Starting a business can fill fill retirement income gaps

Thanks to extensive awareness created by government and those in the financial services industry, seniors are now more aware than ever that they need to have enough funds to carry them through retirement. The previous figure of an estimated 70 percent of pre-retirement income has been adjusted to a higher and more accurate 80 percent. This is to ensure that the average American, who is expected to retire at the age of 63, can live comfortably for the next 18 years.

Unfortunately, many won’t meet this target and will run the risk of running out of money should they retire sooner or live longer. Instead of searching for jobs that will hire senior citizens, a great option for those who didn’t save enough during their work life is to start a business to fund retirement. Here are a few tips to ensure your senior-citizen business idea ends up being a good investment:

Make use of good resources.

Before investing time and money into a concept, it’s important to consider the things that will form a good foundation for the business. This includes:

• Creating a business that will allow you to maintain your lifestyle. For instance, if you have a hard time moving around, having a business that requires travel may cause frustration. Another thing to consider is that the business may require additional cash flow from time to time, but shouldn’t affect your standard of living in retirement.

• Tap into the right market. It will be difficult to sell a snowsuit in a tropical coastal town. Therefore, proper research needs to be done. This would include a feasibility study for those who wish to start up a whole new concept. Once the feasibility study is complete, do the business plan. This not only allows you to gain insight into what you’re getting yourself into, but also provides a blueprint for your business. It will also allow you to set up a suitable timeframe for breakeven to take place. After this, the business will need to generate a profit to ensure you don’t have to tap into your personal retirement reserves.

• Form a strong tribe. The word “tribe” might be millennialspeak, but it’s important that small business owners surround themselves with people who will add value to your business. For instance, business coaches, mentors, a network of business owners, the right accountant and attorney, and great staff.

Make use of modern business techniques.

There is no reason seniors only need to rely on traditional methods to give their businesses a boost. For instance, staffing issues can easily be resolved by hiring freelancers to get the job done. This works well for short-term or one-off projects. Another aspect to consider is that remote workers may also add value if the business environment can make use of it.

Modern funding options will also provide seniors with the option to boost their business without relying on traditional funding routes, such as taking out costly loans. Crowdfunding platforms such as Kickstarter, Indiegogo, and GoFundMe are one option for a cash injection into the business. Another funding option for your retiree business is the many online business loans options.

Seniors should also allow their passion to dictate the terms of their business. Although starting a business is hard work, it shouldn’t feel like it, and that is what passion for the business achieves. Passion for a business will allow seniors and retirees to enjoy that extra cash inflow and the opportunity to remain an active member of society without feeling that they’ve worked a day in their retirement life.

So, what are you waiting for? Now’s the time to start the business you dreamed of your entire life while working for someone else.

Melissa Clark, who wrote this article, works in marketing and customer relationship management for Incfile, a company that advises new entrepreneurs and small-business owners. This article was originally published on the Incfile blog.