Never too late to start business
But there are things to keep in mind
Dear Money Lady,
I have been thinking about starting my own business. I am still working full time and in my 60s. Do you think that is a good idea or is it too late in life?
Thanks,
Jamie
Dear Jamie,
No, I don’t think you are too old.
Many people start a homebased business to further a hobby or to continue working while in retirement. Lifelong workers who always earned a wage during their careers may want to reap the benefits of self-employment as they enter retirement.
There are indeed a lot of benefits. Being your own boss, having a flexible schedule and doing something you love are all reasons why many Canadians 55-plus, especially after
COVID, are considering an employment change.
But we must not forget the phrase “the self-employed person works 16 hours a day for himself rather than eight hours a day for someone else.” Working for yourself will demand more of your time and effort, as well as the dreaded startup costs, than with a conventional job. Plus, don’t forget, the success or failure of your new venture ultimately lies on your shoulders.
Raising capital to start a business, especially later in life, is always a bit tricky.
Here are some of the questions you need to ask yourself:
• How much of your savings will you need to invest?
• Can you get a loan from your bank or can you use the equity in your home to secure a business line of credit?
• If you are funding the startup from your retirement savings, how will this affect your future plans?
Once you have determined your financial plan for your business, it is a good idea to work out a detailed business plan.
Here are some of the things you want to consider:
• Marketing and societal impact plan
• Sales strategies
• Industry overview and competition
• Plan of operation, product and services
• Strategy for growth and future
financial concerns
The type of business will depend on whether you want to run it by yourself or with others.
There are three basic business structures:
• Sole proprietorship: This is a non-incorporated business entirely owned by one person.
• Partnership: This is also a non-incorporated business; however, two or more people contribute.
• Corporation: This is very different from the other two styles, with more detailed legal and tax considerations. A corporation is a separate legal entity, and the owners own shares in the company.
Having your own business can be very rewarding and well worth the time, effort and money invested. But don’t forget that starting a new business venture close to or in retirement could be risky. Make sure you do your homework since you have very little
room for mistakes. It is often impossible for someone to recover from a bad investment choice once in retirement.
Good luck and best wishes.