within five years to 28,000 seniors across the country, and it 
was supported and--I did not start that enterprise with buckets 
of money. What we try to do with our senior entrepreneurs is to 
help them understand how they can tap into resources that 
exist, and in Maine, we had an extraordinary panoply of 
resources that supported us, be it adult education, be it 
senior entrepreneur and community centers.
    When I first had the idea of what connectivity for seniors 
would be to the technology, I went to people that worked with 
seniors and I said, ``Is this a good idea?'' They said, ``Well, 
I do not know, but we will put up a poster in the senior 
centers.'' They said, ``Create a poster, and by all means, say 
it is free.'' We created a poster and the poster literally 
said, ``Do computers have you flummoxed and does the World Wide 
Web inspire visions of giant spiders? Come and find out what it 
is all about.''
    They came. As I say, those 12 seniors came on Saturday 
mornings and started to learn about the technology, and as they 
learned and as the program built, we developed alliances with 
Microsoft. Microsoft gave a huge grant to Maine for seniors and 
technology, and which they are still continuing to deliver 
through the library system there.
    We also partnered with the National Institutes of Health, 
because the National Institutes of Health was putting all their 
health care information online and they said, our greatest 
concern is seniors who need this information cannot access it 
because they do not know how to use the technology. We created 
a program for the National Institutes of Health called Cyber 
Health, which trains seniors how to use the technology to 
access information, and even more importantly, how to evaluate 
the information that they find online, and seniors, as I say, 
the faces of seniors--Conchy is a senior, and I am so pleased 
that she is here today and has come up through the storms to 
join us, and I am a senior, but there are incredible seniors 
out there, and, as I say, tremendously untapped resources.
    I would just like to cite Joe James, who is in North 
Carolina, and his concern was he wanted to help all the black 
rural farmers who were leaving their farms because they could 
not continue to live on the farm, and what he did was create, 
first, a farmers' market where they could sell their produce. 
Then he realized at the end of the day they had all this 
produce left. Joe James is a bioengineer, and so he learned how 
to take that excess produce, no matter how small it was, and 
turn it--and convert it into biofuel.
    His next idea was, okay, if we can convert it into biofuel, 
the excess produce, why can we not have people create products 
particularly for this? The farmers are now creating from the 
seeds and literally the need to start their small businesses or 
maintain their farm was the capitalization for seeds to start 
this. They now create products for these biofuel converters and 
it has turned into a huge agribusiness and it is also a social 
program called the Greening of Black America. If you do not 
know about it, it is an extraordinary program.
    You have heard a lot of statistics this morning, but, 
again, we like to say that, yes, seniors are creating 
businesses and they are creating models and entrepreneuring is 
definitely, definitely trumping aging.
    I will not go into the many stories that we have, but we 
have 34 million, now, self-identified seniors who want to start 
businesses, and that does not even touch the millions of 
seniors who are totally intimidated by the word 
``entrepreneur.'' They do not conceive of themselves as 
entrepreneurs. My program, Senior Entrepreneurship Works, which 
we started with Baruch College, has an online curriculum for 
those self-identified seniors. It is a free online course 
specifically designed for seniors and senior needs.
    I am a Senior Innovation Fellow at Babson College in 
Massachusetts and I was talking with the Director there, Cheryl 
Kiser, and I said, what about all the millions of seniors who 
are intimidated by this word ``entrepreneur''? I said, we must 
find a way to tap into their entrepreneurial spirit. We created 
a program called eProv Studio, and eProv Studio is a 
combination of entrepreneurship education, entrepreneur thought 
and action, but we catalyze it through the art of 
improvisation, and it works extraordinarily well and it works 
extraordinarily well because the two key words in improvisation 
are ``yes and.''
    It is always a very positive development. It is, you put an 
idea out there, you work in community with other senior 
entrepreneurs or other seniors who are thinking of exploring 
entrepreneurship, and the ``yes and'' helps them leverage the 
resources that they have at hand, the resources that they have 
in the workshop in terms of working together to come up with an 
idea. That is so powerful, as opposed to most programs are 
either/or. Either you do this or you do that, either/or. 
Improvisation is ``yes and,'' and it has turned out to be an 
extraordinarily effective tool.
    We officially launched the first eProv Studio with 40 
people in Florida over the weekend. We had hoped to cap it off 
at 30, but the demand for this is absolutely extraordinary, 
and, as I say, we launched it in Florida. Pre-launch just from 
some of our pilot programs, we have had invitations from 12 
countries, from Australia, India, all over the EU, to create 
this program, as well as 40 cities in the United States. We 
literally, as senior entrepreneurs have a tiger by the tail.
    Most importantly, we have, to your point about the numbers 
of seniors wanting to start businesses, people want to explore 
it. They want to explore starting a business of their own, how 
to get that--how do I decode my entrepreneurial history, and 
that is one of the things that we do in eProv Studio. We have 
people who--one of our exercises is ``Decade by Decade,'' 
starting from zero to ten, to 60, to 70 to 80, however old they 
are. We ask them to please identify an accomplishment that they 
are very proud of that they achieved each decade. What we are 
trying to do is get them to understand that they have literally 
been thinking entrepreneurially all their lives, no matter what 
they are doing, whether they are raising children, whether they 
are working in offices, there is internal-external 
entrepreneurs.
    We had one woman who came up with a story at age seven who 
had--am I overtime?
    The Chairman. Ms. Isele, hold some of those thoughts for 
the questions----
    Ms. Isele. Okay. Sorry.
    I suddenly realized I am in the negative.
    The Chairman. I am going to insert in the record a letter 
from AARP that is supportive of the hearing.
    I will defer my questions.
    Senator Collins.
    Senator Collins. Thank you, Mr. Chairman. I know that 
Senator Scott has to leave and I wondered if I could allow him 
to go first.
    The Chairman. Certainly. Senator Scott.
    Senator Scott. Thank you very much, Mr. Chairman and 
Ranking Member.
    As I listened to your words and comments, I was thrilled, 
frankly. It is a great panel. I am going to walk away with a 
couple of bonus words for the bonus years. Thank you very much, 
ma'am, for your comments.
    My questions really have to do with, having been a small 
business owner myself for about 15 years and understanding the 
pain and the agony and the trepidation in which one enters into 
being a small business owner, I think of the experience that 
some of these seniors have had in their lifetime that really 
allows for us to understand why so many more small business 
owners that are seniors actually succeed at a level that is 
significantly higher than the young folks who are getting 
involved. They need to learn from you guys and gals. It is 
really important.
    There is a question on the access to capital that really is 
where I want to focus my one question before I have to leave. 
Starting my business, I had a difficult time finding the 
capital to start the business, and as I started to succeed in 
business, I realized that the regulatory burdens, the red tape, 
the tax code, do not lend themselves to succeeding and 
sustaining success.
    I would really like to hear the comments from you two 
entrepreneurs as it relates to your thoughts on improving our 
tax code, if you have any, in order to keep more of your 
capital so that you can reinvest your own money in your 
business as opposed to looking for ways to find capital, which 
really sometimes, if you go to a venture or to an angel, you 
are talking about a high price to continue your business. If 
you have any thoughts on ways that you would ask us to 
contemplate the discussion on tax reform to benefit seniors, 
tax credits, if you have any in mind, or the red tape that you 
have to go through, from the local to the State to the Federal 
levels, the combination of which, I would imagine, can be kind 
of a stranglehold at times.
    Ms. Isele. Yes.
    Ms. Bretos. I used to have black hair when I started.
    Senator Scott. I had an afro, so----all gone.
    Ms. Bretos. When I venture into the Low-Income Tax Credit 
in order to be able to build--we have to build the facilities, 
you know, to provide the services----
    Senator Scott. Yes, ma'am.
    Ms. Bretos. The problem, the main problem is that IRS has 
the program, the capital. HUD--these are three agencies that I 
work with, and the reason for my white hair--U.S. HUD has the 
capital, also, but also operating subsidies, rental subsidies, 
that are needed. Then HHS that has the Medicaid waivers. They 
do not talk to each other. They work in silos. There is no 
national capital program in the United States. Each State, each 
agency has their own little program.
    Just an example that probably you can help us solve. When 
you work with tax credits, they have regulations that actually 
work against getting a licensed assisted living facility. The 
tax credit says--and there are a multitude of regulations that 
each agency has that interfere with each other. They say you 
cannot force services onto somebody living in assisted living. 
The license says, if you do not provide the services, we take 
your license away. This is the kind of conflict, constant 
conflict that occurs all the time in this, because there is no 
coordination at the Federal level with the different----
    Senator Scott. Agencies----
    Ms. Bretos. [continuing]. Funding sources.
    Senator Scott. The interagency cooperation and 
coordination----
    Ms. Bretos. It is vital.
    Senator Scott. [continuing]. Before--having that one-stop 
concept, where you are able to get in the same place.
    Ms. Bretos. Yes.
    Senator Scott. Ms. Isele, would you like to add anything? I 
have about a minute and 31 seconds left.
    Ms. Isele. A minute--thank you for the warning.
    Senator Scott. Yes, ma'am.
    Ms. Isele. Yes. I am really keenly interested in 
unemployment benefits. Seniors who are unemployed who are over 
60 have a six percent chance of being reemployed, and the 
challenge here is that they need money to start a business, but 
they do not need a lot of money. In many cases, seniors can 
start a small artisanal capital business with a $1,000 loan. If 
they could use that unemployment insurance--right now, if you 
are unemployed and you are over 60, you have to waste 18 months 
reporting that you are looking for a job. If there was a way to 
take that money that you get as your unemployment benefit and 
put it into, first, entrepreneurship education and exploring if 
you want to be an entrepreneur, the government can modulate 
this program, can say, all right, we will give you the money, 
but we are not giving you the money to sit home and dream up an 
idea of a next business. We are giving you the money so you can 
get some entrepreneurial training so that you can understand if 
you can do this and then start the business. That is just one.
    Senator Scott. Thank you.
    Ms. Isele. I know Conchy talks about it, and the 
interdepartmental work, but there are very small initiatives 
where this is--helping senior entrepreneurs is not going to 
take millions of dollars.
    Senator Scott. Ms. Isele----
    Ms. Isele. It really----
    Senator Scott. They are, unfortunately, pulling on my 
coattail because I have run out of time.
    Ms. Isele. Sorry.
    Senator Scott. Thank you very much, and perhaps the next 
time we have an opportunity, we could bring the Small Business 
and Aging Committees back together to talk about microlending, 
because there may be a component that could be solved through 
microloans.
    Ms. Isele. Absolutely.
    Senator Scott. Thank you very much.
    Ms. Isele. Thank you.
    Senator Scott. Thank you for your deference.
    The Chairman. Senator Collins.
    Senator Collins. Thank you, Mr. Chairman, and ironically, I 
am going to start off just where my colleague, Senator Scott, 
left off.
    It seems to me that it may well be harder for seniors to 
get the financing that they need--and I see a lot of nodding 
heads on the panel--even though it may be a small amount. I 
love Ms. Isele's idea of allowing them, the long-term 
unemployed, to use their unemployment benefits as a start-up 
loan for a well-defined business plan to start a small 
business.
    I want to go across the panel and talk about the financing 
issue, because I can see where some lenders would be reluctant 
to invest in a senior's new business, not knowing who would 
take it over, whether or not they are going to run out of time 
or energy or decide that they want more leisure time, perhaps 
because of stereotypes because of not knowing that they are 
more likely to succeed than a business operated by a far 
younger citizen.
    Let us talk about, first of all, is it harder for seniors 
to get financing, and second, what can we do about that? 
