Here are some of the challenges you may face in starting your own business in retirement, but there are also lots of benefits too. Make sure you have an appreciation and understanding of them both before deciding to take the leap.

There may be many different reasons why you might want to start a business in retirement. To generate an income, to remain socially connected, to have flexible working hours or to turn a hobby or passion into an income stream are just some of the possible motives.

But along with the excitement of starting a new business in retirement, there are some things that you should probably consider before you take the leap.

Carefully Consider Start-Up Costs

Are you prepared to put some money into starting your business? Registering your business, marketing your business, and promoting your business are just some of the potential start-up costs.

Where will this money come from?

When you’re retired, you need to carefully consider how you will fund your new business without risking your retirement nest egg.

Starting a Business Takes Time

What can even be a more intensive investment in a new business is your time. To successfully launch a business, you need to not only offer a great product or service but also market and manage your business. Is this how you really want to spend your time in retirement?

Making a Business of a Hobby

If you plan to turn a hobby into a business in retirement, it can be a very different thing.

When you have a hobby, you are doing it for your own pleasure and enjoyment. You are able to do it when you want, where you want, and for how long you want. There are no imposed deadlines or demands on you or your talents.

When you run a business, however, you’re now doing your hobby for someone else, and they may be demanding. You may have deadlines to meet and possibly complaints to deal with. So, the hobby that you initially loved could potentially become “a job.”

The Potential Impact on Others

Running a business will likely take your time and energy. Now that you’re retired, did the people close to you possibly have different ideas of what they wanted to do with you rather than see you start a business? Do you have their support?

You should probably discuss your business idea with them before launching your business. Let them know what’s involved and how this may or may not affect them.

Running a Business Is Very Different Than Working for Someone Else

Yes, when you run your own business, you are the boss and get to make all the decisions. And yes, you also get to make all the mistakes. Being an entrepreneur is very different from being an employee, and you need to be sure you are really ready for this.

Small Businesses Fail

Unfortunately, many small businesses fail. According to the Small Business Administration, only 50% of new companies will survive five years. Is there really a demand for your product or service? Do you have the right skills and competencies to successfully run your own business? Before jumping in, just make sure that you’re prepared.

These are just some of the challenges you may face in starting your own business in retirement, but there are also lots of benefits too. Make sure you have an appreciation and understanding of them both before deciding to take the leap.

• Creating a Side Income in Retirement
• Your Strengths Don’t Retire When You Do
• A Realistic Second Career for Retirees

Reviewed May 2024

About the Author

Susan Williams is the Founder of Booming Encore, a website and social media network dedicated to providing information and inspiration to help Baby Boomers create and live their very best encore.