Not everyone is working toward retirement with the hope that they’ll be able to live out the rest of their days on a permanent vacation. In the last few years, 65 has become a much “younger” age. This is in the sense that, thankfully, people are reaching this age much healthier. Therefore, many of them don’t want to sit at home and do nothing. This is when starting a business can sound like a great idea. Go off and do what you always wanted to do. Here are a few things to keep in mind, though, before jumping into a new business post-retirement.
How Are The Finances Looking?
If you’re struggling to make ends meet with the money that you get from your 401K, pension, or whatever it may be, then you may want to think twice about starting a business. Sometimes, it’s actually the opposite: people have to take the risk because they don’t have enough to retire regardless. In an ideal situation, though, this side-business won’t compromise your living conditions now or in the future.
What’s a Realistic Timetable for the Business?
You may be ready and willing to work at 65. Do you think you’ll be able to answer the bell at 70, 75, or 80? This is not something that should necessarily deter you from starting a business. It could be something to think about as you draw out your projections for how much you want the company to make. If things are going great, you could hire more people and start to take your hands off a bit. On the other end of the spectrum, these projections can help you decide whether it’s a good idea to press on, maybe five years down the line or more.
Exit or Legacy Plans
As mentioned, the exit is potentially something that you want to work on within your budget. If the numbers get too far in the red at a particular point, it would be ideal if you had an out plan. At the same time, if things go great, you’re going to have to come up with a legacy plan. In that case, there may also be a number where you think about selling. That number can be a minimum revenue number or even your age. Some people will say, I don’t care where the business is when I turn 75, I’m out. That’s a valid legacy/exit strategy at this point.
Skills and Knowledge to Get it Done
If this business is going to be essential to your retirement savings plan or a way to make money past 65, it’s ideal to have at least some background in the industry. When the company is truly a passion project, then maybe the lack of skills is part of the fun. Ideally, to run a successful business, you’ll need to know a thing or two about the market before you venture into it. Therefore, previous experience can go a long way in this department.
Help From an Existing Professional Network
This point falls along similar lines as the previous one. It’s no secret that knowing the market and having an extensive professional network to rely on can help the business grow. That’s one of the main reasons people go into similar businesses once they retire. If you like what you have dedicated your life to, it makes sense to stay within those lines.
Is This Even Legal?
You’ll have to run the numbers to see if this is going to be a real business or a passion project. That’s step one, but another thing you have to do is figure out if you can legally run that particular business. Sometimes, retirees are barred from working in specific sectors. Of course, each industry can have its own set of legal requirements; these are all things that you’re going to want to keep in mind as you start a new company.
