Start A Second Career

Some retirees may work for their old companies while others find a new job or even begin a second career once they realize their experience qualifies them for a variety of positions.

If you’re really adventurous, you may want to start your own business. But, keep in mind this is riskier than any of the above work options and may consume a lot of time and money. Unfortunately, there are too many stories of retirees blowing an entire nest egg on a doomed business venture. You need to have money specifically set aside for such a business venture or a means of getting backers so that you do not need to tap into your nest egg to get a new business off the ground.

I might add that many people want to go down the franchise road. All you need to do is pass a crowded McDonald’s or Denny’s and you can see the potential success of a franchise. However, it is a lot of work to make a franchise successful, and you typically need to own several to really make money. In many cases, your success is only as good as your location. In addition, large franchises are usually tightly controlled by the parent company, taking away much of the “joy” of being your own boss—which is why many people buy into the franchise concept in the first place.

Another client of ours was asked to get involved in a restaurant. Someone else would run it, but he would put up $50,000 of capital and be a restaurant owner. While this is romantic idea, the reality is that a restaurant is a major risk and very hard work. To be successful, an owner needs to be there all of the time and stay on top the investment. Like any cash business, a restaurant requires constant attention. It’s a tough business and certainly a major risk for someone who either doesn’t have experience in the field or doesn’t want to spend endless hours working. Ask yourself these key questions before you start a new business venture:

• What sort of business would I start?
• Do I have the necessary resources or funding?
• How much time would I need to devote to the business to make it as successful as I’d like?
• How hard do I really want to work?
• What would be the key ingredients of a viable business plan?
• Is my idea for a business something that would attract consumers in the current market?
• What kind of competition would I be up against?
• What experts can give me an honest assessment of my business plan? My attorney? My accountant?
• Can I feel comfortable as the captain of a small, fragile ship?
• Do I have the patience to watch as a company grows or possibly struggles to grow?

Before starting a business, do plenty of research. It’s one thing to have a great idea but another to have a marketable business idea that will bring in money. Put together a business plan that outlines exactly what type of business you are planning to start and provides you with a blueprint to determine whether it is viable. A business plan will also help you attract potential investors. You will also want to explore various means of protecting your retirement assets. You do not want to lose major sums of money while investing in a risky business venture, nor do you want to be liable for a business that either does not succeed or is sued. No matter how passionate you are about starting a business, talk with a legal advisor and your accountant to find the best way to separate the business from your personal savings.