Experts: Should You Pursue Entrepreneurship in Retirement?
In 2021, Kimberly Schafer retired from her role as a research administrator at the University of California San Diego. Schafer had worked in that role for 32 years, but she wasn’t done working yet. At 62 years old, Schafer launched her first patented invention, Ring Thing, and started a business.
Ring Thing, a ring and jewelry holder designed to protect rings, was created by Schafer in 2014 after realizing she needed a safe place to store rings taken off while at the nail salon. The journey to get to production and launch took several years. While Schafer worked full time as a research administrator at the University of California San Diego, she also worked part time on her invention. As Ring Thing evolved as an invention — with the original version made out of a paper towel that Schafer shaped to look like what she had in mind — Schafer was able to file for three patents, a trademark and start BringThings, Inc., its parent company. Now, Schafer works on Ring Thing almost full time and said she loves the new and exciting world of being a business owner.
Embracing entrepreneurship is an exciting decision to make at any age. It’s especially thrilling for retirees to take a leap of faith if they carefully plan and have the necessary experience and wisdom to succeed. If you believe you’re meant to become an entrepreneur in your retirement years, keep the following considerations in mind before pursuing a big idea.
What Is Your ‘Why?’
Retirement offers retirees the time to reflect and discover. Perhaps they realize there is a service or product that could address the unmet needs of a group of people. This service or product may not yet exist and the retiree could be just the person to bring it into existence.
Kurt Heineman, financial planner at Vision Casting Financial Planning, said now is the time to explore what it may actually mean to start a business. This means looking into the purpose of your big idea or “Eureka!” moment and knowing the “why” for choosing entrepreneurship.
From there, you may begin developing a business plan, use your plan to determine how you will turn a profit on your endeavors and set relevant, clear short- and long-term goals for your startup.
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Are You Financially Prepared To Start a Business?
While many retirees are often in good financial health, usually with savings accounts, investments and Social Security assistance, this does not mean a retiree turned entrepreneur should spend all of their money on their newfound business or start accumulating unnecessary debt.
While there is a certain amount of risk that goes into becoming an entrepreneur, Heineman does not recommend spending all of your money on a business. As you gradually explore your big idea, use this time to network.
“One of the best things you can do when you start is talk to other retired people who started a business and learn their best practices,” Heineman said.
Some of the people you talk to may be able to provide advice about small-business funding or help you out in finding additional financial assistance elsewhere.
Similarly, one should be realistic about the timeline for turning a profit as a business owner. A general best business practice is to avoid starting a business with the end goal of getting rich quickly. Establish a timeline in your business plan that will allow your business to grow and earn money. Be comfortable in knowing it may take a bit of time to reach that goal, but it is attainable through hard work and careful goal setting.
Do You Have a Target Audience?
Your target audience will be explored further in-depth in the market analysis portion of your business plan. These are the individuals who will invest in your offering. You can use Census data to determine what the demographics of your audience look like, their needs, if the market is growing and what other opportunities look like. Once you know and understand who makes up your target audience, you’ll need to come up with a plan for attracting, capturing and retaining this audience as your customer base.
You can collect and act on potential customer feedback by hosting focus groups and conducting surveys to get unbiased feedback on your idea.
Are You Ready To Try?
When Schafer first thought of Ring Thing, she decided to try her idea on for size.
“I made the decision to really give it a go because it’s truly my passion,” Schafer said. “I knew that if I didn’t try, I would always wonder ‘what if?’ and I didn’t want to do that.”
Schafer’s career, and years spent being around scientists, also helped push her out of her comfort zone. “In science, many, if not most, experiments don’t work, but scientists keep trying until they find the right one that does work,” Schafer said.
Does Schafer believe it’s a good idea to pursue entrepreneurship during retirement? Absolutely, especially if you have your basic living costs securely covered and don’t need to risk your personal security to start a business.
“It’s a great time to pursue your dream and be able to do it with passion, while at the same time not worrying about your basic needs,” Schafer said. “This is an opportunity to use the wisdom gained over a career, including the importance of persistence, relationships, follow-through and effort.”
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