Oftentimes, it is a very little amount of money that is 
necessary, but that may be hard for a senior to take it out of 
savings that are there for retirement purposes. Do we have 
microloan programs that are targeted at seniors the way we do 
for veterans, for example, or other groups, and I will start 
with Ms. Montgomery and let us just go down the panel on this 
issue.
    Ms. Montgomery. Thank you for that question, Ranking Member 
Collins. You know, at the SBA, we understand that small 
business owners or entrepreneurs have a challenge at accessing 
capital, which is why we are committed to opening up doors to 
access additional capital for them to start their businesses.
    The SBA has a number of loan products designed to encourage 
lenders to provide access to funds to under-represented and 
underserved communities, such as our encore entrepreneurs, and 
loan products that start at a lower amount. We have our Small 
Loan Advantage Program. Then, additionally, our microloan 
programs that are used by non-depository lenders, such as 
Community Development Financial Institutions, and those loans 
can go as low as about $500 up to about $200,000 or $350,000, 
and what we do through our resource partners at the SBA is to 
help individuals that are encore entrepreneurs identify and 
know where those resources exist, because a lot of times, 
people do not know about microlending programs and CDFIs. Our 
volunteers with SCORE and Small Business Development Centers 
and Women's Business Centers, they have the relationships with 
these institutions and can guide and direct our encore 
entrepreneurs on the right path to accessing that capital.
    Senator Collins. Thank you.
    Mr. Yancey.
    Mr. Yancey. Thank you for the question, Senator Collins, 
and thank you very much for referencing Bruce Bohrmann, the 
knife-maker in Maine, one of our terrific clients.
    You know, Bruce started his business with a very small 
amount of capital. It was not bank-funded. What we know about 
our clients at SCORE is less than ten percent of our clients 
actually get bank financing for their business. As a banker by 
training, although it has been many years ago, we did not lend 
into the start-up environment for reasons that made sense. It 
was too risky.
    Of those encore entrepreneurs that come to see us, many of 
them are, as I have said, they are self-funded through savings, 
not through retirement. We do not believe at SCORE, I 
personally do not believe, it is the right thing to do, to 
reach into 401(k)s or 403(b)s, and there are vehicles that will 
allow you to do that, but as a defined senior now, I am not 
willing to reach into that and I think that that is the right, 
prudent thing to do and we would not encourage others.
    I think that microloan opportunities for those seniors make 
a great deal of sense. I think Express opportunities, some of 
the loans that the SBA has offered in the past and still 
offers, like Patriot Express, I think there is value in 
something along those lines.
    I personally like the idea of speaking with someone that is 
a little more mature, that has a little gray or maybe no hair--
--that has that experience and understands the importance and 
has either made payrolls or had balance sheet responsibility or 
in some way have been gainfully employed over time that knows 
how to operate in a business environment. Those are the types 
of risk that I think all bankers, including myself, would look 
for at the time.
    I think that there are things that you can do. I think that 
there are things that would be valuable. I think, above all, I 
think it is critical that we all continue to promote the 
importance of senior entrepreneurship and the value that it can 
bring to communities and to our economy.
    Senator Collins. Thank you.
    I know my time has expired, so I will get the responses 
from the other three on the next round.
    The Chairman. Go ahead.
    Senator Collins. That is okay? Thank you. Ms. Bretos. I 
tried to pronounce that as well as the Chairman, but I do not 
think I succeeded.
    Ms. Bretos. Thank you. I just want to say from the onset 
that my experience with the SBA and SCORE, in particular, has 
been wonderful.
    Senator Collins. Great.
    Ms. Bretos. They are really committed to helping small 
businesses.
    I like the idea very much of microlending. I just went 
through two-and-a-half years of trying to get a loan from 
Celtic Bank in Miami and it was a disaster. I do not know 
whether it was backed by the SBA, I assume so, but I basically 
had to give my house as a collateral in order to get a $100,000 
loan. There are major problems, and I think if somebody like 
HUD does with the 232 mortgage guarantee loans, we could do 
something like that for small business. Our problem is the 
revenues. If we do not have sufficient revenue to back a loan, 
then they have to take your house instead, and that is a 
problem.
    Senator Collins. Thank you.
    Ms. Isele.
    Ms. Isele. Yes. Microloans are hugely effective in this 
arena, because we, in order to mitigate seniors' financial 
risk, encourage them to start small. We have been specifically 
working with global programs such as Accion. There is an Accion 
USA. Kiva is a global microloan program. We also encourage 
people, and if government could open the access to information 
about programs like Kickstarter.com, if we could make them more 
inclusive for the seniors, because there are lots aimed at 
young people or women entrepreneurs. There is no language, 
really, that includes seniors.
    Our greatest example is an 88-year-old grandmother who 
started a company called Happy Canes, and she started it with a 
$3,000 fund from Kickstarter. This is also a beautiful example 
of the intergenerational aspects and opportunities here. Her 
grandson saw that she decorated her own cane and he said, ``Can 
you make more of those?'' She said, ``Well, yes. I have lots of 
time.'' He said, ``Well, how about selling them?'' She said, 
``Well, I have to get all these supplies. He launched this 
Kickstarter campaign, and within something like three days, she 
had over $3,000 for this business which she markets on Etsy.
    You have all kinds of just interrelated ways in which to 
take a small business financed by a microloan forward through 
social media markets and online business. It is just fabulous 
opportunity for seniors, and also seniors with disabilities, 
and we must not rule them out. A huge percentage of them are 
self-employed or have very small businesses.
    Senator Collins. Thank you.
    Dr. O'Neill.
    Dr. O'Neill. Thank you, Chairman Collins and Senator 
Nelson, for this opportunity to join this really passionate 
panel, who, I must say, also have great data to back up their 
passion.
    On this point, it is absolutely true that older adults who 
do not self-fund or bootstrap their start-ups, which is really 
the majority, otherwise say that the key barrier is access to 
start-up capital. It is a kind of a paradox, because for banks, 
seniors are really their key clients. Seniors have the majority 
of assets in banks. The banks yet, I think, do not completely 
understand the needs of this population.
    One of the things that Elizabeth and I have done is bring 
together cross-sector groups to really better understand the 
whole phenomenon of senior entrepreneurship, and I think going 
forward that the microloans and crowdfunding and other 
technologies like that need to be made accessible for older 
adults. The great thing about microloans and microinstitutions 
is they often are able to provide advice, as well as loans, and 
that has been a key thing.
    We have seen in other countries, like the U.K., they 
actually have microloan organizations who specifically target 
the long-term unemployed, because the long-term unemployed 
really have a, especially when they are older, have a 
disproportionate chance of staying unemployed for a very long 
time, and this is a segment that really deserves our focus and 
policy attention.
    Senator Collins. Thank you, and thank you, Mr. Chairman.
    The Chairman. Senator Casey.
    Senator Casey. Mr. Chairman, thank you very much for 
calling this hearing, and Ranking Member Collins, as well. It 
is a very interesting topic and it is one that, I think, bears 
a lot of review and scrutiny by members of the United States 
Senate, and I would include the House in that, as well.
    It is particularly interesting, because when I look at a 
State like the one I represent, Pennsylvania, we have just 
about two million seniors in our State, and when I consider 
what they have done in their lives up to that point in time, it 
is really extraordinary. When you think about the--I am at kind 
of the end of the--the younger end of the baby boom generation. 
When I consider the generation just before the baby boom, folks 
who might be in their 80s now or close to that, they have lived 
through not just a remarkable time period, but they have 
contributed so substantially to what we take for granted today.
    In a sense, we take for granted that we have a middle 
class. They built it, especially after World War II. You 
consider the contribution they made to several wars, in 
defending the country and preserving freedom. All of that, we 
sometimes take that for granted today.
    Then just the ability they demonstrated to adapt to change, 
and a lot of what I hear from our witnesses today and a lot of 
what I hear from constituents back home is that when they reach 
a certain point in their lives, if they have been entrepreneurs 
or if they have been doing work or activities that have an 
entrepreneurial spirit that kind of undergirds it, they run up 
against, as you have outlined here today, a couple of basic 
challenges.
    One of them is just the challenge that comes with financial 
insecurity, and I am not sure there has ever been a time in our 
history when there have been more reasons to feel that 
insecurity. The volatility of the economy has never been more 
apparent, I do not think, in the last couple of years, 
certainly in the last decade. I think one other reason for this 
sense of insecurity, frankly, is Washington. They do not see 
Washington working together on a regular basis. We have had a 
little--it has been a little better lately, but we have a two-
year budget and a one-year appropriations. That provides some 
lessening or diminution of that insecurity, but, let us face 
it, there has been a lot of insecurity that people--when people 
do not see this place working, they scratch their head and say, 
what does that mean for my bottom line? There have been plenty 
of reasons to be worried in addition to the speed of 
technological change.
    I guess I see this issue as both a security, a financial 
security issue, as well as a basic dignity issue. Our self-
worth is tied up in what we do and how we do it, and this idea 
that if you spent most of your life being an entrepreneur, 
creating jobs, creating wealth, or being successful, the idea 
that when you hit a certain age, you just have to shut the 
engine off, does not make a lot of sense, so, for all those 
reasons and more, it is very important that we explore this. I 
am going to leave a little bit of time for questions.
    I think I will do what Senator Collins did. Maybe, Dr. 
O'Neill, I will start with you and just go from my right to 
left, and ask you--because around here, if you make ten 
recommendations, we probably will not get to ten in terms of 
enactment of new legislation or pushing the administration to 
do something or insisting that an agency do something. I will 
limit everyone to one, because we do not have a lot of time, 
but if there was one thing, starting with you, Doctor, you 
would hope that the House and the Senate would do in the next 
year to foster better policy or to bring about more 
opportunities, I should say, for encore entrepreneurial 
opportunities, what would you recommend if you really had to 
boil it down to one, either legislation or policy.
    Mr. O'Neill. Thank you. Since we say encore entrepreneurs 
here specifically, I will take that specific in that sense, 
that we really are talking about the people who go into self-
employment after 50. This is important to know, that there are 
about a third of the people who are in self-employment after 50 
came in after 50. The others are people--the other two-thirds 
of people have been self-employed throughout their career, and 
they are very different and they need our help because they are 
the ones that are disproportionately likely to have been 
unemployed or to have, in a way, been more pushed into 
entrepreneurship or self-employment than the groups who were 
there before.
    I come back to the idea of the unemployment benefits, 
because I think that that has shown in other places to have 
made a big difference in getting that group back into the labor 
force, back into creating tax revenues, back into contributions 
for Social Security and Medicare, and, altogether, really, the 
most important thing is when people are self-employed and are 
doing the work of their passion, we have seen that they work 
much longer. They retire, on average, much later than work and 
wage salary individuals. This is another very good thing. We 
encourage longer work lives, which, of course, helps our fiscal 
outlook tremendously.
    Senator Casey. Mm-hmm. Thank you.
    I know we are a little over time, and I do not want to test 
the forbearance of the Chairman, but----
    Ms. Isele. I think my number one priority would be to 
change government's attitude toward seniors. We need in this 
country, as is happening across the globe, to think of seniors 
as assets and not liabilities. There is always talk about 
seniors, do not worry, we are not taking this away, we are not 
diminishing this entitlement program, and it is always in that 
