12 Tips for Starting a Business in Retirement
For most people, the dream of retirement is to no longer work. However, for some, it’s more about working on their own terms. If you’re someone who likes to have your hands busy with something, starting a business in retirement could be the perfect option for your lifestyle.
Wait — Why Would You Work During Retirement?
Retirement is typically when a person stops working and is no longer employed. It is often seen as a time of transition when a person moves from the working world to a more leisurely lifestyle.
However, retirement isn’t a “full stop.” Instead, it’s a gradual slowing down to the point that you’re able to focus on the things you’re passionate about. For some people, this means stopping working altogether and traveling the world or relaxing at home instead. For others, it’s about volunteering or giving back to their community. And for others still, retirement creates enough margin to pursue another business passion that wasn’t practical during their working years.
There are a variety of reasons you might consider starting a business in retirement, including the following:
To remain active and engaged.
Starting a business can be a great way to stay mentally and physically active in retirement. It’s been shown that people with activities and responsibilities to occupy their time, bodies, and minds live longer than those who remain idle.
To supplement retirement income.
A successful business can provide a source of additional income in retirement. If you need additional income outside of your retirement accounts and Social Security, having a revenue-generating business can allow you to live a lifestyle that matches your needs and desires. In some cases, your business might even make up the bulk of your income in retirement.
To pursue a passion.
Many people have a hobby or interest that they are passionate about. Starting a business based on that passion can be a fulfilling way to spend your retirement years. For example, you might be passionate about youth baseball. Starting a baseball training clinic could be an excellent way to spend time doing what you love (while making some extra money).
To leave a legacy.
It’s not always about money. Starting a business can be a way to leave a legacy and positively impact the world. It might also be an opportunity for you to create something you can then pass along to an adult child or grandchild. That way, they will have a strong financial footing in the future.
To stay connected.
Many people lose their social connectedness when they retire. A business can provide an opportunity to stay connected with others and be a part of a community.
Having said all this, owning a business in retirement isn’t suitable for every person or situation. It comes with stress, responsibilities, concerns, and struggles. If these aren’t things you’re willing to embrace, you might be better off doing something else during your golden years.
12 Tips for Starting a Retirement Business
In some ways, starting a business in retirement is no different from starting a business during your career. However, there are some nuances and concerns to note. For example, you can’t be as risky when launching a retirement business. You also have a much shorter time horizon to profitability, so you must be very proactive.
With all of that being said, here are some useful suggestions and tips for getting a new business started (and scaled) during your retirement years:
1. Start Small and Make Steady Progress
Consider starting a small, home-based business or consulting firm that can be run on a part-time basis. This will allow you to test the waters and see if running a business is a good fit for you before committing to a full-time venture.
The great thing about starting a small online business from home is that you don’t need to incur many overhead expenses. If the business shows promise, you can invest more heavily. If it doesn’t end up feeling like a good fit, scrap the idea and try something else.
2. Build on Your Existing Strengths
Think about your skills and experiences and how they can be leveraged in a business. Look for opportunities to turn your hobbies or passions into a business. Whether you enjoy woodworking, knitting, cooking, coaching youth sports, doing electrical work, painting, collecting sports cards, or hunting, there are always opportunities to build a business.
3. Get Help
Don’t be afraid to seek out assistance and advice from others. This might include hiring a mentor or consulting with a small business expert. You might be the “senior” in terms of age, but there are plenty of other people who are in the thick of their careers who can offer assistance as you launch a new venture.
4. Be a Thoughtful Planner
Carefully consider the financial aspects of starting a business, including any potential risks and rewards. Create a comprehensive business plan, and be sure to have a solid financial foundation in place before launching your business.
5. Get Yourself “Out” of the Business
Think about how you can make the business run as smoothly and hands-off as possible. After all, you’re technically “retired.” Your days of working 40 to 60 hours per week are (hopefully) done. You’re more than likely looking for a business that you can work on without working in.
Here are some ways to take yourself out of the business so that you’re able to enjoy retirement and business ownership:
Outsource and delegate. Find other people who can perform tasks within your business and hand it off. As sobering as it is to realize, you are almost always replaceable. (And that’s good news!) Work on replacing yourself as many times as you possibly can.
Develop tons of marketing on-ramps. The more marketing, advertising, and lead generation “on-ramps” you have pointing to your business, the less you have to be involved in sales. Simple things like sending out a print catalog or setting up automated webinars that play around the clock can give you time back without compromising sales.
Streamline everything. As soon as an efficient process is created, develop a Standard Operating Procedure. That way, tasks can be performed the same way every time in the future. (This also makes your job of outsourcing and delegating that much easier.)
