Things to consider before you leap
Starting a Business in Retirement
by Susan Williams, founder of Booming Encore
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If you're thinking about starting a business in retirement, you're not alone. According to the Kaufmann Foundation, the percentage of entrepreneurs ages 55 to 64 has risen steadily from 14.8 percent in 1996 to 26.6 percent in 2014.
There may be many different reasons why you might want to start a business in retirement. To generate an income, to remain socially connected, to have flexible working hours or to turn a hobby or passion into an income stream are just some of the possible motives.
But along with the excitement of starting a new business, there are some things that you should probably consider before you take the leap.
There are start-up costs to starting a business.
Are you prepared to put some money into starting your business? Registering your business, marketing your business, and promoting your business are just some of the potential start-up costs.
Where will this money come from?
When you're retired, you need to carefully consider how you will fund your new business without putting your retirement nest egg at risk.
It takes time to start a business.
What can even be a more intensive investment in a new business is your time. To successfully launch a business, you need to not only offer a great product or service but also market and manage your business. Is this how you really want to spend your time in retirement?
If you're planning on turning a hobby into a business, it can be a very different thing.
When you have a hobby, you are doing it for your own pleasure and enjoyment. You are able to do it when you want, where you want, and for how long you want. There are no imposed deadlines or demands of you or your talents.
When you are running a business however you're now doing your hobby for someone else and they may be demanding. You may have deadlines to meet and possibly complaints to deal with. So the hobby that you initially loved could potentially become "a job."
Your new business may impact others.
Running a business will likely take your time and energy. Now that you're retired, did the people close to you possibly have different ideas of what they wanted to do with you rather than see you start a business? Do you have their support?
You should probably discuss your business idea with them. Let them know what's involved and how this may or may not affect them before launching your business.
Running your own business is very different from working for someone else.
Yes, when you run your own business, you are the boss and get to make all the decisions. And yes, you get to also make all the mistakes. Being an entrepreneur is very different than being an employee and you need to be sure you are really ready for this.
Small businesses fail.
Unfortunately, many small businesses fail. According to the Small Business Administration, only 50% of new companies will survive five years. Is there really a demand for your product or service? Do you have the right skills and competencies to successfully run your own business? Before jumping in, just make sure that you're prepared.
These are just some of the challenges you may face in starting your own business in retirement, but there are also lots of benefits too. Make sure you have an appreciation and understanding of them both before deciding to take the leap.
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Susan Williams is the Founder of Booming Encore, a website and social media network dedicated to providing information and inspiration to help Baby Boomers create and live their very best encore.
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