One of the first questions on the mind of anyone starting a business after retirement is how to succeed. Some years ago, it was uncommon to see retired people who create successful businesses. We used to think that it was rocket science to start a successful business after retirement. Some people don’t even bother to start because they are afraid of losing money.
However, that is not the case in recent times. What we now see is that people leave long-term employment and go on to start profitable businesses. So, what is the secret?
I recently spoke to some retired people who operate profitable businesses. The conversation I had with them included questions on how and when they started their business. From the answers they gave, I put together these five tips on how you can succeed in your retirement business.
Table of Content.
- Start preparing for retirement early.
- Start your business on a small scale.
- Invest in learning about your business.
- Start with your own money.
- Build networks in your new industry
Start preparing for retirement early
Most people don’t start preparing for retirement until 3 or 4 years before they leave service. In some extreme cases, some people wait until they leave service before planning their retirement. These last-minute approaches are not the best thing to do if you have to make a significant decision like starting a retirement business.
Furthermore, if you choose this approach, you will be under pressure because you need a source of income to replace your salary when you retire. You will also make fundamental mistakes that can cost you money.
So, when should you start planning to start your business? Well, the best time to start planning for retirement is the day you start your job. After all, nobody plans to die on the job.
If you missed that timeline, the next best time to start planning is today. No matter how many years you have left in paid employment, it is not too early to plan your business. You may even start it as a side hustle if you can supervise it.
Start your business on a small scale
The best way to start your retirement business is on a small scale. This is because you have never operated a full-time business before. Even if you were running the company as a side-hustle, investing all your savings or gratuity in the company is not a good idea.
Secondly, you probably do not understand how to operate that type of business. Each industry has its own written and unwritten rules. Therefore, you should have a good knowledge of the rules of your industry before you invest all your savings.
In some cases, some people take loans to start their business so that they can look like a big boss when they retire. Unfortunately, they might end up losing the business. Therefore, it is risky to start a retirement business on a large scale. The best way to start your business is to invest a part of your savings. When you have gained some experience in the industry, you can then increase your investment.
You should also avoid setting up a business that you cannot supervise while you are in service. It is so easy to lose money if you leave the running of the company to other people. They will think that you have enough money to waste, and they will likely mismanage the business. Moreover, apart from losing your investment in the company, you do not gain experience from operating the business.
Invest in learning about your business.
If you want to succeed in business, you should never stop learning. There are many skills you have to learn to succeed in your business. These skills include communication, negotiation, leadership, and creativity. The second set of skills you must learn are: how to identify a business idea and write a business plan. It would also help if you learned how to keep financial records and market your products or service.
The third skill set important for success in a small business is a technical skill. This skill is specific to the type of business you start. Some examples of technical skills are cooking, baking, driving, using a computer, consulting teaching and farming.
You must learn a skill as a small business owner. Simply because small business owners sell how well they do something. You do not have to be the one doing the manual work. However, if you understand the technical skill, it can help you in two ways. Firstly, you will be able to satisfy your customers with high-quality products and services. Secondly, you will be able to supervise your staff.
Start with your own money.
Starting with a business with your own money seems like an obvious thing to do. However, a lot of retired people are tempted to take a loan to start their businesses. One of the ways they are attracted is that they have lands or houses that banks require as security for a loan.
Several things can happen if you choose to use a loan to start your business. Firstly, you will be under pressure to repay the loan, especially if you do not have enough customers. Secondly, you stand the risk of losing your properties if you cannot repay the loan.
Recommended Reading: Top 3 reasons why you should not start your retirement business in Nigeria with a loan.
Build networks in your new industry.
As a new business owner, you need a lot of help. The help can be information on where to get technical assistance, training, or finance. One of the best ways to get this information is from other business owners in the same industry. You can meet other business owners through business associations in your industry.
However, this does not mean that you should abandon your former network. On the contrary, your former colleagues can also help you, especially if you want to start a consulting business.
Conclusion
If you choose to start a business when you retire, you should take some steps that will help you succeed. Unfortunately, what most people do when they retire is to carry on as if they are still in paid employment. They start a business on a large scale and wait to do things at the last minute. This is a recipe for failure in business.
My advice to you is for you to start planning your business several years before you retire. You should also invest in learning about the technical aspect of your business.
Another thing you should think about is the money you need to start your business. You should develop the practice of saving part of your income. The money in your savings account can serve as startup capital if you do not get your retirement benefit on time.
I wish you the best as you plan to start your business.
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