For many seniors, retirement is like a much-needed vacation, when they finally get to spend more time with their loved ones, rediscover their hobbies, and enjoy the results of the investments they’ve made throughout their lives. However, this isn’t a rule, and retirement can also be a time for innovation and entrepreneurship. In the US, more than half of all small business owners are 50 or older and, statistically, the ventures established by senior entrepreneurs are more likely to survive five years after establishment. Hitting the retirement age doesn’t mean you should give up your business plans. On the contrary, you can still learn new things at an older age, and you can be successful. However, like any major endeavor, starting a business requires a lot of planning, and you have to get ready to face a few challenges too.
If you’re still on the fence about starting your own business after you retire, these opportunities and challenges can help you put things into perspective and balance your expectations.
Your previous experience is your biggest asset.
Most reasons why startups fail center around the lack of experience: in choosing the right personnel, balancing costs, analyzing market demand, and prioritizing business processes. But, when you’ve worked in a field for more than 30 years, your experience becomes invaluable. You’re already familiar with what customers want, and you may even be able to attract customers who loved working with you at previous companies. Even if you’re launching a startup, you will experience less uncertainty, and you’ll be less likely to make beginner mistakes. Of course, you’ll still need to be adaptable and check the new requirements of the market. For example, you may need to consider moving some processes online, investing in enterprise eCommerce software, and staying active on social media, which will require outside consultancy. But the fact that you know how to talk to customers and manage finances will always offer you an excellent start.
You can stay active
The sudden switch from being active and working for eight hours a day to having too much time on your hands can seem ideal to some, but there are many cases when the slow pace of retirement doesn’t help your mental health. In fact, over the years, numerous studies have shown that retirement can have a negative impact on seniors’ health because it encourages a sedentary lifestyle. Meanwhile, seniors who continue to work at least part-time are more likely to stay healthy, happy, and socially engaged. Being in charge of your own business can boost your sense of accomplishment, motivate you to learn new things, engage with others, and overall maintain a healthier state of mind. The idea that once you retire, you’re too weak to do anything but since on the front porch, watch TV, and take your grandkids for a walk has long been debunked, and so has the myth of the young entrepreneur. The world’s oldest app developer, Masako Wakamiya, is 84 and started using computers at 60, after working as a bank clerk all her life.
Monetize your passions or stay on the safe path?
When it comes to the niche of businesses started after retirement, seniors tend to follow two schools of thought. The first says that you should open a business in a niche that you’re familiar with – preferably the one you’ve worked in for the longest time. This way, the transition will be smoother; you may already have a client base and know the ins and outs of the industry. This may not be the most exciting option, but it’s financially secure. The second school of thought says that retirement is the best time to rediscover your passions and monetize them: if you’ve worked as an accountant for 40 or so years, but have always wanted to start an antique shop, now is the time to do it. The biggest advantage of turning your hobby into a business is that the whole process will feel less stressful and more rewarding, but, at the same time, you will need to learn new things because the market may be a bit different from what you expected.
You shouldn’t start a family business without thinking of succession planning.
In a company that’s not family-owned, there is a transparent, formal chain of command, and if the CEO steps down, you and the other stakeholders know what needs to be done. But according to a 2016 global PwC study, 43% of family businesses don’t have a succession plan in place. That can be a huge mistake, and so is having an informal succession plan. Although this may not be fun to think about, you need to designate and train a formal successor and not let things be “implied.” Otherwise, the longevity of the company is jeopardized. After you have to step down, the remaining family members may not know how to grow the business, maintain your long-term vision, and they might even compete amongst themselves on who should lead the company going forward.
Seniors are more prone to stress and burnout.
Starting your own business in retirement can be financially and emotionally rewarding. However, it’s essential to know your limits and work at a reasonable pace. Oftentimes, from the desire to prove that they’re still active and capable, senior entrepreneurs take on more challenges than they need to, work long hours, and refuse to delegate. These habits are destructive for entrepreneurs of all ages, but after retirement, they can be even more dangerous. Stress and burnout can cause many health problems and, if you already have chronic health conditions, you’re taking on even more risks. So, as much as you wanted to stay active, remember not to overdo it and make your schedule in a way that supports your physical and emotional well being. Surround yourself with competent people that you trust (this will be easier if you start a family business), know your limits, and don’t be afraid to ask for outside help when things get out of control. If you have a health condition that requires you to take a break, take it. Your company will still be there when you get better, and you can discuss important, big-picture things without going to work every day.