Congratulations! You have reached your 65th year and are now eligible for retirement. Or maybe you are 50 years old who opted for early retirement. Do you shout for joy that your days as part of the labor force are officially over? Or do you ask yourself, “What do I do now?”
For many seniors, sitting in the sun in Florida or a hammock in Hawaii is not part of their lives. While the world is aging and the number of elderly people is increasing, the present crop of older people is in better health, lead longer and active lives than their parents. They want action! Retirement is just too dreary to think, and many remain emotionally unprepared to throw their working life to the wind. Some can also make use of the income they can still earn working.
In lieu of retirement, many seniors are turning to entrepreneurship. With their immensely valuable business skills acquired through years of experience, many retirees are seriously considering launching their own business.
But hold your horses … are you really prepared to start your business?
Advantages of Starting a Business in Retirement
Many seniors believe that they still have what it takes and are highly motivated to reach the top of their profession and succeed on their own. However, a 25 year old starting a business will face different sets of challenges from a 50 or 60 year old venturing on their own commercial enterprise. It is not the same, and here are the advantages of starting a business at a relatively older age:
1. Prosperous and affluent
Retirement and old age often means that their children are all grown up and through college. Their mortgage may have been paid off, and they may have substantial financial resources from their savings and investment to support them in their old age. Economists are saying that the present crop of the retiring baby boomers are economically secure and enjoy higher income than past generations. If you are one of the lucky ones, then starting a business may be the best road for you.
2. Minimal financial risks
Older people are not as impatient or impetuous as the younger generation. With ample time on their hands, seniors can take as much time as needed to properly develop their business concept, analyze market opportunities, develop their products, test a new service, and prepare a high-quality business plan. They can even bring into their venture business contacts they have made in the past to provide them with complementary expertise they need. As a result, they can minimize their financial risks.
3. Wealth of experience
For many seniors with entrepreneurial fervor, it makes sense to start a new business in an area related in some way with your previous job. If you were in the military, maybe you can look for ventures as a supplier of military equipment. Or if you worked as the marketing man of your company, you can write e-books on the topic or lecture at conventions. By doing so, you are able to take maximum advantage of knowledge and experience that took years to acquire. Plus, you can harness the industry contacts, associates and friends you have made through the years.
Disadvantages of Starting a Business in Retirement
However, starting a business at a late age has its drawbacks.
1. Your Health
Health is an important issue that you need to consider if you want to forego the sedentary life of retirement. Entrepreneurship is a rigorous activity, not only physically but mentally as well. Make sure that your health can cope up with the demands and challenges of starting and running a business.
2. Physical readiness
Even though you may be in good health, starting a business can be a very demanding activity. A start-up needs careful nurturing that may require you to work long hours. Moreover, you will be subjected to a lot of pressures as you lead your business to every level of profitability and growth. Are you up to the physical demands of running a business?
3. The capacity for risks
Are you prepared to gamble? Starting a business means taking risks. Risk may sometimes mean losing money and burning yourself in the process. Many seniors starting a business have neither the financial security of an annuity nor access to personal financial resources in the six-figure range that can sustain them for the rest of their lives. With the little money you have, are you prepared to risk it in a business venture with uncertain financial outcome? Unlike a 25-year old who fails, a 60-year-old person will have few opportunities to get gainful employment and start saving for their retirement nest egg. Retirement is already staring at your face. If you do not have investments to fall back on even if you fail, then you had better think twice about starting your own business. Or at least, use only a small part of your nest egg. Putting your entire old-age savings for a business is too great a risk.
4. Capacity and willingness to learn new things
As an entrepreneur, you must be able to quickly grasp and understand new ways of doing things. Technology is changing the way business is done. You may not want to learn the new technology, but you need to understand how it can improve your business operations. You also need to learn how to deal with younger people – who will be, in most likelihood, the people you will be negotiating and cutting deals with.
Many people are starting their own businesses at a late age – and still succeed. Barbara Miller (read her story) opened her own paper distribution company at age 62, and she has been able to transform it into a multi-million dollar company in less than five years. She is now 67, yet she is still working as hard as before. If you think this is the path for you, be sure to understand what you are getting into.
- Book: The Last Chance Millionaire
- Business Ideas Targeting Seniors and the Older Population
- Tips on Lowering Your Health Care Costs
- Retirement Plans as a Source of Business Capital
- Self-Employed 401K: Retirement and Tax Savings Tool for Small Businesses