Entrepreneurial Encore? Why a Small Business
Might Be the Perfect "Retirement" Gig (and 10 Rules for Starting Your Own)
By Sean C. Castrina
So you don't want
to go back to the daily grind but frankly you're finding retirement to be a
drag. Starting a small business may be right for you. Here, I share insights
to help retirees create and sustain successful businesses, without sucking
up all of their time.
Most people look forward to retirement, viewing it as a time of relaxation,
freedom, and fun. Finally, I'll be able to do what I want, they think. No
boss breathing down my neck; no need to get up at a certain time; no stress.
And for the first few weeks or months, retirement lives up to the hype. But
to their surprise, many retirees soon find themselves pining for something
to do. They get bored and lonely. They miss feeling challenged and
purposeful. Often, too, they're constrained by a tight budget. And before
long they find themselves wondering, Now why did I think retirement was such
a good idea, again?
If you're experiencing the retirement blues yourself, I have a suggestion
you'll want to hear: Start your own small business.
It's a great way to stay busy and keep your mind active during retirement.
It's also a great way to supplement your retirement income, pay for that
condo on the beach or country club membership you've always wanted, or put
some extra money away for the grandkids.
With decades of work experience under their belts, many retirees are in a
perfect position to become successful entrepreneurs. And the best part?
Starting your own business won't take up all of your time.
In fact, with just 20 hours a week of organized and focused time, you can
build a solid foundation for small-business success. The rest of the time is
yours to garden, golf, read, socialize...whatever.
As a successful entrepreneur multiple times over and author of the new book
8 Unbreakable Rules for Business Start-Up Success, I have been
semi-retired-at least by traditional standards-since age 40.
I'm not saying I had enough money put aside by 40 to never work again. In
fact, I'm still starting businesses-most recently, to pay for my children's
college tuition. But overall, since I'm my own boss, I do the things I want
to do and work the schedule I want to work, with a lot less stress than I
experienced when I was working the daily 9-to-5 grind. With that kind of
flexibility and financial stability, why would I ever want to stop?
It's easier than ever before to launch your own business. Thanks to
Internet-based tools, virtual secretaries, and answering services, you can
reach and service many potential customers without ever leaving your
house-not to mention the 24/7 access to educational tools and the ability to
instantly search for answers to your questions.
If you're ready to start Round Two of your professional life, read on to
learn about my top ten rules of business for retirees:
Figure out your field... Perhaps you already have a clearly defined
vision for your business: You'd like to uplevel your erstwhile hobby and
design, make, and sell original pottery, or you'd like to use your
background in accountancy to start your own tax service. However, it's very
possible that you're one of many retirees who aren't sure which field to go
into. (Anything but the job I just did for 40 years! you think.) In that
case, I recommend starting a service business (anything from home cleaning
to tutoring to adult care) for the following reasons:
• They require minimal money to start. I've never started a service business
with more than $10k, and many with less than $3k-including businesses that
have made me millions!
• Many service businesses don't require a prior work history in the field or
• In most cases, they can't be outsourced or performed by computers so
you'll always have work.
• Since you can hire others to perform the actual work while you handle the
key behind-the-scenes management tasks (like hiring, supervising, taking
client calls, marketing, etc.), service businesses are a great source of
passive income. For instance, I started a mobile car detailing business in
my 20s. I hired an employee to do the work, charged $95 for a full detail
inside and out, and gave my worker 50 percent. All I did was make the phone
ring and schedule the jobs. I didn't get rich, but I did make an extra $25k
a year-not bad for three to five hours of work a week during my down time!
Entrepreneur.com has a great list of service businesses to start you
...but do your homework before making it official. Once you've
familiarized yourself with the possibilities and identified a few types of
businesses that might be needed in your area, try to poll at least 50 people
to see which services they would use in the next six months and if they'd
pay the price you would charge. Their answers will give you a good idea of
which field you should go into.
