How to Create a New Business at Retirement Time

After retiring at 55 from a 32-year publishing career, Ric Cox could have easily settled into a leisurely retirement. Instead, he went right back to work brainstorming a new business venture.

Today, Cox, 64, owns and operates ChicagoCondosOnline.com. It’s a subscription-based Internet service that provides comprehensive information to Multiple Listing Services, brokerages and lenders on more than 4,200 condominiums. His inspiration? “I had bought nine condos and wanted to remove the pain from the process and make money doing so,” he says. “I didn’t just find a need, I felt it.”

Nearly half of the United States’ small-business owners are older than 50, according to the U.S. Small Business Administration. And persons 55 through 64 are most likely to start a business, according to a study by the Ewing Marion Kauffman Foundation.

Launching your own startup later in life can be risky because there’s less time to rebound if something goes awry. But it also can be rewarding. “There are many people who never had full job satisfaction, so this allows you to take a postponed dream or idea and pursue it now,” says Jeri Sedlar, co-author of Don’t Retire, REWIRE.

Here’s what you need to know to become a successful retiree-entrepreneur.

Plan your work. Allow yourself ample time to plan before opening your doors so you can finesse any kinks in your business plan. Although Cox conceived the idea for ChicagoCondosOnline.com right after retirement, he waited six years to launch the website. In the years leading up to the debut, he took an entrepreneurship course and crafted a business plan, carefully researched his business concept as well as the market, incorporated his company (Condominium Enterprises, Inc.), gathered content for the site and eventually built it.

Weigh the financial risk. To keep your nest egg intact, steer clear of ventures with high start-up costs, advises Stan Spector, author of The Baby Boomers’ Official Guide to Retirement Income. “I try to get seniors to consider businesses they can start on a shoestring for less than $5,000,” says Spector, who sells part-time and seasonal businesses to retirees. After all, he adds, you can always invest more time and money once the business shows signs of success. Also avoid locking yourself into long-term leases for space or equipment.

And remember: If you’re under 65 and not able to get health insurance under a spouse’s employer, you’ll want to factor in the cost of health insurance.

Be patient. Know that it may take longer than anticipated before profits start flowing in. Cox invested about one-fourth of his savings into his business and finally saw his first cash-flow profit in 2008, three years after his start-up. “Most people, as I did, underestimate the time and money needed to succeed,” he says.

Go professional. Assemble a sounding board with a core group of experienced professionals, such as your accountant, banker and lawyer, Sedlar recommends, so you can bounce your ideas off others and pick their brains. “You want people who will challenge your thought process so that you see more possibilities, or so you see that you need to go back to the drawing board,” Sedlar says.

Get connected. If you haven’t already, get acquainted with social media sites such as Facebook, LinkedIn and Twitter, which allow you to connect with clients and prospects of all ages. “Having a diversified age cohort of friends keeps the 50+ person ‘up’ on the latest technology and thinking, and is vital to keeping entrepreneurs in the game,” Sedlar says.

Form an exit strategy—today. Have an exit strategy in place when retirement No. 2 rolls around. “You need to know where you are going, or at least want to go, before you start,” says Cox, who eventually plans to sell his business and its content to a major local or national content provider.

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