This was originally published on Monday, February 29, 2016, in the Pacific Daily News. Click here to subscribe to the PDN.
Q: I am 65 years old and just retired. I have always wanted to start a small business but never found the right time. Now that I am retired I want to peruse my dream and become a small business owner. Do you have any tips to get me started in the right direction?
Congratulations on your retirement! You are among the many who have retired and now have the taste for entrepreneurship. The baby boomer generation is showing us that retirement is not bingo and crocheting. According to U.S. Money, “People age 55 to 64 accounted for 25.8 percent of the businesses started in the last year.” Starting a business is not easy, but it gives you the freedom to work on your schedule and on your terms.
Do you have a business? Take a look around and evaluate your competition. Is there anyone you would be in direct competition with? Be honest with yourself and decide if you have a business or a hobby. Is there a customer base for you? Evaluate your skills. Seek the thoughts of others if your product is what you expect it to be.
Time involvement. Depending on the type of business you are starting, you may be working 80-plus hours. Are you up for those long weeks? Some business can be done at home and on your schedule and are not as time consuming.
Financing. Depending on the type of business you are starting, financing may be a huge concern. You do not want to use up all your retirement money funding a business that may never take off. Instead, look to the bank for a loan, an investor or the Small Business Administration (SBA). They offer loans for which you may be eligible.
Connections. One thing most retirees have are connections. After many years working with others, you have built a network of professionals that you can rely on for advice and to be your customer base as well. Don’t be afraid to reach out to them.
Business structure. Does your business require you to manage people? If so, are you up to hiring and managing a team? Retirees make great mentors and this is a great way to pass on your skills and knowledge.
Technology. Today’s business is just not brick and mortar. Many businesses are e-businesses and require a website. Most of the marketing today is done through social media. There are some great software and apps that can help you run your business efficiently. Don’t be afraid to use technology if you are not used to it. Sign up for a computer class or see if your child or your grandchild can help you out.
Asset protection. As a small business you and your company are joined. If your business goes under, so do your assets. Look at the different business structures and decide which offers the best protection for you. As a retiree on a limited income, the last thing you would want is the possibility of losing your savings.
Exit strategy. Is this a company you plan on passing over to the kids once you decide that you are done? Is it something in which they would be interested? If they don’t want to take responsibility, will you sell it or just dissolve the business? Have your plan written out and share it with your family.
Success. Do not expect your business to be an overnight sensation. Be patient and nurture it. With some changes along the way you may find that your passion and dream has turned into a lucrative business.
Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years of experience in retail banking and at financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at email@example.com and read past columns at the Money Matters blog at http://www.moneymattersguam.wordpress.com.