Also, before pulling the trigger on your business, take time to research the
licenses, permits, and certifications you may need for the industry you're
entering, and make sure that obtaining them won't be prohibitive. You can
usually find the information you need at your local business tax office or
by contacting your Chamber of Commerce. And take it from the voice of
experience: Start filling out that paperwork early. Government bureaucracies
can be painfully slow!
Make "home sweet home" your "office 'suite' office." Odds are, you'll
be starting your new business from home-a place that's full of distractions
ranging from laundry baskets to televisions. That's why setting up a
dedicated workspace is crucial for productivity. Depending on your home's
layout and your personal preferences, you might be able to use a spare
bedroom, a basement, a detached garage, or even a nook in the living room as
Personally, I converted our dining room into an incredible home office. I
was able to do this on a dime because the room was already equipped with a
large but seldom-used table. If you go this route, you might want to add a
file cabinet and swap the chandelier for recessed or track lighting. As I
found out, it's hard to tap into your entrepreneur mojo when you're
constantly ducking a chandelier!
Also, if you set up a home office, don't forget to capitalize on tax
deduction advantages. For example, if you set aside a separate room of your
house in which to conduct your business and/or store products, you may be
able to take a home office deduction. You can also write off transportation
expenses to and from your home to your business appointments and, in some
cases, expenses related to car maintenance and repair.
Create a dream board to keep up your motivation. While you're still
in the planning stages, set aside an hour to tap into your creative side.
Envision your goals for your business: what you'll make or sell, who your
customers will be, and-most importantly-how being an entrepreneur will
positively impact your retirement. Then glue images, possibly a photo of
that condo or country club brochure, and words that remind you of those
things to a piece of cardboard or poster board, and make sure the dream
board is visible in your workspace.
Dream boards may seem small, but they're very important. On those inevitable
days when you think you must be crazy for starting a business after finally
exiting the workforce, looking at photos of the vacation destination you
want to visit, the logo of the college your grandchild will attend, or your
debt-reduction schedule will motivate you and remind you why you became an
entrepreneur in the first place.
Don't underprice yourself. When you're just starting out, you may be
tempted to offer rock-bottom prices for your goods or services. After all,
you don't want to alienate potential customers by charging too much...and
isn't underselling the competition a reliable strategy? Well, maybe-but
that's not the way to make a profit. Especially when you're just starting
out, you can't be in the business of offering mega-discounts. If you recoup
only enough money to pay labor and operating costs, you may be helping to
feed your employee(s)' family, but not your own.
Underpricing is without a doubt the biggest mistake new business owners
make. Often, the urge to undercut the competition is just too great, but
doing so can quickly hurt your business. What you need to do first is figure
out all your costs and what you want to make, and then use that information
to determine the price. After determining what you need to charge to make
what you set out to make, you may find the business you chose does not work.
There are also many ways to add value to your services that will allow you
to charge more if you have done your homework identifying what your
competition fails to offer.
Make room for a marketing budget. One of the biggest mistakes new
business owners make is not including a marketing budget in their operating
costs. In a nutshell, this is the money you invest every week or month to
tell your community why they need your product or service and why your
company is the one they should choose.
If you do not reach and retain customers, you won't be in business-you'll be
bankrupt. First, figure out what makes your business unique: what it offers,
why people need your product or service, and why consumers should choose
your company over any other. This is called your "unique selling
proposition." Use all or part of it to create taglines, logos, marketing
messages, etc. that will enable you to advertise through websites, social
media, newspapers, fliers, etc. Then do a little research to estimate how
much these types of advertising might cost so that you can budget for them.
Hire smart. If your business will need one or more employees other
than yourself (this is especially likely if you're starting a service
business), be aware that how and whom you hire will affect how successful
your business is. Before you even think about placing your first employment
ads, get familiar with federal, state, and local labor laws (these cover
areas like hiring discrimination, child labor, independent contractors,
immigration law, and more). Don't worry; you don't need to navigate these
areas on your own. If you become a member of the National Federation of
Independent Business (NFIB), you'll have free access to its labor law
hotline. You can also consult with an attorney.
