Life expectancies are increasing so retirement years extend. This makes many retired seniors think about opening a business. That is definitely not something unheard of since around 15% of those that are 55 or older are now expected to start a new business in the US. You can obtain pretty good annuity rates from top rated annuity companies and you get access to savings so why not open a business? If you do want to do this though, you want to prepare yourself for the potential pitfalls, with the following being the really common ones.
Misaligning Goals With Lifestyle Habits
The retirement entrepreneur often decides to open the business because of being bored. After some time the individual ends up realizing that they would rather do something else. By the time you figure out the fact you want to do something else it may be a little too late as much time, energy and capital were already invested in the business.
Remember the fact that when you run a business the entire process will be challenging. When you really want to spend more time with the family, it is a huge disservice to launch a new business since you would most likely end up working much harder than expected.
Evaluate all the goals that you have at the moment in relation with your life and the business you may want to open. This will help you to see if they align in any possible way. When so, your approach becomes much more balanced and life would be better.
Too Much Risk
After a proper assessment was done in regards to goals and your conclusion was that you want to start a new business, you want to actively understand risks. Businesses do mean that startup capital is necessary and financial pressure tends to be high. A huge mistake is to fund businesses with retirement savings since if the business will fail, you end up without money. Rebuilding savings after you are retired is really difficult.
Not Enough Physical Stamina
Running and even starting the business will be a feat for the entrepreneur. When health issues appear, you want to be completely honest with yourself and decide if it is a good idea to open the business. Think about the energy and time that can be devoted to the entire operation. Failure risk will further impact health so this needs to be absolutely taken into account. A highly successful business will be demanding, especially when looking at startup phase.
Too Much Optimism
Time will not be an ally when you are older as an entrepreneur. There are not many years that will be available to fix possible mistakes. Mistakes are going to happen so you need to be careful that you do not make really serious ones. If you are way too optimistic you open the doors to failure since you do not have all the time that the younger entrepreneur has. What is important is to always understand and accept that success will not be guaranteed. This is the type of approach that the retirement entrepreneur needs to have.