Starting a business in retirement may seem daunting, but there can be many benefits as well. As with any new venture, the most important thing is to think carefully and not jump into anything unprepared. The most important thing is to start a business you know you’ll enjoy. If you’re retired, now is the time to think about doing something new and exciting, and a retirement business can be just that. Here are some important pros and cons to consider.
Pro: Earn Extra Income
Saving for retirement can be tough, and not everyone wants to sacrifice their lifestyle to make do. Starting a business in retirement is a great way to supplement savings and retirement pensions by doing something you love. Not only will the extra income help maintain your lifestyle, but it can also be a great way to add to your retirement savings in case you decide to hang your hat down the line.
Con: Liability
Owning or operating a business enterprise can sometimes be scary. If you have a physical storefront, someone may get hurt on your doorstep. If you sell products, occasionally a hard to notice mistake might cause issues. In many cases, you may be exposing yourself to liability. While there are liability risks in almost every business, this can be remedied by getting commercial general liability insurance. While the threat of liability can be intimidating, factoring liability insurance into your plan should ease most of your concerns. In fact, many landlords require it for any tenant renting commercial space.
Pro: Keeping Busy is Healthy
Going from working five days a week to having almost no structure to your day can be a huge culture shock. A key part of staying healthy in retirement is keeping busy with hobbies and other activities. Running a business, while certainly a lot of work, is a great way to keep your days structured and stimulating in retirement. Engaging with customers or suppliers will keep your mind sharp, and having a schedule is a great way to maintain healthy sleeping and eating habits.
Con: Startup Costs
If you’re retired, that means that you’ve worked your whole life to save for retirement. Starting a business will always require laying out money for initial investments, and that can be scary when you’re living on a fixed income. The key to success is to put together a strong, comprehensive plan for your business. Think about what you love to do and build from there. Be sure to consider any potential startup costs like rent, supplies, or inventory. While startup costs can be significant, they can be managed with careful planning.
Pro: You Can Leave a Strong Legacy
A retirement business is a great way to build a financial and community legacy for your family. Whether you’d like to leave a business behind for your children or want to make a lasting impact on your community, going into business in retirement can help you leave the legacy you want. You’ll be able to forge new friendships and networking connections and even teach your close friends and family about running your business. If you have grandchildren, teaching them about business is a wonderful way to spend time.
Con: Less Leisure Time
Running a business is time-consuming. Many people want to spend their retirement vacationing or sitting by the fire with a nice book. When starting a business in retirement, be sure to consider the time you’ll have to spend keeping things running. Consider a business you can run part-time if you aren’t ready to have a second career so soon after retiring.
It’s important to consider all of these things and talk to your family before deciding if you should start a new business after retirement.