Starting a business in retirement has lots of advantages from an income as well as a tax standpoint.
One of the options worth considering is buying a franchise because you don't have to start from scratch. The business basics are already in place.
A franchise broker like David Goldbaum of Franchise-Economics.com makes his living selling franchises. He says an increasing number of his clients are retirees or people about to retire.
Goldbaum recommends that someone mulling the purchase of a franchise as part of their retirement planning consider a home-based franchise because most of these don't require a large upfront investment and many can be managed by one person working part time.
These kinds of businesses are among those that have lots of opportunity for these kinds of entrepreneurs:
- Specialized repair or maintenance franchises: everything from various kinds of repair and maintenance services to fine furniture restoration or maid services. These are particularly suited to "hands-on" types and those who can manage other people with technical skills.
- Advertising franchises: direct mail, internet-based or both -- good for the ex-marketing exec.
- Education franchises: provide tutorial services to adults and children -- particularly suitable for the ex-teacher.
- Pet-related: dog training, sitting, owner training, dog grooming -- ideal for the pet lover.
- Health care-related: services that cater to helping the elderly and disabled stay in their homes rather than go to a facility -- good for those with health or business backgrounds.
To get started, Goldbaum says entrepreneurs need a minimum of $35,000 in cash and at least $150,000 to $200,000 in savings, some of which will be required to get the business off the ground and some will be needed to prove creditworthiness.
Having previous business experience is a big help. "People who are most likely to succeed can communicate well, are willing to market their business, and know enough about business basics to handle things like payroll," Goldbaum says.
How much money will you earn? It depends on the business and how much effort you put into it, but Goldbaum says he has several former clients who are making more than $100,000 annually, including a grandmother who has consistently earned that much with a grout repair franchise.
Working hard may not be everybody's idea of a good way to retire, but it beats running out of money, and the income and the flexibility of business ownership can be a big advantage over working for someone else.