negative and I think we have to turn that into a positive.
    I think as I was quoted in the New York Times over the 
weekend, we have to start thinking of this, not in gloom and 
doom terms, as the oncoming silver tsunami. We have to think of 
seniors as assets and not liabilities. They are a silver lining 
in this country, what they can contribute. They are not a 
silver tsunami. They are a silver lining. And, believe me, they 
will be yielding golden dividends.
    Senator Casey. Thank you.
    Ms. Bretos. That is wonderful.
    Senator Casey. Ms. Bretos.
    Ms. Bretos. I would say that most of the people, most of my 
colleagues--and there are quite a few of them--what they have 
problems with is accessing government, especially for the 
purpose that you mentioned. Most of our work requires changing 
policy, not necessarily introducing new legislation, which I 
know is very difficult. I was a lobbyist once, and so I 
understand the process.
    There is something called the White House Office of Social 
Innovation and Civic Participation that has been in effect for 
about four or five years. They do not have a phone. They do not 
answer e-mails. I have been trying to talk to them for the last 
four years. Something like that that could be set, identified 
staff that would actually connect us with the Federal 
Government, Federal agencies.
    I do not have a problem with Senator Nelson. Never have.
    Every time I want to come and see him, he makes time for 
me, but, it is difficult to access government and we depend so 
much on government, so, somebody that would coordinate the 
efforts of us all entrepreneurs that have a lot of juice in us, 
believe me.
    Senator Casey. If I want an appointment with Senator 
Nelson, I should call you.
    Thanks. Mr. Yancey.
    Mr. Yancey. Very quickly, Senator Casey----
    Senator Casey. Sorry to limit it to one recommendation.
    Mr. Yancey. No worries. Perfect. As you would anticipate, 
we would hope that we would have continued access to quality 
training, mentoring, and support for these senior entrepreneurs 
who have many great qualities, great knowledge, and need a bit 
of assistance in applying that in a small business environment, 
so, to continue that support and to continue to have that 
access through SBA, SCORE, Small Business Development Centers, 
Women's Business Centers, and other programs, I think, are 
important to the success of that group.
    Senator Casey. Thank you.
    Ms. Montgomery.
    Ms. Montgomery. Senator Casey, I would echo Mr. Yancey and 
just say that to continue the support of the Small Business 
Administration so that we can continue to do this work. You 
know, as I stated in my testimony, that we have always been 
serving. Our resource partners have always been serving this 
population and to allow us to do more through your support 
would be most beneficial. Thank you.
    Senator Casey. Thanks very much. Thank you, Mr. Chairman.
    The Chairman. Ms. Bretos, what was that government office 
that you said that did not answer the phone?
    Ms. Bretos. That is the beauty. Nobody knows about it.
    It is called the Office--and it is actually--the mandate, 
it was created under the mandate to identify capital, and human 
and financial capital, to bring about community solutions. It 
is the Office of--I am sorry, I had it here--White House--it is 
associated with the White House--the White House Office of 
Social Innovation and Civic Participation. The Director is a 
Mr. Greenblatt, and he is incommunicado.
    The Chairman. Well, we will see if he will answer my call.
    Ms. Bretos. I am sure he will.
    Thank you, Senator Nelson.
    The Chairman. Tell me, since you started a business, 
although you had had quite a bit of experience in business 
before your senior years, what do you wish you would have known 
before taking on the task of organizing that business?
    Ms. Bretos. I think if I had known, I would not have done 
it, so it was better if I did not. I think that, for me, I was 
very naive and had illusions. I think that for me to understand 
that it was not going to be easy, that there were going to be a 
lot of people who would think that I am a goner, that I do not 
have a succession plan, who is going to take over, the lack of 
capital, there are a lot of ups and downs.
    What was good for me is that I learned to fail very often. 
I have failed at almost everything I have done in my life. If I 
had learned before I started this how to fail, that would have 
been a big asset for me. I would do it again.
    The Chairman. Well, you obviously have done it successfully 
because you have got this present Miami Senior Living 
Solutions.
    Ms. Bretos. That is about it, and also, it has brought me 
here in front of you, which is, again, a success.
    The Chairman. Dr. O'Neill, interestingly, we have a new 
health care law. A senior citizen, all their life, they work 
for a company, they retire, maybe their company does not 
provide for health insurance, maybe it does, but if they 
suddenly find themselves just before that period of Medicare at 
age 65, does the fact that health insurance is available now 
through the health insurance exchanges help at all in making 
the decision in that senior's mind to start up a new business?
    Mr. O'Neill. Yes. This is a very, very interesting 
question, and we actually have quite a bit of research around 
this question. What you are really referring to is a phenomenon 
that is sometimes described as ``job lock.'' I might call it 
``job anchor,'' where your health insurance is tied to your 
workplace. You may or may not want to leave work to pursue an 
entrepreneurial path, because, as we have heard, there are lots 
of risks in entrepreneurship, and to add on top of that the 
risk of not being covered if a health condition arises is going 
to be a big one.
    We also know, and many of us have cited the statistics from 
the Kauffman Foundation, that it is exactly in that 55 to 64-
year age group where we have got the high entrepreneurial 
activity already. This is a group that is probably very likely, 
you know, more likely to have a preexisting condition, too. Let 
us be clear about that.
    What there are, there are studies that have looked at both 
surveys of what stops people from pursuing entrepreneurial 
paths and people often cite, in many surveys, the lack of 
options to get health care beyond there. We have seen in sort 
of natural experiments where some forms of health care have 
rolled out that are outside the workplace that the rate of 
entrepreneurship has gone up. A recent survey by the Brookings 
Institution thinks that the ACA may actually unleash over one 
million more self-employed people into the market.
    Putting that aside, we have studies that have just looked 
at the difference in the probability of going into 
entrepreneurship at age 65 versus 64, so, the simple switch to 
Medicare, and it is about 13 percent higher probability.
    The Chairman. Really?
    Mr. O'Neill. In all, including even a GAO study on this, a 
meta-study of about 20 studies by economists and labor policy 
people, it seems to indicate that this should have some sort of 
a boost. I cannot comment on the overall net effects of the 
ACA, but this very important component could be very 
substantial.
    The Chairman. Whose study was that that said that a million 
new jobs would be created?
    Mr. O'Neill. That is the Brookings Institution study----
    The Chairman. Brookings.
    Mr. O'Neill. [continuing]. Which we can make available to 
you. The other studies of the 64-65 transition, not 
surprisingly, is a Kauffman study. It seems that they really 
are the source of some of the most interesting--as a foundation 
that really supports entrepreneurship in America, they have a 
lot of interesting work that we can all learn from.
    The Chairman. To what degree does the ACA giving certain 
tax credits for businesses 25 employees and under play into 
this?
    Mr. O'Neill. I think on that question, I will turn to some 
of my panel. I am less familiar with small business and the tax 
credit piece.
    The Chairman. Well, that is more of a tax question, and 
that would apply to any age.
    Tell us some more, Dr. O'Neill, about the benefits, the 
economic benefits, of senior entrepreneurs.
    Mr. O'Neill. Well, it really seems that there are several 
economic and social benefits. Individuals staying in the 
workforce longer, which, as I mentioned earlier, this is a well 
established fact that the self-employed retire later. They 
indicate they are going to retire later and they do retire 
later. That, of course, is a tremendous benefit to society. If 
people do work longer and they are doing things they enjoy, we 
benefit from the tax revenue, we benefit from the continued 
contributions to our social programs, and on top of that, we do 
have concerns that we will have some labor shortages in some 
areas, so it is a good thing if people continue to work. Also, 
it allows these individuals to increase their standard of 
living in retirement, and particularly for people who were 
unemployed for long periods, getting back into the workforce 
has obvious benefits.
    We also know that more than half of small business owners 
in the United States are age 50 and over, and it has been said 
before on this panel that small business is a net producer of 
jobs to the economy. To the extent that we are supporting this, 
you know, that this has additional major effects in terms of 
business creation, job creation, and all the spillover effects 
from that.
    Ms. Bretos. If I could, with your permission----
    The Chairman. Please.
    Ms. Bretos. I think one, at least one major piece is that 
the older you get, the more involved you get in social issues. 
I think these old entrepreneurs like myself are definitely 
concerned with solving social problems like homelessness, like 
health, children, and so I am sure, has a spillover effect, I 
mean, somebody solving the social problems, after all.
    Ms. Isele. We have, in our program, we started with over 60 
percent and now it is closer to 70 percent of the senior 
entrepreneurs with whom we work are starting green businesses, 
so, that is going to have a huge environmental impact.
    The Chairman. Anyone on the panel can comment. There is a 
common perception, more seniors working, that is going to take 
away youth employment, but the studies show it is exactly the 
opposite. It creates more youth jobs. Comment on that.
    Ms. Isele. That is absolutely true. In fact, we had one of 
the individuals in your State of Florida was a senior who 
started a company and the company grew so much faster than he 
had anticipated that he had to hire his children to help scale 
that organization. It works both ways with the seniors and 
intergenerational business start-ups, but also the seniors who 
create jobs are creating jobs for young people. We say, 
prosperity knows no age boundary, and it is true. What jobs 
that they create, everybody benefits from that. The study from 
the Association for Enterprise Opportunity, AEO, has documented 
that if just one in three small businesses hired just one 
additional employee, the unemployment rate in the United States 
would be zero.
    Ms. Bretos. I just wanted to talk about, in my particular 
case, we create an average of 50 jobs, new jobs with benefits, 
usually young mothers with little children, and so we have 
created in the past 17 years over 7,000 new jobs with benefits 
throughout the 23 States that we are working in, and we hire 
old people, too, of course.
    Mr. Yancey. I think we all recognize the contributions that 
small business makes to employment, and so it stands to reason 
that as more senior entrepreneurs start, more opportunities for 
employment for younger people and others, many of these being 
entry-level positions with training, will become available. I 
think the more that we can encourage this fantastic phenomenon, 
the better we are going to be as a country again and as a 
community.
    Ms. Montgomery. Again, I support what Ken says. Small 
business ownership and small business in general have a great 
impact on our economy, and so engaging encore entrepreneurs so 
that they have the opportunity to create new jobs will only 
benefit not only additional older individuals, but, as well, 
younger people who are able to seek employment with those 
opportunities.
    The Chairman. Senator Collins, any final comments?
    Senator Collins. Thank you, Mr. Chairman.
    I just want to thank our panel today. I think this has been 
a fascinating hearing that is really going to help increase 
public awareness of the critical and growing role that senior 
entrepreneurs, encore entrepreneurs, are playing in our 
economy.
    I loved Ms. Isele's characterization of the growing, or the 
changing demographics as being a silver lining rather than the 
silver tsunami. That is a wonderful line and I hope you will 
not mind if I start using it.
    Ms. Isele. Absolutely not.
    Senator Collins. It was really interesting. I must say, 
prior to the Chairman suggesting that we do this hearing, I had 
no idea that more older people were starting businesses than 
the very younger parts of our population, so, this has been an 
eye-opener for me, as well.
    Thank you, Mr. Chairman.
    The Chairman. Senator Collins, I am frequently reminded--
perchance you are, as well, in our capacities as the senior 
Senator of our respective States--that upon introduction, 
people get tongue tied, and instead of saying, ``the senior 
Senator from Florida,'' they introduce me as ``the senior 
citizen of Florida.''
    Senator Collins. That is so true. It happens to me, as 
well.
    The Chairman. Well, this has been a tremendous hearing. We 
want to thank you.
    The meeting is adjourned.
    [Whereupon, at 11:19 a.m., the committees were adjourned.]



