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How to start up a business in retirement

Updated 15 February 2023

4min read

Nick Green
Financial Journalist

Could you join the ranks of the ‘silver startups’? You’re not keen to keep on working for The Man but not yet ready to hang up your iPad. Becoming your own boss in later life could be the ideal way to keep both your mind and your bank balance healthy. If you’re tempted, here’s how to give yourself the most realistic chance.

Traditional retirement is history. On the one hand, pension freedom gives us more flexibility in later life than ever before. On the other hand, it’s harder than ever to build up enough pension savings to see us comfortably to the Great Hereafter. And let’s face it, some of us just don’t like golf.

Retirement may be your last and best chance to fulfil your dream of running your own business. You still have your health and energy, you can call upon decades of experience and probably a ready network of contacts too, and you finally have time on your hands. You may also have a potentially large source of startup capital to hand, but – Warning Alarm! – we’ll cover that point in a minute.

The time to be your own boss may arrive even sooner than retirement. It’s a sad fact that it’s harder to find work as you approach retirement age, so if you find yourself unemployed in your late fifties or early sixties, you may struggle to find a new employer to take you on. Going into business yourself could end up being your only reasonable alternative.

Success in business is always a massive challenge, and as a ‘silver startup’ you’ll face some markedly different obstacles compared to a fresh-faced entrepreneur. You may be less naïve, but possibly also more set in your ways. Here are some starter tips to get you thinking on the right lines.

Play to your strengths

It’s your biggest advantage over the young whippersnappers: you’ve had a lifetime to find out what you’re good at, what you’re not good at, what you love and what you hate. So forget learning new tricks – focus on the ones you’ve mastered. Take that hobby or professional skill and find a way to use it profitably. Remember that many accountants are also business advisers – a meeting to discuss your plans could lay the foundations for your business model.

Leverage your assets

Sorry, a bit of business-speak there (but you might as well get used to it). That’s just a pinstriped way of saying, ‘Make the best use of what you have’. As a senior worker, you should by now have an impressive network of friends and former colleagues who might be able to give you ‘mate’s rates’ on everything from website building to product distribution. And even if you don’t have an IT director on speed-dial, you may still have an address book of influential people ready to spread the word about your business.

Recognise your weaknesses

By now you’re too mature for self-delusion. If you know you can’t draw, don’t try and design your own logo, for instance. The same goes for technology. Make a list of everything you’re good at and hire experts for everything else. It may mean spending a little more initially, but a bad job done for free is more expensive in the long run. Most of all, do get that accountant – you’ll really struggle without one.

Set yourself clear goals and time limits

It’s actually a doddle to set up a business – some people manage to keep it up for years on end… but never get any further. The hard part is finishing the set-up process and getting the business operational. Don’t drift and dabble: writing out a business plan with realistic targets and milestones, e.g. ‘Turn a profit within six months.’ Keep track of all targets and if you can’t hit them, find out why and adjust your plan accordingly.

Remember, small steps

The most common mistake seen on Dragon’s Den is the person who overvalues their business and tries to run before they can walk. What you’re looking for isn’t instant riches, but a lifestyle business that will bring you income in retirement. Anything more than that is a bonus. So focus first on making your idea work, not on making as much money as possible. Early days may involve trial and error and small margins, but as your experience grows you can start to work on that bottom line.

Secret weapons: the grandkids

Or the kids, depending on the family – the point is, the younger generation is always going to be more up to speed with developments in social media. So pick their brains, get them to tell you about the latest trends, make use of their skills (the average 12-year-old can throw together a YouTube advert in about 20 minutes) and ask them for their input generally. They might come up with nonsense – or a stroke of genius.

Don’t spend more than you can afford to lose

Pension freedom may have given you access to a stash of startup capital. Otherwise known as your retirement savings. Please do remember this – if you squander them and your business fails, no-one is going to replace them. So dip into your pension by all means, but make sure the amounts are manageable, and that it’s only luxury spending you’re sacrificing, not essentials. An accountant and a financial adviser can help you decide how much you can risk, and where to draw the line.

For more general ideas on starting a business, have a look at Six tips for the new entrepreneur.

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About the author
Nick Green is a financial journalist writing for Unbiased.co.uk, the site that has helped over 10 million people find financial, business and legal advice. Nick has been writing professionally on money and business topics for over 15 years, and has previously written for leading accountancy firms PKF and BDO.