Many people dream of getting to retirement and enjoying life on a golf course or a beach. But others are excited to use their newfound free time to explore new opportunities - by building a business! Whether your ambitions are big or small, retirement can be a great time to make your entrepreneurial dreams a reality. Keep reading to learn how to jump-start your journey of becoming a business owner in your retirement.
Being your own boss, working anywhere you please, and doing something you're passionate about every day is appealing to most. That's what makes the dream of running a business a noble one. Thanks to a long list of positives that go hand-in-hand with pursuing your passion, starting a business in retirement has become an increasingly popular trend in recent years.
Luckily, it's never been easier to set up your own business. Most paperwork and registration can be completed online, and if you have a product or service ready to go, getting a website up and running is a straightforward process.
You only need three things to get started - a good idea, ambition, and internet access.
Starting a business in retirement is not only a great way to bring in additional income, it's also a great way to set new goals and generate new projects to focus on as you adjust to your new lifestyle. So what's the first step?
Think of a Good Business Idea
Deciding what to focus your business on is often the toughest decision an entrepreneur has to make.
For some, a business idea might stem from something you've wanted to try for years. Perhaps your inspiration comes from something you're passionate about, or from a problem you can't find a good solution for. Drawing a blank? That's okay! You can also use this opportunity to try something entirely new.
Turn your passion project into something you get to do every day (and get paid for!).
To help narrow your focus, think about a need, then jot down products or services that could help address that need. Start with a list, then search the internet to see if anything already exists. Take notes on your findings and decide what you can do to improve upon what's already available. This can be as simple as giving a new neighborhood access to a needed service or as complex as improving upon a painful process.
Once you have a basic plan figured out, run it past friends and family to see if they agree. Then, ask if they have input on how to make your business idea even better.
Here are a few popular retiree business ideas to mull over:
- Consulting: This option lets you put your decades of experience and expertise to work on your schedule! Whatever your skill set, there are tons of businesses begging for guidance on everything from efficiency to event planning.
- Ecommerce: Launch an online storefront and sell products you love, or ones you create!
- A services business: This category can include anything you physically do for others. Popular options are cleaning, gardening, dog walking, childcare, and so on.
- Restaurant Have you always wished your neighborhood had a better coffee shop, cafe, bistro, or authentic restaurant? Open one! Don't want rent overhead? Consider a food truck!
Are you a maker who doesn't want the overhead of a shop? Sell your goods online, offer to be commissioned for projects, or rent a booth at local events!
A Word to the Wise
Before you dive in head first, it’s important to look out for scam business ideas. Be wary of people selling concepts who offer to let you in on their business idea, but only after you pay them a suspicious amount of money. If it sounds too good to be true... you know the rest. Read up on common small business scams to protect yourself from falling victim. As terrible as it is, retirees are commonly targeted by scam artists, so get informed and stay vigilant.
Branding Your New Business
Coming up with a clever name is vitally important. You want your brand to be able to quickly convey what types of products or services you offer. Once you've nailed down a good brand name, choose a solid domain name for your brand’s website. Make sure it’s memorable, too! You’ll want your business name to stick in people’s minds when they hear it.
Try to come up with a clever name that both communicates what you have to offer and is memorable. In-N-Out Burger is an excellent example.
Once your business is established, it's time to focus on growth. Early on, the key to getting new customers is to ask for referrals and to encourage existing customers to leave reviews. Why?
- Generating referral business is an easy way to grow your customer base. If you refer your sister to a company because you had an excellent experience, there's a good chance she'll give them a try. Be sure to capture referral names and reach out to them to ask for a testimonial!
- Reviews are highly influential in helping potential customers determine whether or not you're offering a reliable service or selling a quality product. As an added bonus, online reviews on sites like Yelp will teach you a lot about how people view your business. You'll get candid feedback on things you're doing well and on things that could use some improvement.
For many consumers, customer service is the number one determining factor in whether they'll continue to use a product or service. A great experience will encourage them to refer your business and to leave positive reviews, while a negative experience could damage your brand. That's a good incentive to make superior customer service a priority!
Retirees who open businesses have a unique and newsworthy hook and there's a big movement to support local small businesses. Once your company is launched, try to get in touch with local media to see if they'd be willing to feature your business in a local human interest story.
Getting a Business License
In most states, if you’re offering a professional service or selling a product, you're required to have a business license to operate. Check with your state government website to determine what steps are required to license your business.
There are a few different types of licenses you can choose from, depending on your goals and liabilities, and on your state's rules and regulations. You can register as a sole proprietor and don't have to incorporate your business. However, choosing to incorporate can be a really good idea, especially for retirees. If anything ever goes wrong and you get sued, incorporating your business will protect you from being held personally liable. If you choose to do so, be sure to incorporate your business early on to protect your personal assets.
Registering your company and getting a license to operate within your state is one of the most important steps of starting a business. Neglecting to register with your state before you start conducting business can result in hefty fines and headaches down the road.
Marketing Your New Business
While you might come up with the world’s most useful tool or offer a one-of-a-kind service that only you can provide, it’s impossible to increase revenue if you don’t tell the world about your business!
As mentioned above, the best place to start is almost always word-of-mouth. Make sure everyone in your social circle is aware that you’re starting a business, and don’t be afraid to be a little shameless here. Make it a short-term goal to be comfortable and successful at promoting your own work.
Spread the word to make people aware of your new business! Get business cards made and hand them out to neighboring businesses, friends, family members, and everyone you meet.
Make sure people can find you and know how to reach you. Even if you're not real tech-savvy, build a simple website or set up a Facebook business page that includes your contact information and product or service offerings. Not sure where to start? Read up on how to build a site on a user-friendly platform like WordPress.
It also helps to familiarize yourself with social media for brands. Facebook, Twitter, Instagram, and niche social sites and forums can be a great place for you to get the word out about your new business. Doing so will not only help you spread the word to your social circle, it can also help you attract new customers.
If you’re opening a brick-and-mortar shop, run local ads or offer walk-in specials to generate foot traffic. Consider partnering with other local businesses to share and reduce marketing costs. As long as you aren’t directly competing, a cooperative marketing effort will help both businesses thrive.
Collecting Revenue for Your Business
First, you'll need to set up a Tax Identification Number (TIN) with the IRS. You have to report your revenue on a quarterly basis and will have to make sales tax payments to all applicable state and local tax jurisdictions on their filing schedule.
It can take time to get organized with taxes as a new small business owner. As a first step, focus on making sure you're properly registered with local and federal entities. You'll also want to purchase software to help you manage your money.
Before you start accepting payments, make sure you set up your federal business tax ID number, read up on sales and use tax requirements, and invest in a good payment processor.
To simplify your accounting, a business bank account is a must. Luckily, there are several banks, large and small, that offer great benefits for small business owners. Check with county credit unions in your area first, as they tend to offer great rates. Or, if you need the flexibility of national coverage, some big banks have free accounts. Just be careful with minimum balance requirements, as big banks often charge fees if a balance threshold isn't consistently met.
Learning how to use small business accounting tools to regularly send invoices and receive payments often comes with a bit of a learning curve. But, it's a necessary skill to have in order to get paid in a timely matter. Making it a habit to send invoices in a timely manner from day one will help you minimize cash flow problems.
If you're not comfortable managing money, consider hiring a part-time small business accountant to help keep your finances in order. It’s better to pay an expert a few hundred dollars a month than to make a minor mistake that can cost you much more in the long run.
Time to Set Sail on New Adventures
Dedicating your time to creating a business centered around something you love is a great way to find fulfillment in retirement. Use this post as a guide on how to get started and enjoy the entrepreneurial journey!