      
      
      
      
      
      
      
      
      
      
      
      
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                                APPENDIX

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                      Prepared Witness Statements

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   Prepared Statement of Tameka Montgomery, Associate Administrator, 
      Office of Entrepreneurial Development, U.S. Small Business 
                             Administration
    Chairman Nelson, Chair Landrieu, Ranking Member Collins, Ranking 
Member Risch, and distinguished members of the Committees, thank you 
for the opportunity to testify on the U.S. Small Business 
Administration's (SBA) work to serve the growing number of new small 
business owners over the age of 50--or ``encore entrepreneurs.'' We 
commend you for highlighting this important topic and are grateful for 
your ongoing leadership and support.
    We all know the facts: small businesses employ half of the private 
sector workforce and create two out of every three net new private 
sector jobs. What many people do not realize, though, is that Americans 
between the ages of 55 and 64 comprise the fastest-growing group of 
entrepreneurs in the country. According to the Kauffman Foundation, 
encore entrepreneurs start new firms at a higher rate than any other 
age group.\1\ Moreover, about 7.4 million self-employed workers are 50 
and older; and research shows that one in four Americans between the 
ages of 44 and 70 are interested in starting their own business or 
nonprofit in the next five to 10 years.\2\ That is why, at SBA, we are 
committed to ensuring that encore entrepreneurs have the tools they 
need to turn great ideas into successful companies.
---------------------------------------------------------------------------
    \1\ Stangler, Dane. The Coming Entrepreneurship Boom. Ewing Marion 
Kauffman Foundation, June 2009. Web http://www.kauffman.org/
thecomingentrepreneurialboom.pdf.
    \2\ Encore Entrepreneurs: Creating Jobs, Meeting Needs. Encore.org 
(formerly Civic Ventures), November 2011. Web. http://www.encore.org/
files/EntrepreneurshipFastFacts.pdf.
---------------------------------------------------------------------------
    Through our 68 District Offices and nationwide network of Resource 
Partners--which includes 12,000 SCORE volunteer mentors, 900 Small 
Business Development Centers (SBDCs), and more than 100 Women's 
Business Centers (WBCs)--we counsel and train more than 1.1 million 
current and aspiring entrepreneurs annually. And while, together with 
our partners, SBA has been assisting small business owners over the age 
of 50 for decades, through our initiative with AARP, we are able to 
more effectively target our services to encore entrepreneurs.
    In April 2012, SBA and AARP entered into a strategic alliance to 
provide Americans over the age of 50 with the tools and information 
they need to launch new companies. The objective of this partnership 
was three fold. First, to increase our outreach to this growing segment 
of prospective entrepreneurs; second, to connect these individuals with 
our programs and Resource Partners; and third, to present 
entrepreneurship as a viable next step for older and retiring 
Americans--one that allows them to translate their ideas and vast 
professional experiences into successful business ventures.
    As a result of this effort, SBA, AARP, and our Resource Partners 
engaged almost 120,000 new and existing small business owners over the 
age of 50. Between April 2012 and May 2013, we held hundreds of in-
person workshops and mentoring sessions on topics ranging from writing 
a business plan and exploring franchise opportunities to accessing new 
markets and addressing the technology needs of encore entrepreneurs. We 
also offered online resources such as webinars and e-courses as well as 
a self-assessment tool for determining if an individual is ready to 
start a business.
    In order to increase awareness and connect more encore 
entrepreneurs with mentors, last April, SBA and AARP established the 
first annual ``National Encore Entrepreneur Mentor Month.'' Throughout 
the month, our District Offices and Resource Partners teamed up with 
State AARP offices to host and promote more than 100 events around the 
country. Events included speed mentoring, which allowed mentors and 
entrepreneurs to share information for 5-minute sessions, and mentor 
lunches for entrepreneurs to learn best practices from established 
small business owners.
    Due to the initiative's ongoing popularity, we have seen a rise in 
the number of older Americans taking advantage of SBA programs. We know 
that many of these aspiring business owners are poised to join the 
ranks of other successful SBA-supported encore entrepreneurs--folks 
like Vickie Frankovich who leveraged her 21-year career in banking and 
her husband's background in construction to form Building Solutions, 
Inc. in Reno, Nevada. With the help of SBA's 8(a) Business Development 
Program, Vickie has secured government contracts with several Federal 
agencies, growing the company's revenues from $3 million to $15 million 
a year. Today, Vickie mentors other entrepreneurs and has been 
recognized by SBA as Nevada's ``Women in Business Champion of the 
Year.''
    Encore entrepreneurs, like Vickie, bring a lifetime of experience 
and connections to new ventures and are competitive in the marketplace 
with younger business owners. By tapping into SBA's suite of services 
and the expertise of our mentors and business counselors, they are able 
to pursue their life-long dreams of small business ownership. Together 
with our Resource Partners and friends at AARP, we look forward to 
continuing to support this important segment of the population and 
helping more encore entrepreneurs grow and prosper.
    Thank you again for the opportunity to testify and I am happy to 
answer any questions you might have.
            Prepared Statement of W. Kenneth Yancey, Chief 
                  Executive Officer, SCORE Association
    Chairman Nelson, Senator Collins, Chairman Landrieu, Senator Risch, 
and members of the Senate Special Committee on Aging and the Senate 
Committee on Small Business and Entrepreneurship: my name is Ken Yancey 
and I am the CEO of SCORE. Thank you for the opportunity to offer 
testimony regarding the advantages and challenges of Senior 
Entrepreneurship. This is an important and growing segment of our 
population that holds great potential for our economy. It is in all of 
our best interests as Americans to assist this group in every way we 
can and SCORE has a unique position to effectively do so.
    Today I'd like to present 4 points to the committee:
    1. First, I'd like to share some encouraging statistics about the 
50+, or ``Encore Entrepreneur,'' segment and what characterizes this 
group.
    a. According to a study by MetLife Foundation, 25 million people 
aged 44-70 expressed an interest in starting their own business or non-
profit organization within the next 5-10 years.
    b. Of this group, 85 percent reported having significant 
management experience, with an average of 15 years in managerial roles.
    c. In addition to a wealth of experience and an ability to manage 
others, they also tend to have a well-knit web of business contacts 
built over years of networking.
    2. Secondly, encore entrepreneurship fulfills the senior 
population's desire to contribute to their communities and our 
communities in turn benefit from these ventures.
    a. This study by MetLife Foundation noted that nearly half of this 
group of aspiring entrepreneurs says having a positive social impact is 
very important or say they are seeking to meet a need in their 
community, meet a social challenge or provide a service to others.
    b. With retirement from a traditional employment role, over 80 
percent of these aspiring business owners find themselves finally able 
to pursue their passions and gain ``a sense of meaning and a feeling of 
accomplishment.''
    c. Other goals of business ownership reported by approximately 80 
percent of this group include:

          having ``a positive impact on your community,''
          being ``active and productive'' and
          putting ``the skills and talents you've learned to 
        use''

    d. Potential areas of focus for their enterprises include a large 
focus on community needs including social services, poverty 
alleviation, working with at-risk youth, economic development, 
healthcare, the environment, human rights and social justice.
    3. Third, encore entrepreneurs enter the world of business 
ownership with realistic financial expectations and aim to create 
small, locally focused ventures to meet needs in their communities. 
While members of this population are more likely to have the cash 
reserves and funding needed to start a business, they are also 
realistic in their scope and projections.
    a. The MetLife Foundation study shows that encore entrepreneurs 
tend to have modest financing needs. Two out of three report that they 
need $50,000 or less to get started and only one in five said they need 
more than $100,000. Around half expect to tap personal savings to 
launch their ventures.
    b. Their expectations of success are not only attainable but also 
scaled to benefit their immediate communities. Nearly three-quarters of 
this group expect to create small ventures, employing up to 10 people. 
And two out of three encore entrepreneurs would consider their 
potential businesses or nonprofit ventures worthwhile if they earned 
less than $60,000 a year.
    4. And finally, I'd like to share with you how SCORE effectively 
serves this group, allowing them to achieve their full potential as 
business owners.
    a. SCORE serves entrepreneurs in a variety of ways including one-
on-one mentorship, our extensive offering of in-person and online 
educational workshops and a wealth of business tools, template and 
resources. Through a network of over 11,000 volunteer business mentors 
across the country, we provide those looking to start or grow a small 
business with the direct, personalized expertise they need to thrive.
    b. 31 percent of the clients we serve are over the age of 55. In a 
client survey conducted during 2013, 56 percent of our small business 
clients ages 55-64 reported that working with SCORE helped them grow 
their business revenues, and 61 percent reported having ``changed a 
business practice or strategy as a result of working with SCORE.'' 
Overall, 82 percent say they would recommend SCORE.
    c. Our volunteers working with these individuals one-on-one to 
help them grow their ventures report that this is indeed a successful 
group of entrepreneurs. For example, Nancy Strojny, a SCORE mentor in 
Portland, Maine reported her experience currently working with 6 encore 
entrepreneurs saying, ``The 50+ person understands how to work hard and 
prepare for their success; they know how to get information, connect 
with people and ask good questions. But a successful corporate career 
does not necessarily translate into a successful entrepreneurial 
business. Most will need to learn new skills beyond their professional 
expertise. SCORE helps navigate the transition by translating their 
skills into today's reality for starting a business, providing a 
sounding board and offering reality checks in a couple of key areas: 
networking, technology, and boosting confidence. We often start with a 
discussion on key topics such as preparing a feasibility study, 
assessing the marketplace, and how much to invest.''
    d. Just a few of the successful Encore Entrepreneurs we've served 
include:

          The Solar Institute of Nevada who provides valuable 
        employment training for those looking to design, integrate, and 
        install photovoltaic systems, ultimately capitalizing on the 
        new green economy.
          Healthy Life Clinic, Inc. of Knoxville, Tennessee who 
        after just 2 years in business opened a second location, now 
        employing 27 full-time employees.
          And USA Gypsum of Reinholds, Pennsylvania which 
        recycles waste construction materials into valuable agriculture 
        product for the farming community and is currently in the 
        process of building a new headquarter site twice the size of 
        its current location.

