Making Retirement Pay
Congratulations! You’ve finally retired and moved to the desert, beach, mountains, city or some other dream retirement location. Fortunately, you’ve saved up enough to buy a great retirement home.
However, you still need — or want — to make money. But you certainly don’t want another job; you’ve had enough bosses for a lifetime. So, start your own business!
But, the First Rule of Retirement Business is: Don’t make too large and risky of a financial investment — unless you have a lot of money or you’ve run companies before.
I’m always wary of first-time entrepreneurs, of any age, starting businesses requiring large upfront investments — retail stores, restaurants, bed-and-breakfasts. It takes awhile to see whether you like — and can handle — the obligations and headaches of running a business.
Unlike young entrepreneurs, you don’t have the time to rebuild your nest egg. But you do have time to work your way up to a larger company, if you later decide business ownership is right for you.
So I suggest all first-time business owners start with businesses requiring little capital, such as:
Consulting. Especially if you have professional or technical knowledge, consulting is the least expensive and least risky way to begin. All you need is a business card and a place in your home to work.
Service businesses. With lower upfront costs, service businesses ease you into an industry and help build up a customer base. Instead of opening a restaurant, start as a personal chef or caterer. Rather than plunging into real estate speculation, begin with property management services.
Sales. If you’re outgoing, becoming an independent salesperson is an extremely low-cost way to launch a career.
Do what you’re doing now, only now work for yourself. You already have the knowledge of the industry, so start with what you know. If you’ve been an attorney working in a large law firm or big corporation, now’s the time to hang your shingle.
The Second Rule: Before you decide on a retirement business, be clear about your financial needs.
Do you need money to be able to pay your basic bills? If so, as you evaluate options, place the highest priority on the potential for steady, reliable income. You’re most likely to be able to do this with options closely aligned to the work you did before you retired. See if you can outsource your services to the types of companies you would have worked for as an employee.
The Third Rule: Lifestyle considerations matter! If your retirement business income primarily supplements your other financial resources (such as a pension and/or investments), make sure your business choice meets your personal needs.
Consider:
A flexible vacation schedule. You want to be able to pick up and go — to see the new grandchild, tour Australia or follow your team to the World Series. Make sure you’re not working 50 weeks a year.
Close to home. Who wants a long commute at this point in your life?
Appropriate daily work schedule. Do you want to work 9-to-5, five days a week to get out of the house or do you want to be able to golf three days a week? Make sure you have time for yourself. After all, it’s your retirement!
Appropriate physical demands. You may have always dreamed of opening a restaurant, but do you really want to be on your feet 10 hours a day?
Hobby business. If you don’t have to make a lot of money, retirement’s the perfect time to turn your hobby into a business.
Whatever business you start, you’re going to have to do marketing. A new business gives you a reason and a focus to join community groups.
You’re not a joiner, you say? Well, retirement is a new phase of life. So get out there, and try something new!
Rhonda Abrams is the author of “Six-Week Start-Up” and “What Business Should I Start?”
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