6. Network Like It’s Your Job
Building a network of contacts and connections can be beneficial for any business, and this is especially true in retirement. Join industry groups and attend events to meet potential customers and partners. Be the person to start conversations at the supermarket or gym. The more you rub elbows and talk about your business, the more opportunities will emerge.
7. Be Flexible, Yet Organized
As a retiree, you may have more free time than you did when you were working full-time. However, it’s important to be flexible and adapt to the demands of running a business. Good organization is also a key success-driver. Consider using tools like task lists, CRMs, calendars, and email responders to help you stay on track and manage your time effectively.
8. Don’t be Afraid to Ask for Emotional Support
Starting a business can be challenging, and it’s a good idea to have an intentional support system in place. When you get stressed or overwhelmed, don’t be afraid to ask for reassurance from friends, family, or mentors.
9. Make Time for Retirement
Starting a business can be rewarding, but it can also be stressful. Make sure to take care of yourself by getting enough rest, exercising, and finding ways to relax and unwind. Do your best to work less than half the week.
10. Be Extremely Patient
Building a successful business takes time, and it’s important to be patient and stay focused on your goals. Don’t get discouraged if you don’t see immediate results — success often takes time and effort.
11. Stay Motivated
Starting a business can be a rewarding experience, but it can also be challenging at times. It’s important to stay motivated and keep a positive attitude, even when faced with setbacks or challenges.
12. Stay Above Board and Enjoy the Ride
Make sure to follow all relevant laws and regulations when starting a business. This might include obtaining necessary licenses and permits and following industry-specific regulations. Remember to enjoy the process of starting a business. While it’s important to be serious and professional, it’s also important to have fun and find fulfillment in what you are doing.
Viable Business Ideas for Retired People
Every person is unique, but here are several ideas/categories of business ideas that often make sense for people who are in retirement:
Consultant.
Do you have a particular area of expertise? You may be able to start a consulting business. This could involve providing advice and guidance to businesses or individuals in your previous field.
Tutor or teacher.
If you have a background in education, you might consider starting a tutoring or teaching business. This could involve working with students one-on-one or leading small group classes.
Home-based business.
Almost any business can be run from home these days, including an online store (e-commerce), a crafting business, or a service business like dog-walking or home organization.
Freelancer.
If you have a particular skill, such as writing, photography, copywriting, or graphic design, you might consider starting a freelancing business. This can be a flexible way to use your skills and earn income on a project-by-project basis.
Non-profit.
Are you passionate about a particular cause? You might think about starting a non-profit organization. This can be a fulfilling way to make a difference in the world and give back to your community.
This is not an exhaustive list. Chances are, if you’re reading this article, you already have a pretty decent idea of the type of business you want to start. As cliche as it might sound, follow your passion.
How to Maximize Your Retirement Business
It’s not enough to start a business in retirement. You need to be smart about how you manage the revenue that’s generated. More specifically, think about what you’re doing with that money once it leaves the business account and hits your own personal bank account.
Here are some recommendations:
Make a budget. It’s important to have a good understanding of your income and expenses in retirement. Make a budget and track your spending to ensure that you’re living within your means.
Be intentional with spending. In retirement, you may have more flexibility in terms of how you allocate your money. Consider prioritizing your expenses and identifying areas where you can cut back or save money.
Be strategic with your investments. Consider working with a financial adviser to help you make informed decisions about your investments. This might include diversifying your portfolio and balancing your risk tolerance with your long-term financial goals.
Continue to save. Even in retirement, it’s important to continue saving for the future. Consider setting aside money in a retirement account or emergency fund to ensure that you have financial security. A cash savings account of three to six months’ worth of expenses is considered the bare minimum.
Plan for the unexpected. It’s important to prepare for the unexpected, such as unexpected healthcare costs or other unforeseen expenses. Consider purchasing insurance or setting aside money in an emergency fund to help protect against unexpected expenses.
Adding It All Up
Starting a business in retirement is usually an optional choice. (If you absolutely, positively need the money, then you probably need to “unretire” and find a reliable source of income to hold you over.) For most people, it’s just as much about staying busy, engaged, and connected as it is about making money. But whatever the case may be, it’s an exciting process that can bring a lot of enjoyment.
As you think about starting your own business, carefully consider the entire “landscape.” It may be worth conducting what entrepreneurs call a SWOT Analysis. This involves calculating the strengths, weaknesses, opportunities, and threats of starting the business. Once weighed and contrasted, you can make a more intelligent decision on how to proceed.
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