Volume 3, Issue 3
Entrepreneurship: An Option for Retirees
For an increasing number of people, retirement signals not the end of a career, but rather the beginning of a new phase—entrepreneurship. Many baby boomers see retirement as an opportunity to start a new chapter in life, and they plan to use their hard-earned skills and knowledge to create their own independent businesses.
With increased longevity, retirement often makes up 25%–30% of a person’s life. According to the 2008 Retirement Confidence Survey conducted by the Employee Benefit Research Institute (EBRI), around two-thirds of workers (63%) plan to work in retirement. Financial reasons, such as earning money to pay bills and keeping health insurance or other benefits, are primary considerations, but large majorities also report that they intend to continue working to stay active and involved (87%) or for the personal fulfillment of working (79%).
Regardless of motivation, there are many advantages that those age 50 and older possess when starting their own business ventures. By retirement, mortgages have often been paid and children have graduated from college. With fewer financial obligations—and perhaps a cushion from a lifetime of saving—retirees may have the opportunity and time to develop a strong business plan and concept. Retirees also have the benefit of utilizing the many business contacts and skills acquired over their working years to enhance product development, marketing, and sales.
Many retirees find the opportunity of their dreams during their golden years. For example, prior to retirement, Bill and Helen had thriving careers in accounting and travel services, respectively. After retiring, Bill and Helen quickly discovered that they were not content to stay at home and thought that combining their skills would serve them well in their own business endeavor. Drawing upon Bill’s bookkeeping finesse and Helen’s years of customer service, the couple opened a bed and breakfast, which has allowed them to use their expertise in a new and challenging way. If you want to use your years of wisdom to create your own company, here are some questions to consider:
1. Are you personally motivated? Building a business requires intense dedication. You will need to develop your own ideas, set your own schedule, and manage a variety of responsibilities.
2. Are you a “people” person? Running your own business will likely involve interaction with various professionals and personalities. If you can harness the interpersonal skills you gained from four decades in the working world, you will be better prepared to handle difficult clients or professionals.
3. Do you have the ability to think quickly? Owning your own company may mean that you will have to provide answers and make decisions quickly, and sometimes under pressure.
4. Do you have passion and stamina? It is often said that you must love what you do. Realize at the start of the enterprise that a good deal of time and effort will be required.
5. Are you organized? Organizational and planning skills can lead to continued business success. Finances, invoices, and schedules are just a few of the tasks at which you must be or become proficient.
6. Is your energy level high? A business requires a lot of work, and it can be physically and emotionally stressful. Those who are energetic often do well because they are propelled by their desire to succeed and have the energy to follow through.
7. Will your family be supportive? A new business can consume a lot of your time, mental energy, and sometimes, capital. Make sure to tell your family what they can realistically expect from your business venture, and gain their support and trust.
There are many advantages to entrepreneurship. The chance to be your own boss and experience the payoff of your own hard work makes entrepreneurship an exciting and educational adventure. Interestingly, lack of experience often accounts for many small business failures. Therefore, decades of experience may put you ahead of the game before it even begins, and many of today’s retirees are embracing the challenge.