Small business ownership is a good option for many Baby Boomers. One in four individuals ages 44 to 70 are interested in becoming an entrepreneur and 63 percent of Americans plan to work during retirement, according to the website http://www.encore.org . Corporate layoffs, the need for supplemental income, a desire for a flexible lifestyle, and the need to stay active and engaged all play a part in the rise of “Encore Entrepreneurs.” Workforce veterans bring a lot to the table including maturity, strong finances, and wide networks of professional contacts.
Alternatives to retirement can include the opportunity to turn lifetime hobbies into a lucrative line of work. Special interests can be converted into online ventures such as buying and selling collectible merchandise. Skills acquired during a career can be transformed into a sole proprietorship like consulting or freelancing, which are natural home-based businesses.
Time commitment should be one of the first considerations for new Encore Entrepreneurs since many business startups entail more than a full-time job. As with any business, a formal plan should be written. In this case it should include enough flexibility to maintain a work and life balance. The decision as to what kind of business to start should revolve around what someone is good at and what they enjoy doing. The business does not need to be based on a hot new trend or reinvent the wheel. It does need to serve an unfilled niche and it should provide a better service or product than its competitors.
Startup costs could be as little as $1,000 for a home-based consulting business or several thousand dollars to start a landscaping business. The source of funding is critical once the startup costs are determined. Ideally, Encore Enterprises would be funded out of one’s own savings or by leveraging existing assets. There are plenty of alternatives for funding, but before tapping retirement accounts such as a 401(k) or an IRA it’s advisable to seek the advice of an accountant or tax attorney.
The number one issue for any plan is: Does the business have income potential? Thought will need to be given for estimating the monthly revenue and expenses for the new venture. This process will involve research and it is advisable to consult with a business planning professional. Business resources can be found at http://www.sba.gov/encore ; including a short online course that will be of great interest to Encore Entrepreneurs.
Gordon Smith is a business specialist at the Small Business Development Center at Clovis Community College.