Second Act: A Guide to Starting a Small Business During Retirement

Maybe you’ve been thinking of starting a business for years, but a full-time job and family commitments didn’t leave you with enough time to make it happen. Now that you’re retired, you can finally act on that idea you've had tucked away. Here's where to begin sorting out what you need to know to run a business in retirement.

Start With Some Research

Even if you have a business idea that’s in the same field as your career, there will be aspects that will be different. Spend some time learning about the challenges similar small business owners face. Are you going to market your business, manage inventory, close sales and keep your books on your own? If that sounds like too much, figure out what it will cost you to hire the help you’ll need.

And maybe you aren’t sure what type of business you would like to start. Again, some research will be useful. Business ideas for retirees could be as varied as running a franchise of a restaurant or hotel, consulting, freelancing or launching a home-based business for seniors like an online store. You’ll want to figure out where your skills, experience and abilities are the best fit.

How Important Is Income?

Do you have to supplement your retirement savings and Social Security to maintain your quality of life? Or are you starting a business for the challenge and opportunity?

If you’re relying on income, you’ll need to be confident that your business will succeed. Otherwise, a job with a steady paycheck might be a better option.

Is It a Hobby or a Business?

Maybe you want to write a memoir, start a social media presence where you share your favorite recipes, plan trips for busy families or launch another popular business for retirees. Whatever your idea is, you’ll need to be sure there’s a market out there willing to pay for your product or service. 

If that doesn’t seem likely, maybe you want to focus on your idea as a passion project and set aside the expectation that it will generate income. 

Keep in mind the IRS will decide whether you have a hobby or a business based on certain considerations. 

Show Me the Money

If you’re starting a business on a re-selling website, a consulting service or another company without a lot of overhead, you might be able to finance your business out of pocket. But if you’re stocking inventory or purchasing a franchise, you’ll need to get some financing in place.

A Space of Your Own

If you’ve been working from home during your career, you may have a dedicated office space that will work for your retirement business. If not, or if you need to meet with clients, you may need to rent office space or find a shared space. 

You’ll also need space to store any products or inventory. Maybe you have a family home with empty rooms your kids used to use, or garage, basement or attic space. Keep in mind you’ll need to get your things in and out of this space or find someone to help. If you need more room or you need space that’s easier to access, you may want to rent a storage unit.

Make Sure You Really Want to Be in Charge

Can you retire and still own a business? Sure! If you know for sure that launching a new business is for you, go for it.

But you might want some of the excitement and challenge of the workplace without all of the responsibility. If that’s the case, consider joining a small business as a partner. You might be able to help a start-up grow without giving up other things you want to do in retirement.

You may also want to consult with several small businesses that could use your expertise but can’t afford to hire you full-time. 

Seek Advice Before You Make the Leap

Starting your own business is a major change, and there will likely be aspects that are new to you. A Farm Bureau financial advisor can help you with some of the challenges. They can look at your overall finances and make sure the business fits in with your plans, and they can help you connect with any insurance coverage your new business might need. Reach out today for a consultation.