    These are just a few of the outstanding entrepreneurs over the age 
of 50 that SCORE has helped pursue rewarding and beneficial second acts 
as small business owners.
    At SCORE, we completely agree that the Encore Entrepreneur market 
is important and a valuable contributor to communities across the 
country, today and in the future. Thank you again for holding this 
hearing on senior entrepreneurship. As people live longer, healthier 
and more productive lives the trend of encore entrepreneurship will 
likely continue. Encore entrepreneurs logically have more experience 
and are often better prepared to be successful as an entrepreneur. We 
also believe that the encore entrepreneur benefits greatly from 
mentoring and training offered by programs like SCORE, SBDC and Women's 
Business centers.
    I would be pleased to answer any questions you may have, and we 
will provide you with additional documentation as requested. Thank you 
again for this opportunity to testify.
          Prepared Statement of Conchy Bretos, Chief Executive
                  Officer, MIA Senior Living Solutions
    Thank you Senator Nelson, Chairman, Senator Susan Collins, Ranking 
Member and other members of the Committee for the opportunity to share 
my thoughts on what it takes to be a later-in-life entrepreneur. There 
are currently 9 million like me and 31 million more to come. I am 
Conchy Bretos, owner of Mia Senior Living Solutions, an innovative firm 
that for the first time provided assisted living services to public 
housing residents back in 1996. Senator Nelson visited our first 
project, the award winning Helen Sawyer Plaza in Miami, back in 1998. 
Since then our firm has worked with public and private entities in 23 
States. Later this spring we will be opening and managing an affordable 
assisted living facility for the District of Columbia Housing 
Authority. Our projects have proven to reduce Medicaid and Medicare 
spending by keeping our residents healthy, away from costly 
institutions, while generating thousands of new jobs and healthy 
operating margins. For the past 2 years we have partnered with low 
income housing tax credit developers, owners of affordable housing and 
private owners/investors to scale our model. This has required a major 
restructuring of our firm and our business model.
    In 1995 I created Mia Senior Living Solutions as a for profit 
company understanding that if our firm was to grow rapidly it had to be 
fueled by profits. As Florida Secretary for Aging under the Lawton 
Chiles Governorship, I got a good understanding of aging issues and 
developed a strong relationship with aging network. I had lived long 
enough to learn from failures, how to deal with detours and the 
inevitable ups and downs. Changing the way we care for low income 
seniors and disabled adults was not a new idea but no one had created a 
successful model to do it. We created a model within an exponentially 
growing market with little competition.
    Starting my own business was as much due to life circumstances as 
it was a career change. An empty nest, the end of a marriage, the loss 
of a job, I reached midlife with an urgency to leave a legacy, to 
contribute, to make money and live to the fullest those bonus years 
that longevity gives us. Wanting to leave an impact on the world grows 
stronger as we age. I asked myself if not now, when? If not me, who? 
For a long time I had dreamed of creating something lasting that would 
connect me with future generations. I did not want to defer this dream 
any longer. Not having health insurance kept me awake at night. I took 
some time to reflect and assess what I wanted to do, what skills I 
possessed and then tested the idea in the real world.
    When my term ended as Florida Secretary for Aging, I came home to 
Miami with some savings from my job and an idea; to convert a public 
housing building into assisted living and allow for true aging in 
place. The Miami-Dade Housing Agency Director wanted to dispose of the 
highly deteriorated Helen Sawyer building in downtown Miami. I told him 
I had an idea I wanted to test in the building. He said yes but he had 
two requirements. One was that I had to prove my idea quickly and two, 
I had to find the funds to do it. That day I formed my company, 
invested some money in stationery and worked on a feasibility report 
with the help of some friends. At the same time I approached the State 
Legislature and was able to get a $1.2 million allocation of Medicaid 
waivers. I was awarded a 5-year contract by the Board of County 
Commissioners to start the conversion of Helen Sawyer Plaza with a 
promise that it would be self-sustainable by the end of the first year. 
We developed detailed budgets, worked on the policies and procedures 
needed, hired the staff needed, secured vendors. I worked very hard 
until what seemed like impossible, happened. We opened the doors of 
Helen Sawyer and in 6 months the place was full with a good waiting 
list. I knew that this first project had to be successful if we were to 
move forward. This innovative project was featured several times in the 
media, won four national awards and became the model for the Nation. It 
became a show place with constant visitors from the entire nation, 
senators, Governors, secretaries and a multitude of housing directors 
who wanted to have one just like the one I had created. I was able to 
negotiate new contracts with housing authorities as far away as West 
Virginia. I was invited to speak at several industry conferences and 
build a community and a larger network. Although we did a lot of free 
work in the beginning, we moved away from the pro-bono and created a 
successful business. It was hard to keep up with demand with only 
myself so in 2001 I asked my daughter, a management consultant in New 
York, to join the firm. To my amazement she accepted. Mother/daughter 
teams weave together business and family life, school schedules, time 
with the grandchildren. All are important parts of the day-to-day 
routine. Succession planning is a prominent topic of discussion. 
Although letting go is not an easy process for me.
    Receiving the first Purpose Prize award in 2006 and becoming an 
Ashoka Fellow in 2010 have certainly been turning points in our 
business life. These awards have provided validation for what we do and 
a network of professionals that are interested in our scaling our 
business. We have received expert and legal advice, mentoring and 
support. We have learned how to present ourselves, how to raise money, 
structure ventures, re-engineer our firm. I know now more about data 
bases, Linkedln, Facebook, electronic health records and blogging than 
I ever wanted. I do not have one boss anymore but many of them, our 
advisors, board members, funders, clients and investors.
    However, most of my fellow entrepreneurs are not so lucky. Lack of 
capital, connections and mentoring remain a major obstacle for us aging 
entrepreneurs. Relying on grants to sustain your work has become an 
impossible proposition. In order to survive, the initiative must 
generate its own source of revenues by selling products produced by the 
company and that can be replicated over and over again.
    Most of our work involves partnering with government to change 
policies that represent obstacles. Today, more than ever, government 
needs individuals like us with the public interest in mind, talented 
and driven. Approaching government usually ends in rejection at least 
that was my case. Two years ago we made a major decision to team up 
with private entities to better grow our business. But this too has its 
new challenges like the distrust by investors of the reliability of 
government subsidies liked the Medicaid waiver or the disconnection 
between the regulations of the Low Income Tax Credit program and 
assisted living. For these investors financial rewards come first and 
social impact is gravy. Maintaining that balance has been a major 
challenge for us. But we know consumers are demanding more socially 
responsible behavior from businesses. Businesses need to catch up with 
this trend. Profits are not everything.
    Everything I have done in my life has led me to this moment of 
being here before you. The journey has not been without challenges and 
obstacles. Age discrimination is real and has been a major factor. 
America is a young country; our models do not include old people. The 
most common image of an innovator is that of a youth creating a great 
idea in a garage, a dormitory, or a makeshift office. In reality these 
are the exceptions. Research tells us that it usually takes 20 years 
for the birth of an idea to become fully implemented. It is around the 
age of 40 or 50 years that individuals are at the peak of their work. 
It has been proven that a 55 year old and even a 65 year old have 
significantly more innovation potential than a 25 year old. It is fair 
to say that less gray hair sharply reduces the innovation potential in 
an organization. Yet, stereotypes like old people cannot learn new 
skills, master new technology, that they take rather than give abound. 
Shattering these stereotypes must be a major priority for all. This 
hearing goes a long way to do that.
    Thank you for the opportunity to speak to you. We hope that out of 
this hearing comes a new understanding of the challenges and 
opportunities individuals like me have encountered and that in the 
future our efforts can be facilitated by your support.
           Prepared Statement of Elizabeth Isele, Co-Founder,
                     Senior Entrepreneurship Works
    Committee members and guests--thank you all for attending this 
hearing to explore the untapped potential of senior entrepreneurs to 
create and drive economic markets in our new Longevity Economy.
    I am Elizabeth Isele, Co-Founder and CEO, 
SeniorEntrepreneurshipWorks.org a senior entrepreneurship education and 
training program and Co-Creator and Founder, eProvStudio.com an 
entrepreneurship exploratory experience workshop for seniors, aged 50+. 
Both of these programs are designed as in-person and online learning 
environments and teacher training initiatives that can be customized to 
meet local needs and replicated throughout the world. Our method of 
entrepreneurship training so resonates with seniors that the demand for 
our programs has grown exponentially through word of mouth.
    Senator Nelson, thank you for co-hosting this hearing on senior 
entrepreneurship, which, as one very astute member of your staff said, 
is one of the most positive things we've had to say about aging in a 
long time. And, thank you, also for making the hearing available to the 
public at large through the live webcast feed on the Aging Committee's 
website. People with whom we work from around the globe are listening 
to our conversation today.
    Special thanks to Senator Mary Landrieu for recognizing the 
economic value of entrepreneuring seniors, and initiating this hearing 
so that others will better understand this opportunity to stimulate 
seniors', their communities' and the nations' economic self-reliance.
    I am especially delighted that Senator Susan Collins is here today. 
Maine is my home but still, today, I shall try to speak without bias. I 
launched my first business as a senior in Maine, which has an 
exceptionally welcoming environment for entrepreneurs. In 1998, at age 
56, I saw a need (teaching other seniors like myself how to use 
technology to remain relevant in our digital world). At first, in my 
naivete, I thought all I had to do was tell seniors about this 
remarkable tool and they'd flock to the Internet. That naivete was 
short-lived as I realized I first had to help seniors understand the 
value of the technology in ways that were meaningful to their 
individual lives. Then, I had to create a curriculum that was 
compelling and easy to understand. Then, I needed a computer lab to 
test the program and a way to encourage seniors to participate. The 
director of the Portland (Maine) Adult Learning Center ``loaned me her 
computer lab for Saturday mornings. Senior services allowed me to put 
posters in senior community and living centers, ``Do computers have you 
flummoxed and does the World-wide Web make you think of giant spiders? 
Come and see what it's all about in this FREE workshop.''
    I did not have buckets of money to invest in this endeavor, but I 
knew it was important to do so, so I drew upon resources at hand to 
create a business that was supported by experienced individuals, local 
banks, internet service providers, public and private foundations, 
national organizations such as Microsoft and the National Institutes of 
Health.
    We started with 12 seniors in Portland, Maine in the Saturday 
morning workshop and within 5 years there were more than 28,000 being 
trained in CyberSeniors' workshops across the US.
    We succeeded because we had a cross-sector support ecosystem--
programs, capitalization, policy and research. Each of us here today 
are part of that ecosystem, as stakeholders in the social and economic 
well-being of our seniors. Seniors' economic well-being translates into 
national economic well-being.
    Seniors like Conchy Bretos here today. Seniors like Joe James who 
started by building a public market for impoverished, rural Black 
farmers who were leaving their farms in North Carolina in droves. He 
launched farmers, selling their produce at the farmers market, on the 
path to self-sufficiency. When there was produce left over at the end 
of the day, Joe realized he could convert it into bio-fuel. As he did 
this, he thought why not have the farmers plant seeds specifically for 
creating bio-fuel. To make a rich and long story short, today Joe has a 
multi-million dollar agri-tech business and an environmental program 
called ``the Greening of Black America.''
    Given the size, growth forecast, and the depth of expertise in the 
senior demographic, they are an untapped resource we can no longer 
continue to ignore. In the U.S., people aged 50 and older will 
represent 45 percent of the total population by the year 2015, and for 
this demographic ``entrepreneuring certainly trumps aging.''
    My partners at Babson College and I have launched another platform 
eProvStudio.com, to fill a significant gap in entrepreneurial education 
and training. While there are programs for the 34 million self-
identified senior entrepreneurs in the US, including my 
SeniorEntrepreneurshipWorks.org which has trained hundreds of senior 
entrepreneurs since it was launched in 2012, there are no programs for 
the millions of other seniors who, while totally intimidated by the 
word, entrepreneur, are eager to explore the opportunity. eProvStudio 
is designed to create a safe, user-friendly runway to ease and lift 
seniors into entrepreneuring. Combining the methodology of 
entrepreneurial thought and action and the art of improvisation, 
eProvStudio puts the skills and mindset of entrepreneuring into the 
hands of seniors to help them ignite and build ideas into viable 
business opportunities so they can create their future of prosperity. 
Seniors learn how to maximize their experience and resources garnered 
over the past 50+ years to create anew, retiring to something not from 
something.
    I've just returned from delivering an eProvStudio workshop in 
Sarasota, Florida at the Institute for the Ages, 7th Annual 
International Positive Aging Conference. We had capped the workshop at 
30 participants who are ready to explore entrepreneuring, but an 
additional six slipped in. We had to condense our 2-day workshop 
experience into 4 hours. The energy was palpable as the 50+ year olds 
eagerly embraced every improvisational exercise we offered to decode 
their entrepreneurial history. Potential never ages.
    Senior Participants left with:

