Starting a Business in Retirement by Bill Storie
We posted a new video a few days ago in our Olderhood Facebook Page, about a recent workshop we did about Starting a Business in Retirement. We had a tremendous response with many people wanting to know more. We’ll be issuing a couple of follow-up videos in the next few days so hang in there.
There does seem to be a lot of people who are either in retirement or headed that way soon, who perhaps would like to work in retirement, and especially in their own business.
The fact is that there are essentially two reasons with two sub-sets as to why you would like to start a business:
Money – (a) Must have
(b) Would like to have
Activity – (a) Physical
Think about it.
The problem is that if your reason is Money/Must have then the chances are that you didn’t plan your finances well before you retired. If you are still in employment, then make sure you do plan well. It is critical. If you’d just like a little bit more money that’s fine. That should mean that you can focus more on the Activity reason. The physical sub-section may seem OK in the early retirement years, but you would have to think about getting older and your ability to sustain physical activity. If you’d like to be a lumberjack at 65, how long would you be able to keep doing it as you age?
I think many people (myself included) decide to do something in retirement to maintain the use of the brain and mental alertness. That’s a great reason to work in retirement. Whether you want to start a new business or not is a personal choice of course, you must be certain that you don’t drain your retirement fund too much. In other words, there is no point in using lots of capital simply to keep the grey matter in motion.
I’m sure a lot of people feel that they have earned a rest in retirement and see no purpose to continue working at all, far less starting some new risky venture. A lot of people prefer to play golf or work in the community, and that’s fine, but remember that all things being equal, you will have to fill your days, for a very long time.
In our workshop, we introduced a man who, when he retired, started a laundromat. This was a major investment in terms of money, time and effort. It was a huge gamble. He talked about the research he did by walking the streets and checking out other laundries in town. He tested some of them on his own. He investigated what machinery he would needed, found the costs, and out a business plan together. He went to the bank to get some financial support, which he got. They told him that when he wanted to expand that he should come back and they would lend more money. He did expand (in fact he at least doubled) but financed it himself. The bank was not needed second time around.
This man was so enthusiastic. Our audience loved listening to him. Me too.
Not everyone would take a large financial risk and that must be the uppermost consideration. If you spend your retirement fund too soon, then the downstream income generated from your retirement fund will be severely impacted. Beware.
If you’ve never run a business throughout your working life, then the emotional roller-coaster ride you could experience if you start a new business could be very stressful. Would you really like to lie awake at night in retirement worried if you’ve made a mistake? I think not. Running a business and making decisions is not for the faint-hearted. All sorts of twists and turns will arise, which you never considered. They will, you can’t avoid them.
That’s enough to get you thinking.
Watch out for our Olderhood Facebook Page over the next week for follow-up videos.
By Bill Storie