For more and more retirees, retirement signals not the end of a career, but rather the beginning of a new phase—entrepreneurship. Many baby boomers view retirement as an opportunity to start a new chapter in life, and hope to use their hard-earned skills and knowledge to create their own independent businesses.
With increased longevity, retirement often comprises 25%–30% of a person’s life. According to the 2016 Retirement Confidence Survey conducted by the Employee Benefit Research Institute (EBRI), 67% of the workers surveyed planned to work in retirement. Certainly, financial reasons, such as paying bills and keeping health insurance or other benefits, are primary considerations in the decision , but retirees who work most often say they do so because they want to stay active and involved (82%) or enjoy working (80%).
Regardless of personal motivation, there are many advantages that those age 50 and older possess when starting their own business ventures. By retirement, mortgages have often been paid and children have graduated from college. With fewer financial obligations—and perhaps a cushion from a lifetime of saving—the retiree may have the opportunity to take his or her time in developing a strong business plan and concept. Retirees also have the ability to utilize the many business contacts and skills garnered over their working years to further product development, marketing, and sales. This can prove extremely useful for those who wish to use their experiences in a particular field to strike out on their own.
Many retirees find the opportunities of their dreams during their golden years. For example, prior to retirement, Bill and Helen (a hypothetical case) had thriving careers in accounting and travel services, respectively. After retiring, Bill and Helen quickly discovered they were not content to stay at home and felt that combining their skills would serve them well in their own business endeavor. Drawing upon Helen’s years of customer service and Bill’s bookkeeping finesse, the couple opened a bed and breakfast, which has allowed them to use their pre-existing expertise in a new and challenging way. If you want to use your years of wisdom to build your own company, here are some questions to consider:
- Are you personally motivated? Building a business requires intense dedication. You will need to develop your own ideas, set your own schedule, and manage a variety of responsibilities.
- Are you a “people” person? Running your own business will likely involve a great deal of interaction with various professionals and personality types. If you can harness the people skills you gained from four decades in the working world, you will be better prepared to handle difficult clients or professionals.
- Do you have the ability to think quickly? Representing your own company can mean that you will have to provide answers and decisions at a fast pace, and sometimes under pressure.
- Do you have passion and stamina? It is often said that you must love what you do. Realize at the start of the enterprise that a good deal of time and effort may be required, but also know that the rewards can make your labors worthwhile.
- Are you organized? Thorough organization and planning can lead to continued business success. Finances, invoices, and schedules are just a few of the tasks at which you must be or become proficient. According to the Small Business Administration (SBA), poor planning is responsible for a majority of failed business attempts.
- Is your motivation level high? A business requires a lot of work, and it can be physically and emotionally stressful. Those who are highly motivated often do well under stress because their “hunger” drives them forward.
- Will your family be supportive? A new business can consume a lot of your time, mental energy, and sometimes, capital. Make sure to tell your family what they can realistically expect the experience to be like, and gain their support and trust.
There are many advantages to self-employment. The chance to be your own boss, experience the payoff of your own hard work, and harness the limitless financial and growth potential, all combine to make entrepreneurship an exciting and educational adventure. Interestingly, a lack of experience often accounts for many small business failures. Therefore, a lifetime of knowledge can put you far ahead of the game before it even begins, and many of today’s retirees welcome the challenge.