      An expanded view of what's possible
      An understanding of the difference between being goal 
driven and resource driven
      Strategies to amplify their resources by learning how to 
enroll others
      A means to capture and articulate--through a simple plan, 
prototype, or drawing--their ideas
      A methodology to practice learning, building and acting 
on their ideas
      A networked community (real and virtual) of eProv 
participants and Hub facilitators to continue acting, learning, and 
building together
What We Know About Senior Entrepreneurs
      MetLife Foundation research documents there are 34 
million seniors who wish to start their own business
      Kauffman Index of Entrepreneurial Activity (Robert W. 
Fairlie, Kauffman Foundation, 2012): One fifth of new entrepreneurs in 
2011 were older adults, according to a recent report from the Kauffman 
Institute. According to the study, an aging population and increasing 
rate of entrepreneurship among older ages has led to a rising share of 
new entrepreneurs (non-business owners who start a new business during 
the year) in the 55-64 age group. Furthermore, research shows that 
since 1996, Americans between the ages of 55 and 64 have had a higher 
rate of entrepreneurial activity than those aged 20-34. http://
www.kauffman.org/uploadedFiles/KIEA_2012_report.pdf
      The EU has invested more than 3 million euros to create 
model senior enterprise programs, and has identified senior enterprise 
as key to economic recovery in the EU their 2020 strategic plan.
      In the UK, `third age' entrepreneurs are responsible for 
over one quarter of new startups.
      The 2013 GEM (Global Entrepreneurship Monitor) data 
documents that 50 percent of new businesses launched by individuals 
aged 50+ are still in business after 5 years.
      More than 60 percent of boomers are building green 
businesses.
      According to the Employment and Disabilities Institute at 
Cornell University, of non-institutionalized PWD over 50 who are 
employed:

    --477,000 are self-employed in their own non incorporated business, 
professional practice, or farm
    --214,000 are self-employed in their own incorporated business, 
professional practice or farm.
Why Senior Entrepreneurship Matters
Economic Impact
    Senior entrepreneurs impact workforce development, job creation, 
improved productivity and wealth creation as they pour investment 
dollars back into their communities.

      Job Creation--While the majority of senior entrepreneurs 
create small and micro-businesses their 5-10 employee hires have a huge 
cumulative affect on job creation. As Gina Harman, President and CEO, 
Accion USA, says, ``Of the 27.8 million businesses in the U.S., 91 
percent have fewer than five employees. These businesses have been the 
largest net contributor of new jobs to the U.S. economy in the past 15 
years and collectively employ 50 percent of all private sector 
employees.''
      According to the ``One in Three'' research sponsored by 
the Association for Enterprise Opportunity, ``If one in three 
microenterprises in the United States hired an additional employee, the 
US would be at full employment.''
      Senior Business Start-ups (micro to big businesses) 
present new market lending opportunities and CRA tax credits for 
community banks and credit unions as well as large commercial banks.
      Senior Entrepreneurs and employed adults, aged 65+, 
contribute $120+ billion in Federal taxes alone, that is not including 
State taxes, annually to support Federal programs and reduce dependency 
on entitlement programs.
      Senior Business Start-ups present new digital business 
opportunities through increased demand for technology (products and 
services). Many seniors participate in the culture of ``Artisanal 
Capitalism.'' 90-year-old Pearl Malkin, for example, aka ``Kickstarter 
Granny'' launched her business ``Happy Canes'' after her grandson 
helped her launch a successful $3000 Kickstarter campaign for seed 
money to create her happy canes and sell them in Etsy, the online 
marketplace for hand-made arts and craft products.
      Big businesses or ``Gazelles'' may grow faster but they 
fall harder. The cumulative affect of successful small businesses can 
have as great and more sustainable impact.
Health and Social Impact
      Boomer Entrepreneurs live healthier (physically, 
mentally, emotionally), vital, relevant, productive, and more 
meaningful lives longer than their retired counterparts.
      Healthy Seniors create less demand on social service/
entitlement programs--in fact they continue to contribute to Social 
Security and Medicare through their taxes.

    Senators, we do not need to create millions of dollars in new 
funding to support senior entrepreneurship, we believe that by tweaking 
existing Federal Programs and Public Policy in the following ways and 
by creating actionable research we can amplify senior entrepreneurs 
social and economic impact.
Foster Inclusive Entrepreneurship
      Entrepreneurship initiatives must reach out to 
traditionally excluded communities such as 50+ year olds and 50+ year-
olds with disabilities
      Deliver business development support services that are 
accessible to all entrepreneurs, including disabled senior 
entrepreneurs
      Align business startup policies at the local, regional 
and national levels
      Energize entrepreneurial communities to foster an 
entrepreneurial approach to economic development.
      Support the swelling numbers of self-employed, small and 
micro-business in US who are driving a new round of economic and social 
progress and prosperity.
Create Greater Access to Capitalization for Senior Entrepreneurs
      Increase engagement of mainstream economic development 
support for senior business startups
      Design actions to mitigate special obstacles senior 
entrepreneurs face, such as age bias from lending institutions
      Develop loan guarantees and mutual guarantees to 
stimulate private sector funding for senior business startups
      Develop more microcredit initiatives with competitive 
delivery mechanisms to target special populations such as seniors with 
greatest chances of success
      Increase financial regulations' support information flow 
between borrowers and lenders
      Improve access to finance, support matching and 
networking of investors and entrepreneurs
      Develop co-investment and fund matching initiatives to 
increase the supply of funds for senior business startups
      Provide grants for business startups where loans are not 
feasible
Education
      Support more training programs customized to meet the 
needs of the 34 million self-identified senior entrepreneurs and those 
looking to explore entrepreneurship
      Make SBA information on business startup support more 
accessible and easy to understand
      Educate senior entrepreneurs on bootstrapping methods, 
and new means of capitalization such as crowd-funding
      Promote entrepreneurship training in workforce 
development and unemployment programs
      Provide more opportunity for seniors to learn 
entrepreneurship through business simulations and competitions
      Provide training for business support providers, mentor, 
and coaches related to the specific needs of senior entrepreneurs
      Provide more education about selling or transitioning a 
business to avoid unnecessary closings and job losses
Long-term Unemployment
      Expand policy and programs such as SEAP in the US or 
British Enterprise Allowance Scheme or French Chomeur Createur to 
capitalize a business startup without penalty
      Create policy to prohibit bias against hiring long-term 
unemployed seniors
Business Startup Regulations and Tax Incentives
      Streamline administrative processes related to business 
startups and simplify business regulations, particularly for micro-
businesses
      Develop tax incentives for seniors starting businesses 
including EITCs
      Develop tax incentives for private investors willing to 
finance senior startups
Research
    Despite its important implications for older adults' financial 
security and national economic growth, entrepreneurship at older ages 
is a relatively understudied area. There's a great need to collect and 
analyze data to best understand the entrepreneurial arc regarding 
ideation, opportunity identification, sustainability, growth and exit 
strategy/business transition for the 50+ year-old entrepreneur.
Questions to be addressed include:

      What are the characteristics of senior entrepreneurs 
(income, age, gender, minority status, ethnicity, geographic region, 
prior work history/business training, etc.)?
      What are the characteristics of the enterprises started 
by older adults (industry sector, product or service, workforce size, 
tax structure, years in business, years to break-even/profit, personal 
funds invested, investment capital, etc.)? What types of businesses are 
most likely to succeed/fail?
      How do senior entrepreneurs differ from their wage and 
salary counterparts in terms of their levels of financial literacy and 
their tolerance for risk?
      What are the individual outcomes (e.g., health and well-
being, financial security, job satisfaction), community outcomes (e.g., 
employment, consumer confidence, spending and economic recovery), and 
enterprise outcomes (e.g., revenue) associated with senior business 
startups?
      What are the barriers faced when trying to access 
finance?
      What external support exists for the crucial phases of 
business life-cycle and growth?
      How has technology (products, services, e-commerce) 
facilitated senior business startups?
      What role does environmental sustainability play in these 
startups? (More than 60 percent of senior startups are green 
businesses.)

    We need to stop the gloom and doom we are generating by referring 
to this huge and rapidly expanding demographic as an impending crisis 
or ``Silver Tsunami.'' We, as a society, need to recognize seniors are 
one of our greatest natural resources. They are not a ``silver 
tsunami,'' they are a silver lining, yielding golden dividends.



      
      
      
      
      
      
      
      
      
      
      
      
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                        Questions for the Record

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                 U.S. Senate Special Committee on Aging

              "In Search of a Second Act: The Challenges 
               and Advantage of Seniors Enterpreneurship"

                           February 12, 2014

                        Questions for the Record

                           Tameka Montgomery

                   Senator Mary L. Landrieu, Chairman

    Question:

    In your testimony, you mention the SBA's partnership with 
AARP and SBA Resource Partners trained almost 120,000 encore 
entrepreneurs in 1 year. This was 20,000 over the agency's goal 
of training 100,000 encore entrepreneurs. In your testimony you 
also mention that this partnership has resulted in an increase 
in older Americans utilizing SBA programs.

    Can you provide additional details on this partnership 
increased awareness of SBA programs?

    Response:

    Through our joint web-based services--SBA's online training 
courses and its nationwide network of business mentors and 
counselors--the two organizations have combined to increase 
awareness by hosting mentoring sessions, informational 
webinars, speaking engagements, and promoting activity across 
SBA's website and social media channels. A segment of offline 
and online sessions is focused on directing encore 
entrepreneurs to existing services such as SBA mentor programs 
so the clients could benefit from longer term assistance. This 
partnership, like many SBA alliances, drives additional 
referrals to our local service providers that can meet the on-
going needs of aspiring entrepreneurs.

