Who says you can’t work when you retire?
Back in the day, you clocked out for the last time, turned in your hard hat, and never took another job. Times have changed. Becoming your own boss later in life isn’t uncommon. In fact, according to the Kauffman Index of Entrepreneurship, people ages 55–64 make up 24% of new entrepreneurs!
If you say goodbye to your career to venture off on your own, here’s a quick checklist to keep you on track:
- Consider the start-up costs.
- Research the viability of your business or service.
- Create business, financial, and marketing plans.
- Learn about any local, state, or federal regulations.
- Start small to mitigate financial risk.
- Give it time for your business to grow.
We’ll dive into these later, but for now, there are a few questions you need to answer to make sure you’re headed in the right direction and for the right reasons.
Why Do I Want to Start a Business in Retirement?
You’re finally at the point where you don’t have to work anymore, so why would you want to work another day? Because it could be beneficial for your physical and mental health. According to the Institute of Economic Affairs, you’re 40% more likely to face clinical depression after you retire. You’re also 60% more likely to be diagnosed with at least one physical condition. There’s just something about having a job that keeps your mind and emotions sharp and engaged.
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Here are a few more reasons to become an entrepreneur later in life:
- You have the time. Think about how busy you were when the kids were younger. You felt more like a chauffeur, tutor and coach than a parent or spouse. Or think back to when you were first starting your career. Long hours at the office. Working overtime to prove yourself. Your time belonged to other people. In retirement, though, you have time to give to a new business.
- You’re not responsible for anyone else’s financial security. Becoming an entrepreneur may have been too uncertain and scary when you were younger. Maybe you had to provide for your family and that business idea got shuffled to the back of your mind. Now that you’re not responsible for anyone except yourself (and possibly a spouse), you can take the leap into the land of owning your own business.
- You can work flexible hours. As an entrepreneur, you decide when you work. And that’s great if you plan to travel or want to spend time with loved ones.
- You can make money. Who doesn’t love a little extra spending money? With a second career, you can choose to do something you love and get paid to do it! It’s a win-win.
- You get social interaction. One of the hardest adjustments to life in retirement is not seeing coworkers and colleagues every day. Let’s face it—if you worked in an office environment, you spent a lot of time with those people. They may have become dear friends. Retiring changes those relationships. Having your own business could allow you to enjoy some much-needed interaction with others.
Keep in mind that you don’t have to work 40–50 hours a week in a new business venture. In fact, if you try it out and hate it, you can always quit! You can even pursue something else. The idea is to do something you like to keep you active and engaged, not overworked or discontent.
What Kind of Business Should I Start?
One of the best perks about starting a business in retirement is that you get to choose what you do. You may have spent years in a job that paid well but didn’t tap into your interests and skills. Starting your own business is different. You get to build it around something you love doing.
The question to ask is: What interests you enough to spend time and money on it? The options are not limited to selling jewelry or woodworking (although you may love those activities). Opportunities are out there, waiting for you to act on them. Here are a few ideas:
- Consulting and coaching
- Errand running
- Selling online
- Pet sitting
- Giving tours
- Planning events
Notice that most of these services require little money to get started. You don’t have to buy a lot of supplies or pay for a big office. This is key. Don’t rob your retirement fund to start your business. Just like you budgeted for retirement, set a budget for starting your business.
And remember: You don’t have to make this new business venture a second full-time career unless you want to. You can work as little or as much as you want, especially if you’ve built a solid retirement fund.
What Steps Should I Take to Start a Business in Retirement?
Even though you get to choose your encore career, you still need to be smart in getting that business up and running. You can’t just wave a magic wand and make your idea successful. Here are some key steps to take in owning your own business.
- Consider the start-up costs. Again, don’t use your retirement fund to start a new business. If it were to fail, you’d have no nest egg. If you know you want to own your own business later in life, and you know it’ll have upfront costs, start a savings fund and put money away in it. That way you can do what you want without jeopardizing your future.
- Research the viability of your business or service. You may think an idea is great, but other people will be able to tell you if it would work. You may be unaware of trends in a certain industry. Or you may overestimate the market. Having others weigh in will help keep you out of trouble.
- Create business, financial, and marketing plans. How much money do you have to spend? What can you do within that budget? How are you going to get the word out? These are all questions you need to be thinking about—and answering.
- Learn about any local, state, or federal regulations. Depending on where you live, you may be required to jump through certain hoops to stay in compliance with the law. Contact the department of revenue in your state for more information.
- Start small to mitigate financial risk. Sam Walton started with one Walmart. Henry Ford designed one car, not four different models. They both understood the adage “Don’t bite off more than you can chew.” Always cash-flow expenses and never take on any debt. If you can’t afford something, save up for it until you can pay cash.
- Give it time for your business to grow. Don’t get discouraged if you face obstacles. And don’t give up if your idea doesn’t take off immediately. Ford’s “horseless carriage” was considered a luxury that would never replace the bicycle. But a century later, we’re all glad Ford gave it time. The same may be true of your business idea.
When starting out, don’t be afraid to ask for help or advice in making the most of your business venture. Talk to a former colleague, a family member, or even a business leader you admire. Not only will you learn more about becoming a successful entrepreneur, but you’ll also discover how many people want to support your new career!
Need more information? Check out Christy Wright’s best-selling new book, Business Boutique: A Woman’s Guide for Making Money Doing What She Loves. This book will help you get your business idea off the ground or take your existing business to the next level.