Once you're familiar with all applicable hiring laws, it's time to get the
ball rolling. I recommend making sure that you can get the labor you need
before you officially open your doors by running test ads. If you don't get
five applicants within three days, you might want to rethink which field
you're going into, because you want a business that is effortless to hire
for. At this stage, if you like, you can hire respondents as subcontractors
(not official employees) who work when you have jobs for them-after
thoroughly vetting them, of course. Once your business becomes more popular,
you can consider hiring your subcontractors full-time.
When you do reach the full-time hiring stage, be sure to look for talented,
smart, experienced, and competent people with integrity. Don't automatically
hire friends and family members because it's convenient! Remember,
experience, competence, and commitment are invaluable assets.
Buy some online real estate. Many would-be small business owners
(especially those who plan to do all of their business locally) figure that
traditional print or radio advertising will be enough to spread the word
about their companies. That's archaic thinking. Since most of your
prospective customers-even those born during the heyday of newspaper and
radio-are surfing the Internet, websites are no longer optional.
Developing an online presence is as essential as having a business card. At
minimum, you need a homepage that functions as a business storefront,
conveying your unique selling proposition, pricing, and contact
information-though sections for customer testimonials, employee bios, and
photos don't hurt! Check out the competition's websites to see what works
and what doesn't. If you can't afford to hire a website designer, check into
the growing number of DIY systems that allow you to plug your specific
information into cheap built-in templates.
Focus on providing great service. After your business opens its
doors, it will develop a reputation. Whether it's a good or bad one is
largely up to you. To make sure that customers hold your company in high
esteem, focus on providing great service to each and every customer from day
one. Word of mouth is important for the growth of any business and providing
those little extra touches will get people talking about you in a positive
Let's use a lawn mowing company as an example. To show that you do the
little things that big companies won't, you decide your employees will pick
weeds out of flowerbeds for no extra charge. In this scenario, I would
recommend giving employees a postcard printed with two boxes (labeled "lawn
mowed" and "flowerbeds weeded") for each visit. At the end of the job,
employees check each box and leave the card with the customer. Not only does
this make sure your employee does the work-it also shows the customer how
important this "extra" weeding service is to you.
Another aspect of providing great service is putting quality control
measures in place. In other words, make sure your customers get what they
pay for. Be prepared to listen to the occasional complaint and to rectify
the problem. It's also a good idea to periodically survey customers to make
sure that they're satisfied with the goods or services you're providing and
to see if they have any ideas for how you can improve.
Use your time wisely. Good time management is an important skill for
any entrepreneur to have, but it's especially crucial for retirees who don't
want to go back to a full-time work schedule. If you aren't purposeful and
efficient, your responsibilities will bleed over the 20 hours a week you've
allocated to run your business...and soon your business will be running your
Whenever possible, I recommend planning each day the night before. Write
down all of the things-family and business related-that you'd like to do the
next day. Then, mark each one with an A, B, or C. As are tasks that must be
done. Bs should be done, and Cs would be nice to get around to. This system
will help ensure that you're spending your time on high-value activities
instead of reactively chasing every shiny ball that rolls by.
While these rules don't cover every step of creating your own business as a
retiree, they will help you to head in the right direction. So stop
procrastinating. If you have a good idea for a business, want to stay busy,
or want to start earning more money, there's no time like the present to
begin Round Two of your professional life. Odds are, you'll wonder why you
didn't retire sooner!
About the Author:
Sean C. Castrina offers a two-day seminar in Charlottesville four times per
year that will take an aspiring entrepreneur from dreaming to leaving with a
business ready to run. His staff qualifies potential service businesses in
your area that offer the most profit and lack competition. See
for more information.