    Question:

    Do you have any numbers on how many seniors were contacted 
about the in-person and online training sessions?

    Response:

    While the nature of this year-long initiative restricts our 
ability to attribute specific marketing campaigns to individual 
activities (e.g. webinars and local classes) promoted by SBA, 
AARP, and a host of press outlets, we can report that National 
Mentor Month which just concluded resulted in outreach 
impressions of 140 community events with more than 3,700 
attendees and over 3,900 customers accessing online specific 
training courses. Additionally, our resource partner network 
(Small Business Development Centers, SCORE, Women's Business 
Centers, as well as SBA District Offices) engaged in direct 
client contact.

                 U.S. Senate Special Committee on Aging

              "In Search of a Second Act: The Challenges 
               and Advantage of Seniors Enterpreneurship"

                           February 12, 2014

                        Questions for the Record

                           W. Kenneth Yancey

                   Senator Mary L. Landrieu, Chairman

    Question:

    As you know, this week Senator Risch and I introduced S. 
2008, the ``SCORE for Small Business Act.'' This bill would 
gradually increase SCORE's authorization level from its current 
$7 million up to $10.5 million by 2017. S. 2008 also requires 
SCORE to improve outreach in rural areas and ensure diversity 
among both its volunteers and businesses served by the 
organization.

    Can you provide information on SCORE program outcomes 
(clients assisted, businesses started, and jobs created)?

    Can you comment on how these increased funds would allow 
SCORE to reach more businesses?

    Response:

    Thank you for the question Sen. Landrieu and for your 
continued strong support of SCORE through the introduction of 
S. 2008.
    As you and the Committee already know SCORE is one of the 
most efficient, effective business formation and job creation 
engines currently funded by the Federal Government. In fiscal 
year 2013, SCORE volunteers helped clients to create more than 
67,000 new jobs and more than 38,000 new small businesses, with 
another 40,000 increasing their revenue. SCORE delivered that 
assistance at a cost to the taxpayer of $167 per business and 
$96 per new job. SCORE provides a return of $47 to the Federal 
treasury for every dollar appropriated to SCORE. SCORE's goal 
has been to help grow 1 million successful businesses by 2017. 
At this time we project that we will exceed that goal by more 
than 250,000 businesses.
    The additional funding provided by S. 2008 would allow 
SCORE to extend its reach and serve more existing and aspiring 
entrepreneurs with even better quality and increased outcomes. 
By serving more people with better quality and bigger outcomes, 
SCORE can have an even greater impact on America's economy. The 
first year of increased funding would be used to ``prepare for 
growth''. Growth means attracting clients, recruiting 
volunteers, improving infrastructure and service in underserved 
markets as well as developing new tools to aid in the 
mentoring/education process. In the second and third years, 
SCORE would grow its services in the communities it serves and 
improve the resulting outcomes of that service. We project a 20 
percent increase in client volume and a 30 percent increase in 
outcomes, businesses formed, jobs created and sales growth by 
2018 as a result of the increased funding and support.
    Thank you again for your support of SCORE and for this 
question. I hope you find this helpful. If I can provide more 
detail please let me know.

                 U.S. Senate Special Committee on Aging

              "In Search of a Second Act: The Challenges 
               and Advantage of Seniors Enterpreneurship"

                           February 12, 2014

                        Questions for the Record

                             Conchy Bretos

                   Senator Mary L. Landrieu, Chairman

    Question:

    In your testimony you mention that although your business 
has been successful, you have had to re-structure your firm and 
modify your business plan. This is because you have begun 
partnering with private investors and Low-Income Housing Tax 
credit developers to scale up your model.

    Many senior entrepreneurs are successful in starting a 
business but struggle mightily when they have to make changes 
to their business plan. Can you discuss how you approached this 
challenge and any recommendations you might have for seniors in 
similar situations?

    Response:

    Business plans are supposed to change constantly according 
to the challenges and opportunities the organization is faced 
with. It should not be a static document. Our main goal is to 
scale our business. In order to do that we needed to seek new 
partners. In our case it was private developers, owners and 
private investors. How you approach these new opportunities 
requires a well developed ``pitch'', pro formas, presentations. 
We did not know enough how to do this ourselves so we sought 
assistance from business consultants and owners. There are 
several organizations that do this for you like SCORE, 
Endeavor, Ashoka, that provide mentoring on a pro bono basis. I 
would recommend that seniors wishing to approach new markets/
opportunities seek this type of mentoring/help.

                 U.S. Senate Special Committee on Aging

              "In Search of a Second Act: The Challenges 
               and Advantage of Seniors Enterpreneurship"

                           February 12, 2014

                        Questions for the Record

                            Elizabeth Isele

                   Senator Mary L. Landrieu, Chairman

    Question:

    In your testimony, you outline your experience as a senior 
entrepreneur and how you have built these strong partnerships 
with organizations around the country. I was particularly 
impressed with your project with Babson College as they have 
testified before our committee before and are well respected in 
the area of entrepreneurship education. I am interested in your 
views on how the Congress can better assist these public-
private partnerships in scaling up.

    As you note, the European Union has already invested 3 
million euros to create model senior entrepreneurship programs. 
Do you see a role for the Federal Government in making similar 
investments here in the United States?

    If so, is there one agency that is more appropriate to take 
the lead on this initiative and how would you recommend we 
structure such a program?

    Response:

    Now that we are beginning to understand the ``golden 
dividends''--economic, social and environmental--created by 
encore entrepreneurship, it is imperative for Congress to 
create an innovative, inter-agency framework to marshal 
resources, catalyze strategic thinking, prioritize new policy 
and create actionable research to advance this movement.
    Just as the European Union has created a model 
infrastructure of public/private investment, education and 
training programs, policy and research to support senior 
enterprise, which it has identified in its 2020 strategic plan 
as key to economic recovery in Europe, I recommend the US 
Congress appoint a special committee to spearhead and 
coordinate an inter-agency, bi-partisan support infrastructure, 
including but not limited to:

Small Business and Entrepreneurship

      Entrepreneurship education programs, customized 
to meet the needs of the 34 million self-identified senior 
entrepreneurs and those looking to explore entrepreneurship, 
including those with disabilities
      Expand education about and access to micro-loans 
and crowdfunding capital to support the swelling numbers of 
seniors' self-employed, and small and micro-business in US who 
are driving a new round of job creation and prosperity
      Reduce loan interest rates for seniors, as in 
existing business financing programs for veterans, women and 
minority owned businesses
      Develop co-investment and fund matching 
initiatives to increase the supply of funds for senior business 
startups
      Provide grants for business startups where loans 
are not feasible
      Highlight the possibility of acquisition, rather 
than startup of a business, as a means into entrepreneurship 
for an older person, as it may be quicker and less risky

Banking, Finance and Treasury

      Even though seniors assets are by far the largest 
proportion of banking revenues, most banks fail to understand 
the needs of those seniors and certainly not their 
entrepreneurship or business startup needs
      Increase engagement of mainstream private as well 
as Federal Reserve and CDFI economic development support to 
capitalize senior business startups
      Design actions to eliminate special obstacles 
senior entrepreneurs face, such as age bias, from lending 
institutions. This could include creating new criteria for 
credit worthiness and risk assessment such as acknowledging the 
seniors' life and work experience: such as: long-term, gainful 
employment; knowledge of how to operate in a business 
environment; has held payroll or balance sheet responsibility; 
understands human resources, benefit and pension programs, etc
      Develop loan guarantees and mutual guarantees, 
similar to mortgage guarantees to stimulate private sector 
funding for senior business startups
      Develop more microcredit initiatives with 
competitive delivery mechanisms to target special populations 
such as seniors with greatest chances of success
      Develop tax incentives for seniors starting 
businesses including EITCs
      Ensure that tax and social security systems do 
not contain disincentives to entrepreneurship for older people, 
including investment in other businesses
      Develop tax incentives to encourage private 
investors to finance senior startups. National initiatives 
directed toward senior entrepreneurs, based on these 3 
exemplary Maine models, would boost the number and 
sustainability of senior entrepreneurs' business development:

    --Employment Tax Increment Financing (ETIF) is a State 
program that helps new and established Maine businesses to hire 
new employees by refunding from 30-80 percent of the State 
withholding taxes paid by the business for up to 10 years. The 
reimbursement rate rises with the level of local unemployment, 
with those in Pine Tree Development Zones receiving the highest 
ate
    --Tax Increment Financing (TIF) is a flexible finance tool 
used by municipalities, towns, plantations, and the Unorganized 
Territory to leverage new property taxes generated by a 
specific project or projects within a defined geographic 
district. Any portion of the new taxes may be used to finance 
public or private projects for a defined period of time up to 
30 years
    --Maine's SEED Capital Tax Credit Program. This program is 
designed to encourage equity and near-equity investments in 
eligible Maine businesses, directly and through private venture 
capital funds. FAME may authorize State income tax credits to 
investors for up to 50 percent of the cash equity they provide 
to eligible Maine businesses. Investments may be used for fixed 
assets, research or working capital

Commerce

      Expand BTOP (Broadband Technology Opportunity 
Programs) grants to provide broadband access necessary for 
seniors launching businesses in rural areas

Labor

      Expand policy and programs such as SEAP in the US 
or British Enterprise Allowance Scheme or French Chomeur 
Createur to permit long-term unemployed seniors with minimal 
opportunities of being rehired to capitalize a business startup 
with their unemployment benefits without penalty
      Provide entrepreneurship education and training 
in workforce development and unemployment programs

    The Committee should also design and host additional 
hearings and/or a congressional summit to convene cross-sector 
stakeholders to create a blueprint to advance this new 
movement: ``Senior Entrepreneurs: New Engines for a New 
Economy.''

    Question:

    I understand that while there is some research on senior 
entrepreneurs, including studies by the Kauffman Foundation and 
the MetLife Foundation, this area has not been as thoroughly 
studied as other populations of businesses. In terms of truly 
understanding the needs of this group, it would be helpful to 
have better data and studies outlining unique characteristics 
of senior entrepreneurs. That way policymakers and groups such 
as our witnesses today can better assist seniors looking to 
start or grow a business.

    Are there any specific aspects of senior entrepreneurship 
that researchers should focus their efforts on?

    Please name organizations that you believe are doing 
helpful research into senior entrepreneurship issues.

    Response:

    Despite its important implications for older adults' 
retirement well-being and national economic growth, 
entrepreneurship at older ages is a relatively understudied 
area. There's a great need to collect and analyze data to best 
understand the entrepreneurial arc regarding ideation, 
opportunity identification, sustainability, growth and exit 
strategy/business transition for the 5050+ year-old 
entrepreneur.

What do we need to know about senior entrepreneurs?

    Some important questions include:
      Who seeks to start a business after age 50? What 
are their rationales and motivations?
      What types of businesses do they start?
      How has technology (products, services, e-
commerce) facilitated senior business startups?
      What role does environmental sustainability play 
in these startups? (More than 60 percent of senior startups are 
green businesses.)
      How successful are those businesses (survival 
rates, sales, profitability), and what factors contribute to 
success and failure?
      What kinds of business skills development, 
mentoring, and advisory support do older entrepreneurs 
currently use? Do these resources meet their needs?
      How does self-employment affect older adults' 
health, satisfaction, and financial well-being?
      What is impact of these new businesses on the 
economy and in communities (jobs creation and economic 
stimulation)?

