Innovation Challenge Asks Budding Baby Boomer Entrepreneurs 'What's the Big Idea?'
MADISON, Wis. -- Americans in the emerging baby boomer category are forming small businesses at a rate higher than their younger counterparts.
With that premise in mind, one of the Filene Research Institute's i3 innovation groups has developed The Big Idea Evaluator to help aspiring entrepreneurs evaluate the market-worthiness of their enterprise and the team that developed this tool is now looking for credit unions interested in piloting the idea.
Based on respondents' answers to questions in three categories--market, management, and money--the Big Idea Evaluator gives them feedback, offers advice and counsel, and suggests resources to help refine plans and create successful new ventures.
To attract attention to the tools and business services credit unions have to offer, the team has put a "reality-style twist" on their project. Dubbed "What's The Big Idea Challenge," the challenge consists of a three question, online application that outlines the member's business proposition. The winner will receive a $3,000 marketing package including logo and stationery design and printing.
The $345 million Mazuma Credit Union is currently piloting the challenge, which will run through March 31 and is open to non-members and members. Submissions are judged by current Mazuma business members, according to Filene.
"'What's the Big Idea Challenge' gives our members a simple, easily accessible resource through which to develop their ideas," said Eric Jones, vice president, business services at Mazuma. "The boomer target market also has significant equity and savings with which to launch their business, thereby reducing initial risk to the credit union."
Americans aged 55 to 64 form small businesses at a higher rate than any other age group--28% higher than the adult average, according to Lisa Renner, i3 member and president/CEO of CU Holding Company, LLC, an aggregation of Mazuma CUSOs, citing data from the Kauffman Foundation, a foundation that promotes entrepreneurship. Baby boomers now total roughly12% of the United States population, yet they account for nearly 18% of credit union members, equal to approximately 16 million individuals.
Renner said instead of seeking new sources of members to fund a credit union's growth, a better option may exist.
"If credit unions can modify their business model to provide consumer-like and consumer-friendly services to small businesses started by baby boomers, they can succeed in growing this market and serving them in ways other financial institutions are not," Renner said.
Credit unions can attract this emerging group by developing tools to assist them in evaluating business ideas and providing resources to help them take their ideas from conception to implementation, Renner explained.
Indeed, small business accounts typically carry larger balances than retail accounts, accordingto data from a June 2007 Raddon Financial Group report. The average balance for a commercial account was $7,422 compared to $2,307 for a retail account. The number of services used per household was 3.59 for commercial account holders compared to 2.79 for retail account holders.
"For years the industry has looked for ways to attract younger members, ignoring the opportunity staring us in the face," Renner said. "We own this age group. It's just a matter of anticipating their next need so we can help them turn their dreams into reality."
The $1.3 billion Wright-Patt CU and $4.8 billion Alliant CU are also scheduled to pilot the What's the Big Idea Challenge, according to Filene.
In addition to CU Holding Company, $234 million Maine State CU, $869 million Educators CU, Alliant CU, and Wright-Patt CU are part of the Filene i3 innovation group that created the challenge.