It might catch you off guard to learn that a surprising number of retirees are spending their retirements, well, working. Yes, you read that right. While many older Americans are still choosing to live out their retirements golfing or fishing, spending time with their grandchildren, and generally taking it easy and soaking up their golden years, a significant number of retirees are using this time to start their own businesses.
According to a recent survey, nearly 51% of small businesses are owned by people age 55 and older. While it’s easy to assume that entrepreneurs in this age bracket were forced into this position for financial reasons — the Great Recession, layoffs brought on by the COVID-19 pandemic, the lack of a pension, etc. — the majority of older entrepreneurs report that they are in fact running their own businesses by choice.
While starting a business at any age means overcoming obstacles, starting one during your second act has the potential to be especially challenging. We’re breaking down some tips for senior entrepreneurs as they evaluate the prospect of starting a business in retirement.
Determine your “why”
Why do you want to start a business? Do you have a special skill you want to share? Have you always dreamed of building a business from the ground up? Is there a gap in the market that you can fill? While there is no wrong answer, it’s important to seriously think through why you want to start your business.
Time is money
Are you prepared to dedicate the majority of your time to your business? To many retirees, the thought of reverting to a 40 hour+ work week hardly sounds appealing. Starting a business is a huge time commitment, so be sure you’re fully devoted before diving in headfirst.
Evaluate your skills
Unfortunately, passion does not necessarily translate to skill. Before you open your own business, make sure it’s something that you’re both passionate about and good at.
Look at your finances
While starting a business certainly doesn’t have to cost you hundreds of thousands of dollars, if you require a brick-and-mortar location, things have the potential to get pricey. If you need additional funding to get your business up and running, be sure to have a plan in place. While taking out a loan or working with an investor isn’t necessarily the wrong move, it’s critical to understand your businesses overall financial picture, as well as the financial implications if the business were to fail.
Let’s face it: technology is a key aspect of running a business these days. Whether you’re utilizing social media to market your services or using an E-commerce platform to sell your products, get comfortable with the idea that you may need to learn some new technology skills.
Confer with your financial advisor
A second opinion never hurt anyone. If you’re considering taking on the financial responsibility of a new business, consult with your financial advisor first. A professional will be able to talk you through some of the financial considerations that might otherwise be overlooked.
Are you dreaming of opening a corner bakery and selling your beloved pecan rolls? Have you been thinking about starting a daycare center for neighborhood children? Let us help you make your dream a reality. At The Humphreys Group, we believe that effective planning is as much about possibility as it is about responsibility. You bring the ideas, and we’ll bring the financial expertise. Reach out to our team today to schedule a meeting.