    Expanded research in any of these areas would help 
policymakers and business advocacy agencies to better 
understand this large and rapidly growing cohort, and provide 
evidence to assess program and policy effectiveness and to 
guide intervention development. In this regard, the 
``Empowering Encore Entrepreneurs Act of 2013'' (S. 1454) call 
for a report that reviews potential ``barriers and obstacles'' 
(e.g., access to finance) is an important first step toward 
building a policy framework that encourages and supports those 
who take the entrepreneurial path in later life.
    Organizations in the US which are currently doing and/or 
designing important new research in this area include: Babson 
University; Stanford University; Washington University/St 
Louis; Boston College; UNC Chapel Hill; AARP and the AEO 
(Association for Economic Opportunity).
    Working in partnership with Senior Entrepreneurship Works, 
The Gerontological Society of America convened a summit of 
thought leaders in the areas of aging, employment, banking, 
microfinance, entrepreneurship and public policy to develop 
cross-sector consensus about priorities for research, programs, 
policies, and capitalization options to advance self-employment 
and entrepreneurship in mid-life and beyond. At your request, 
we would be happy to provide more detail on the outcomes of the 
October 2012 ``New Engines for a New Economy'' Summit, as well 
as provide contacts for any of our key researchers and 
stakeholder participants.
    As I testified in the February hearing, ``We need to stop 
the gloom and doom we are generating by referring to this huge 
and rapidly expanding demographic as an impending crisis or 
`Silver Tsunami.' We, as a society, need to recognize seniors 
are one of our greatest natural resources. They are not a 
'silver tsunami,' they are a silver lining, yielding golden 
dividends.''



      
      
      
      
      
      
      
      
      
      
      
      
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                       Statements for the Record

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           Statement of Senator Mary L. Landrieu, Chairman, 
            Committee of Small Business and Entrepreneurship

    Good Morning. I would like to thank Chairman Nelson and 
Ranking Member Collins for agreeing to this joint hearing on 
senior entrepreneurship. Given the focus of the hearing and its 
importance for many of our constituents, it is only fitting 
that our committees ``team up'' on this issue.
    Today, the term ``entrepreneur'' brings to mind young 
computer geniuses like Bill Gates, Mark Zuckerberg or Steve 
Jobs. When one mentions the term ``startup,'' most people 
conjure up images of a technology business in Silicon Valley or 
Boston. A mother working from home selling handmade jewelry on 
Etsy is not considered an ``entrepreneur.'' Similarly, when a 
30-year veteran of the oil/gas business retires to start his 
own oil field supply company, unfortunately, that is not seen 
as a ``startup.'' If we are going to continue creating jobs and 
compete with our foreign competitors, this mindset needs to 
change. The United States is at our best when we have everyone 
on the field helping to grow the economy.
    That is why I am excited about today's hearing focusing on 
senior entrepreneurs, or ``encore'' entrepreneurs, which is the 
term used by former U.S. Small Business Administration (SBA) 
Administrator Karen Mills. While starting a business is not 
right for every senior, for some with the right experience and 
resources, it is a promising way to supplement their nest egg. 
This is more attractive than in the past as technology today 
allows encore entrepreneurs to work from home and control their 
schedule. There have also been recent developments that now 
allow entrepreneurs to explore financing from ``crowd funding'' 
sites. Seniors that take advantage of these technology advances 
and other available resources are more prepared to navigate the 
difficulties of starting a business.
    In Louisiana, there are approximately 960,000 residents 
over the age of 55. The percentage of citizens over 65 is 12.9 
percent--slightly less than the national average of 13.7 
percent.
    Moreover, approximately 50 percent of all self-employed 
individuals in the State are over age 50.
    One of these Louisiana encore entrepreneurs is Ms. Edna 
Wheless from Logansport. She contacted my office in 2009 as she 
was looking to start a new magazine ``DeSoto Life Magazine'' 
for DeSoto Parish. This magazine would focus on DeSoto Parish 
and activities surrounding the parish, including photos and 
stories on local residents. Her plan was to print the magazine 
bi-monthly and mail it to subscribers. Ms. Wheless was well 
positioned to start this business as she published a weekly 
newspaper in Logansport from 2001 to 2008--winning numerous 
awards from the Louisiana Press Association. She has also 
authored several books on DeSoto Parish.
    I am proud that DeSoto Life Magazine, the first of its kind 
in the area, first published in January 2010. In the third year 
of publication, it circulates 3,000 companies every other 
month. The magazine has become a sought after local collector's 
item with subscriptions running $16 annually.
    Ms. Wheless also expanded into an online newspaper after a 
local technical assistance center suggested that she cut her 
business costs by putting the magazine on the Internet. The 
website, desotoparishtoday.com, publishes information on public 
meetings, including the Police Jury and other groups. However, 
as I hear from other seniors in rural areas in my State, high-
speed broadband is still not readily available in her area. 
Dial-up services, which are available, are extremely slow. As 
Ms. Wheless relayed to my office, ``[We] beg and plead for 
businesses to come into our parish to help provide jobs, but we 
do not have the proper amount of infrastructure to help 
struggling businesses get up and going. Broadband would be of 
particular interest to businesses in the greater part of DeSoto 
Parish.'' I understand this is a challenge for many seniors in 
rural communities--they want to take advantage of new 
technology but local infrastructure is not keeping pace with 
more urban communities.
    These technology challenges are frustrating because the 
numbers show how promising this segment of entrepreneurs could 
be for our economy. According to the SBA, more than 5 million 
Americans 55 or older have their own business are self-
employed. Furthermore, the Kauffman Foundation found that from 
1996 to 2010, 26 percent of entrepreneurial activity was 
produced by people ages 20 to 34 versus 39 percent produced by 
people ages 55 to 64. This difference is expected to widen as 
more Americans age over the next two decades.
    Another example of an encore entrepreneur is Maxine Clark, 
the 63-year old founder of Build-a-Bear Workshop. She worked 
her way up the corporate ladder--eventually becoming the 
President of Payless ShoeSource. However, although the 
financial rewards were high she was ready for a new challenge 
and left the company in 1996. While on a shopping trip with her 
friend's children, she learned there were business 
opportunities in helping kids create their own stuffed animals. 
After doing research with her friends and their kids, she came 
up with a million dollar idea. This idea was to set up a 
workshop in the mall where kids could build their own teddy 
bears.
    Today Build-a-Bear Workshop has over 400 stores worldwide 
and generates revenue in the hundreds of millions of dollars. 
It has also been regularly named in Fortune's 100 Best 
Companies to Work For. The business was started with $750,000 
from Clark's retirement account and a bank line of credit 
secured with her home as collateral.
    While this is a success story many times over and Ms. Clark 
should be commended for both her business acumen and 
philanthropy, most seniors do not have this type of financial 
wherewithal. Instead, seniors often seek help from family and 
friends or take on credit card debt to finance startup costs.
    To help these individuals, in May 2012, the SBA launched a 
strategic partnership with AARP. This partnership focused on 
providing counseling and training to entrepreneurs over 50 who 
want to start or grow a business. By October 2013, the 
collaboration had met and exceeded its goal by assisting almost 
120,000 ``encore'' entrepreneurs. This met the goal of training 
100,000 new and existing business owners and topped it by 
20,000! The assistance was provided, utilizing existing 
resources, through events with SBA resource partners (Small 
Business Development Centers, SCORE and Women's Business 
Centers) and through a series of SBA/AARP webinars.
    In Louisiana, the SBA held four events between 2012 and 
2013. Almost 80 people attended these events and there are two 
more SBA/AARP events planned for Baton Rouge and New Orleans in 
the coming months. I am excited that this partnership has 
allowed the SBA to more effectively target its services to 
encore entrepreneurship. Also, I understand that this 
initiative has increased the number of older Americans taking 
advantage of SBA programs.
    With this in mind, last year Senator Nelson and I 
introduced S. 1454, the ``Empowering Encore Entrepreneurs 
(E\3\) Act.'' This bill would buildupon these successful 
efforts by SBA and help seed additional partnerships around the 
country. The E\3\ Act would provide the SBA with additional 
resources to conduct these in-person and online training events 
for seniors. Our bill would also require a report to Congress 
where the SBA would outline unique barriers and obstacles faced 
by encore entrepreneurs in starting/expanding businesses. S. 
1454 has been endorsed by AARP and my colleague Representative 
Joe Garcia will be introducing the House companion bill in the 
coming weeks.
    In closing, as Chair of the Small Business Committee, I 
spent a great deal of time focusing on identifying successful 
public-private partnerships around the country. Our goal was to 
highlight these successful models so that they hopefully could 
be scaled up or replicated elsewhere around the country. 
Examples of these programs include the SBA Veterans Business 
programs; the successful SBA Small Business Investment Company 
program, and the top-rated entrepreneurship education programs 
at Babson College in Massachusetts. I was pleased to note that 
Senior Entrepreneurship Works is partnering with Babson on a 
senior entrepreneurship curriculum. For this reason, I look 
forward to the testimony today, especially from SCORE and 
Senior Entrepreneurship Works as they are working directly with 
seniors to promote entrepreneurship. They are also bringing 
together Federal, State and local groups to better target 
programs for senior entrepreneurs.
    I thank the Chair and ask that a full copy of my Statement, 
as well as a copy of S. 1454 and the February 11, 2014 letter 
from AARP appear in the record.

 Statement of Senator Bill Nelson, Chairman, Special Committee on Aging

    Good morning, and welcome to this joint hearing of the 
Special Committee on Aging and the Committee on Small Business 
and Entrepreneurship.
    I'm glad to be joined by my friend Senator Landrieu, who 
has been a champion on small business issues for years.
    In the coming days she'll pass the gavel to Senator 
Cantwell, who will continue in the tradition of being a strong 
advocate for small businesses.
    Today, we're going to take a look at senior 
entrepreneurship. In recent years, a significant number of 
older Americans have gotten into the business of creating their 
own business. In fact, over the last decade, the highest rate 
of entrepreneurship in the U.S. has shifted to those in the 55-
to-64 age group.
    As we'll hear today, there are a lot of benefits associated 
with senior entrepreneurs, including strengthening their own 
personal retirement security.
    Seniors can also bring a wealth of experience from their 
own work history that can be very valuable when they face 
expected bumps in the road.
    And despite the misconception that supporting senior 
entrepreneurs hurts the young, studies have found just the 
opposite. For every senior entrepreneur, they need assistance 
from younger workers in such areas as marketing and 
technological support.
    However, it isn't an easy road for seniors who decide to 
become entrepreneurs. They often have difficulties finding 
financing, and can be deterred by concerns about health care 
coverage. We expect that the Affordable Care Act will diminish 
some of those concerns, as seniors and other workers will no 
longer feel attached to other jobs for the sake of maintaining 
their health insurance coverage.
    We have an exceptional panel today, and I want to thank 
everyone for being here.

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