Retirement represents the end of one phase in life, and it also provides an opportunity to pursue many dreams you deferred. Many people want to start a small business but don't have the time or freedom to pursue this avenue while in the workforce. Once you are free from the daily grind, you have the time to create your dream business.
That doesn't mean the process will be easy. Starting a business carries many risks, and you can quickly run through your retirement savings if you rush into small business life.
Start by Avoiding Risks
You have to be careful when you start a business in retirement, but that shouldn't stop you from pursuing your entrepreneurial dreams. There are, however, a few risks you can avoid before you begin your journey as a business owner.
It's critical to keep your retirement and business goals in line with your actual capabilities and expectations, according to Next Avenue, a network dedicated to people over the age of 50. Starting a business can be all-consuming, and that may not align with your desire to settle down after years in the workforce. Similarly, you will find your stamina decreasing with age. While you used to spend many late nights at the office, that endurance might not last into retirement.
Keep these details in mind, and create a business plan that accommodates your current situation. That could mean that you work hours equivalent to a part-time job and scale back your business ambitions. Remember, you are starting this business for personal enjoyment and to make a bit of extra money. Don't let it dominate your life.
What Type of Business?
You'll want to create a business that offers flexibility and freedom. Any endeavor that requires you to secure retail space or a separate office may be more than you want to take on, so look at businesses that you can operate from home.
These types of businesses include property management, IT support and online sales, according to Consumer Affairs. These jobs allow you to set your own hours and are easy to operate from the comfort of a home office.
To pick a business plan that works, evaluate your existing skills. It's not crazy to start a business in retirement, but it may be problematic if you pick an industry well outside your comfort zone, according to U.S. News and World Report. Look at what you've done in the past, and consider how you can apply your skill set to a business that fits into your new lifestyle.
Think About Funding
You must ensure that your retirement start-up doesn't eat into your retirement savings. If your new business succeeds, it may offer helpful supplementary income for your golden years, but it is impossible to know how a business will perform. With that in mind, you should look to outside financing that can support your business and take the financial burden off your existing savings, according to USA Today.
"The general rule is: You shouldn't invest more than you can afford to lose. That can be a really tough reality for people," said Nancy Collamer, a writer who offers advice to retired entrepreneurs.
Above all, business growth will not happen overnight. Maintain your goals and you'll eventually reap the rewards.