The baby boomer generation is redefining retirement. While their parents may have looked forward to golf in their golden years, many people heading toward retirement today are thinking about work instead.
Some of that focus on punching the clock is necessity, and some is desire. Most baby boomers don't have a pension, many have not saved enough for retirement and few can live on what they expect to collect in Social Security. But many also enjoy work and want to continue to use their skills.
"They've been forced to re-examine this whole concept of retirement," says Jeff Williams, who owns Bizstarters.com, which provides training and consulting to entrepreneurs.
The desire to work on their own terms, and perhaps use that work to make a difference in the world, has led to an explosion of entrepreneurship among older Americans. People age 55 to 64 accounted for 25.8 percent of the businesses started in the last year, according to the Ewing Marion Kauffman Foundation's 2015 Kauffman Index: Startup Activity. A 2014 survey by Encore.org, which helps older Americans find ways to use their skills for the greater good, found that 39 percent of the respondents were interested in starting a business or a nonprofit organization.
"It's an opportunity to maybe do something that you've really wanted to do for a long time," says Nancy Collamer, author of "Second-Act Careers." Many retirees want to work on their own terms, follow their passions and set their own schedules. And, of course, many older people have been forced out of their jobs sooner than they had planned.
While it can be fairly easy to start a business, particularly one that requires no office space or retail location, it isn't for everyone. To make it work, you need to have the right idea at the right time, plus the skill to get your product in front of buyers.
"You need to really think about why you're doing it," Collamer says. "Most boomers pursue entrepreneurship for lifestyle reasons. ... At the end of the day, it is a business, and you need to be solving some problem in the marketplace."
Some may discover that pursuing their passion doesn't fit into the traditional for-profit model. For those people, starting or joining a nonprofit, or using their talents either as a volunteer and paid contributor in the nonprofit world may be a better fit.
"There's a huge amount of consulting that happens in the nonprofit sector," says Marci Alboher, author of "The Encore Career Handbook" and vice president of Encore.org. You could use your talents in retirement to start a consulting business that serves nonprofits or consult as a volunteer.
"You can start a business that has both a revenue-generating value as well as a social value," Alboher says. Launching a business that doesn't require a brick-and-mortar location can often cost less than $10,000. But your work doesn't end there. Building that business into an enterprise that returns a significant profit takes time and skill. Experts see opportunities in consulting, services that cater to baby boomers and older people, caretaking and businesses that provide services to other small businesses.
"It takes a while until you lay the groundwork, you get your customers and you hit your groove," Collamer says.
Here are 11 tips for starting your own business in or near retirement:
Determine whether your idea is really a good business plan. What problem does it solve? "Be very honest with yourself in the business idea you come up with," Williams says. If your passion doesn't translate into a viable business, maybe you're better off pursuing it as a hobby or volunteer. "Don't worry about finding the next hot business idea," Collamer says. "Just take a look around you and see where's the need."
Evaluate your skills. Do you have an ability to do all the tasks necessary to make your business a success? "Make sure you're really good at it," Williams says. "You have to have the passion, but you have to have the capability, too."
Consider the time involved. Most people don't want to work 80 hours a week, or even 40 hours a week, once they've reached retirement. "It's important to figure out a way to do it in a way that's not all-consuming," Collamer says. She advises people to stay away from starting brick-and-mortar businesses that require your constant presence, such as restaurants and stores.
Get good advice. Most cities have lots of free and low-cost resources to help beginning entrepreneurs. Some also provide good networking opportunities. You should also look for conferences and trade associations in your field.
Figure out how to finance your startup. Many businesses, especially those with no physical location, can be started for a minimal investment. If you need six figures to get your dream business off the ground, you may need funding or investors, which create additional layers of complication. Don't invest money you can't afford to lose.
Know if you want to manage others or can handle the isolation of working alone. Many people who start businesses in retirement don't want the burden of managing employees. On the other hand, if you're running a one-person business, you'll end up spending a lot of time by yourself, and not everyone likes that either. Decide which setup is the best fit for you before getting too far in the process.
Have an exit strategy. If you start a business when you're 65, you may be ready to stop running it when you're 75. Have a plan, whether it is to leave the business to your children, sell it or just shut it down. You should consider writing down your plan and even sharing it with your spouse and children.
Use your professional connections. People who have been in the workforce for a long time know a lot of people. That gives you immediate access to potential customers as well as consultants who can help you get your business off the ground.
Embrace technology. If you're going to run a business, you may need to learn social media, online commerce, website management and other technical skills. "Many of these things are just plug and play," Collamer says. "It really enables you on a shoestring budget to have the look of a high-end business."
Protect your assets. Make sure your business structure protects your assets. The best way to do that will vary by state and by the size of the business. If your business goes down the tubes, you don't want to lose your savings as well.
Don't expect overnight success. You may need to try several things and radically change your initial business plan before you find a formula that works. "Understand that this whole journey to an encore career is not going to be a linear thing," Alboher says. "Let yourself take some rides and try stuff."
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