Ready to start a business in retirement?
Are you giving retirement a rethink? Rather than stop working, more people now use their experience, professional connections, greater financial security and free time to set up in business and strike out on their own.
Perhaps it’s to realise a dream and finally be your own boss.
Or maybe it’s a desire to give something back to society – to use experience and knowledge to share your skills with others who need them. For many, it’s a chance to turn a hobby into a business or inject a renewed sense of purpose into their retirement. In other circumstances, it could be down to financial necessity and difficulty finding a job.
Whatever the trigger, the number of people over 50 starting their own business has risen dramatically – they account for 43% of those who have started their own business in the UK in recent years, a study shows.
And the over-50s are proving to be more successful than the stereotypical 20-something entrepreneurs.
More than seven in ten businesses begun by those in their 50s survived at least five years, compared to only 28% of those started by younger age groups, Age UK found.
But there’s no getting away from the fact that starting a business at any age, requires hard work, time and dedication to give it the best chance of success.
When you’re older and approaching retirement, there are additional considerations to bear in mind.
If you’re considering joining the ranks of the ‘olderpreneurs’, we’ve put together a list of key points to consider.
- Be aware of extra pressure on your personal finances
Towards the end of any working life, the advancing years mean – to put it bluntly - that you’ve less time to make money.
It means any risk you take with personal savings or income carries a greater chance of not being able to be repaid in the event of commercial difficulties.
And if you’re planning to use money built up over a lifetime – tax-free pension cash or lifetime savings, say – for a new venture, it can be almost impossible to replace if it takes a lot longer to succeed than you imagine.
This may feel like - rather, it’s to ensure you’re fully aware of the financial impact of setting up a business later in life.
There are other implications for your finances too.
Older entrepreneurs can face difficulty going down the traditional route of bank loans to kickstart their business due to their age, so you might need to consider alternative forms of funding.
The Government has a list showing where you could find potential financial support and also backs the Start Up Loan scheme.
However, you may be reluctant to take on huge debts at this point in your life, given the impact this could have on your personal finances. One way to gauge this would be to estimate a likely start-up cost.
To get an idea of the costs to get your business up and running, it’ll be worth seeing if you can talk to other business owners who’ve already been there and done it.
Try asking your local Chambers of Commerce if they can offer any help, or get in touch with your local authority business support networks. You should also bear in mind that becoming self-employed or starting your own business could affect your taxes and any benefits you may receive.
With so much to think about, it could be worth getting professional financial advice to fully understand how taking this route will affect your overall retirement plans and finances.
- Work out what kind of work/life balance you want in retirement
Starting your own business can be very liberating – freedom for yourself after years of working for others, and an opportunity for a better work/life balance to suit you.
Of course, running your own business can be one of the most challenging jobs, and many older entrepreneurs have found that it took up far more of their time - for much longer - than they had anticipated.
So it’s vital you think about the consequences it could have on the lifestyle you want for yourself.
This is particularly pertinent for any spouse or partner you have, as if you’re looking to grow old with them, their life will probably be impacted by your decision to effectively go back to work.
With this in mind, it’s vital to sit down and speak with them to discuss the support they are willing to give you.
You can set boundaries and settle upon a target work pattern that suits you, your family and your business.
It may be that considering a part-time business would suit you better, or going into business with a partner rather than shouldering all of the responsibility and work yourself.
Alternatively, you could consider the growing trend for going part-time with your current employer while using the spare time to launch your own company.
This gives you the security of a source of regular income while attempting to go solo.
- Put a priority on your health to keep you – and your business – in good shape
Running a business could give your health a boost in older age – it can help keep your mind and body active and give you a fresh purpose and daily structure.
However, it can also be extremely demanding and take a toll on you physically and emotionally. The energy needed to set up as an entrepreneur can put intense pressure on you at any age; when you’re in your 50s or 60s (and older), your health is an extra dimension to take into account.
It’s vital that you prioritise your health and wellbeing, and if you have any health issues you should consider them carefully - and honestly - before committing yourself to starting a business.
For many, the key will be to maintain a healthy work/life balance. You can start simply by ensuring you build a routine into your day that lets you fit in some exercise, gives you time to think clearly and allows you to engage with family, friends or local networks you rely on for support.
It’s worth emphasising that if you do have a more serious health condition you need to manage, you may find - as for maintaining a work/life balance - that a part-time business or partnership could be a better route for you.
- Mind the knowledge gap
The skills and experience you’ve gained throughout your working life will be a huge asset when it comes to starting your own business.
But it’s also key to recognise any gaps in your knowledge that could be vital for your business success such as the latest technology, new marketing methods or access to start-up finance.
This is especially the case if you’re about to embark on starting a new company in an industry you’ve never previously worked in.
Thankfully, there is a great deal of general and tailored support available to help you access information and training which can improve specific business skills you may need:
- The Federation of Small Businesses has a subscription service which provides its members with a range of business services including advice, financial expertise and support
- Try Local Enterprise Partnerships - regional business-led partnerships between local authorities and local businesses – for advice on business funding, support and guidance
- For help getting a business off the ground, Enterprise agencies offer free support, training and advice
- To boost your digital knowledge, Barclays Digital Wings has free online tools and tutorials
However, you may find it’s more efficient - and a better use of your time - to get outside help in areas that you have less experience in, whether that’s an agency or freelance support for marketing or an accountant for business finance, for example.
Looking for more advice on starting a business?
We’ve more on how to develop your business idea, avoid common business mistakes and ways to market your business.
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