Retirement Redesigned

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Wednesday, April 17, 2024

Retirement Redesigned

HomeMoneyEarning MoreStarting a small business in retirement

Starting a small business in retirement

Monday Deadline. The thrill of starting your own business is an enduring feature of preparation for retirement.

It is also a preoccupation of many that are settling into retirement and becoming aware of what it actually means. The drive for those who have the itch converges from several streams. It could be the delayed longing for independence, or the fear of not having enough money and not being able to “afford retirement”, or the creative excitement of starting something new; like a new name, a new business plan, a new risk, and a new surge of energy.

The piece published in Forbes and nominated as an “Editors Pick” in July last year summarizes the issue succinctly. “Forget Retirement — Baby Boomers are starting Small Businesses instead” The article says baby boomers, those born between 1946 and 1964, are not slowing down and in fact entrepreneurs over 50 make up more than half of America’s small business owners.

These figures should encourage older people in South Africa to venture into some or other new business territory. But there are a number of key issues that have to be dealt with first. Many stories do the rounds of people that take their retirement funds and blow them on a coffee shop or new B&B, not knowing anything about these alluring options other than that they seem appealing. One can add a raft of other business ideas that have sunken people with the best intentions, from game farming to “impossible to fail” franchises. So many people were made redundant from government jobs after 1994 and were given what looked like handsome pay-outs at the time. How many of those started new businesses and where are they now? A civil servant is an unlikely person to become and instant entrepreneur.

The first lesson any one of those that would care to tell the tale is; “don’t go into some business that you know nothing about” no matter how sexy it may sound. If it is to be a coffee shop or a B&B find one of these that is successful and make a deal to work there, if necessary, without compensation until you have learnt the basic lessons, and know some of the traps.

Rather than embarking on some new business enterprise, a better option still is to reconfigure your own skills and the experience you have built over the lifetime of your career and turn it into a consulting “product” or specialized service. Careers like Law, teaching, medicine, architecture, accountancy building construction, and the hundreds of others, all can be made into a self-employment vehicle away from the firm that employed you until retirement.

The trick then would be to start a business that can be evolved out of such a strategy e.g. a career in accountancy can be made into a financial management consulting business. Or a career in the practice of the Law could become a legal advisory business in corporate finance, or property development.

If this sounds too much like a full-time job, and not all retirees want that, remember that you can take as much of it as you want to as you are now independent and able to work on your own terms.

Inexperienced retirees are often lured into the franchise arena. Not saying that this is always a bad decision, but we only caution that those that offer the franchises are the ones that make the money and not so much those that pay to buy them.

Forbes again, published this year, “5 Leadership Traits every Boomer Entrepreneur should possess” The author Deborah Sweeney says they are;
•An understanding of how to be strategic and creative
• Enthusiasm
• A thick skin
• Willingness to take risks
• Focus
It is worth reading the article to get the full information she discusses.

Because retirees no longer have the aggressive drive to prove themselves or the impatience to get ahead, they are better at understanding and have the wisdom to exercise smarter judgement. They are also more understanding and willing to compromise.

The good news for those retiring is that Artificial Intelligence and the whole culture of machine learning which everyone says will lay off millions of people, including many professionals doing more or less routine jobs, is that the skills with the best survival rate in such a future will be what is now called “soft skills” The so-called soft skills refer to empathy and communication, critical thinking, creativity, Strategic thinking, technological management, installation and upkeep, imagination and vision; all attributes that the retiring population should be better at because of their deeper experience and their greater willingness to be accommodating.

These skills also play well in the building of a new business and having an understanding of what a market may be looking for.

In closing: find a coach or someone who has been successful in business to shepherd you into a new business. Cautious, more introverted people sometimes have difficulty discussing their ideas with others before they are good and ready. Our advice would be to do so right from the get-go.

Johann is the founding partner of Reset Retirement where we focus on assisting people with planning for the non-financial aspects of their lives after full-time work. He had a long career in executive search and leadership as the founding partner and chairman of Heidrick & Struggles in South Africa where he was the head of the company’s board practice.


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