By Jessica Thiefels, Next Avenue Contributor
Retirement is the perfect time for things like travel and exploring old passions. It can also be a great time to start a business.
That was the case for Paul A. Dillon, of the Raleigh-Durham, N.C. area. He retired as a managing director at the RSM McGladrey accounting firm in 2006, just shy of his 61st birthday, but didn’t slow down.
Instead, Dillon started his own firm, Dillon Consulting Services. And the former U.S. Army Reserve 1st Lieutenant, who fought in the Vietnam War, founded Bunker Labs, a startup incubator for veterans. He’s also working with the nonprofit mentoring group Entredot to start a support program for aspiring veteran entrepreneurs in North Carolina, known as Bunker RDU.
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“Retirees have a number of advantages over younger founders, including years of experience learning on other people’s money,”
A consulting client led Dillon to help veterans. That was “a dream that I’ve had for many years,” Dillon said.
5 Reasons to Start a Business in Retirement
Here are five reasons you, too, might want to start a part-time business in retirement:
1. You Get An Opportunity to Work
When you’re in your 60s, it can be difficult to find employers willing to hire you to work part-time, despite your experience and knowledge. Becoming your own boss takes care of that potential obstacle.
Says Nancye Rivera, who decided to start Plus Bookkeeping Services in Chicago at age 60: “Corporate America can be harsh to senior seasoned people. It’s extremely difficult to have job security at this age. Finding a new job is even more challenging.”
But starting a small business has become more possible than ever. “Changes in the economy have led to more and more companies outsourcing services —making it the perfect time for small businesses to develop,” says Rivera.
2. Your Work History Is an Advantage
You’ve likely accumulated an extensive base of knowledge throughout the course of your career. That’s a great reason to start a business in retirement, too.
“Retirees have a number of advantages over younger founders, including years of experience learning on other people’s money,” says David Deeds, Schulze professor of entrepreneurship at the University of St. Thomas and executive editor of the EIX (Entrepreneurship and Innovation Exchange) Board. “They’ve observed what works and what doesn’t, which should limit costly mistakes.”
For example, retired professionals know how to give presentations, work with executives and build successful teams. All of these skills are valuable as you begin a business. You’ll know how to connect with customers and sell yourself — two key characteristics for successful entrepreneurs.
3. You Have Established Finances
When you’re starting out in your career, odds are you don’t have much in savings to launch a business. But by the time you’re retired, you may well have some kind of financial cushion. What’s more, Deeds says, retirees “generally have lower monthly cash needs, since they are past kids and frequently have the house paid off.”
This means starting a business can be less stressful financially. With consistent income and no full-time career to maintain, you can devote the time needed to build a successful business. This also allows you to be flexible as opportunities arise and fall, which is key as an entrepreneur at any age.
For Dillon, the ability to move around and try new things has been one of the most important learnings as a retiree turned successful business owner. He says: “Be flexible! And, find an area or industry that is underserved where you can add value…then go for it! Don’t take no for an answer. If you meet with rejection, get up, brush yourself off, and try again. There is always more than one way to skin the proverbial cat.”
4. You Have Niche Experience
Having experience in a specific niche means you can go embark on a business with knowledge and insights that many young entrepreneurs don’t yet have. And that can set you up for greater success.
According to CBInsights, the top five reasons startups fail are:
- No market need
- Ran out of cash
- Not the right team
- Get outcompeted
- Pricing/cost issues
But your specialized experience gives you a better understanding of the market, what the customer needs and what potential competitors are doing. So, you’re less likely to fall prey to the common startup challenges.
5. You Can Revisit Your Passions
After a lifetime of work in your chosen career, retirement is the perfect time to revisit your passions and turn them into a business. Just ask Nina Bandoni, of the Tampa/St. Petersburg, Fla. area.
The former chair of LIHLN (Low Income Housing Leadership Network) and City Commissioner of Safety Harbor, Fla., started the Sharing a Journey: Ageless Life & Style blog. It let her “share” her midlife progress and her earlier love of fashion, “which I have time for again!,” she says.
“I started my blog with the hopes of developing it into a business that would allow me greater flexibility than a corporate nine-to-five type job,” Bandoni notes. “Midlife is a great time to reconnect with yourself, try new things or circle back and pick up interests left behind when family and work responsibilities are at their peak.”
The Joy of Starting a Business in Retirement
Not only does starting a business in retirement provide extra income, you may find it offers psychic benefits, too.
“I firmly believe that one of the ways to be content in retirement or semi-retirement is to stay active and engaged with the world,” says Dillon.
(This article is part of America’s Entrepreneurs, a Next Avenue initiative made possible by the Richard M. Schulze Family Foundation and EIX, the Entrepreneur and Innovation Exchange.)