Baby boomers are changing the meaning of retirement. According to the Kauffman Foundation, the average age of new entrepreneurs is increasing — in 1996, 14.8 percent of new entrepreneurs were aged between 55 and 64, but in 2015 that figure had increased to 25 percent. This makes a lot of sense — retirees have a lifetime of experience, skills and connection to draw upon — all key qualities for a new business owner. Entrepreneurship can be a challenge, so here are a few questions to help you learn if this is for you.
Are You Up for the Challenge?
Among the personality traits of a business owner are passion, tenacity, resourcefulness, open-mindedness and a sponge-like nature to learn new things. Starting a successful business is different from a standard 9-5. Most businesses require a lot of time, and there will be difficulties — these traits are what will pull you through. Do you possess them?
Are You Fully Informed?
Don’t dive into this blindly – put that sponge-like nature to the test and get educated! Seek out people in the same line of work and find out how much time, effort and capital they needed. Look for sources of support including the Small Business Administration as a great start, and there may be local meet-up groups or training courses you can attend at low or no cost. Try to build a “master mind” — a group of advisors and mentors you can contact for support and advice. Above all, if your business has any significant capital costs, make sure you do your market research and you know there’s a market for what you’re selling.
Is a Low-Risk, Bootstrapped Business a Better Option?
As a retiree, you have a massive advantage over the young folk — a stable source of income that requires none of your time. This is ideal for low-risk businesses with low upfront capital costs. You don’t have to worry about making enough to pay the bills, and you’re free to reinvest all your profit back into the business. For example, imagine that you make handmade craft goods. Instead of renting a brick-and-mortar store, you could sell through your own website or sites such as Etsy, or eBay. This costs very little to set up, and if you start to make money, you can think about expansion — maybe through hiring someone to help create the products, or getting a stall at a local market.
Can You Protect Your Assets?
The last thing you want is to be personally liable for costs incurred by your business, which could eat into your retirement funds and jeopardize your income. Make sure you structure your business in such a way as to protect your personal assets. Usually, you do this by setting up a corporation. There are different types of corporations (as well as other asset-protection strategies), and the exact type of company you can form depends on your location. This Investopedia article features an overview of your options, and if you’re unsure what to do, leave it to the professionals and seek legal advice.
Can You Embrace Technology?
A survey by Bright Local found that 61 percent of people are more likely to contact a local business if they have a mobile site. This is the digital age, and today the vast majority of businesses need an online presence to thrive. This applies even if you don’t actually use the Internet to sell your products. If you’re a life coach, a hairdresser, or you run a cafe, people will still find you through their phones and their computers. You don’t have to be a tech genius to start a website or get set up on social media – a lot of services are very plug-and-play. However, you do need to be willing to embrace technology and keep up with the changing online landscape.
Do You Have an Exit Strategy?
You might have the passion, drive and commitment to start a restaurant at the age of 65, but will that drive still be there at 75? Or, 85? Maybe you plan to keep working indefinitely, but if not, you need an exit strategy, especially if you have business assets that you will need to deal with. Will you pass on the business to a family member? Or, will you liquidate and sell off the assets? Circumstances can change quickly, so it’s prudent to plan ahead.
Many of today’s retirees feel a huge void after the end of their working life, and they look for something engaging to fill that gap. Starting a business is an exciting, challenging and rewarding way to do that. Just think your business idea though carefully, and don’t jump in without a plan and you’ll have great odds of success. Good luck!
This article is brought to you by BootUP Ventures: The Global Entrepreneurial Ecosystem. BootUP specializes in providing your startup with everything it might need from funding, to mentorship to office space and much more. For more information contact us at firstname.lastname@example.org.