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Another way to work

By Jennie L. Phipps ·
Monday, April 11, 2011
Posted: 3 pm ET

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 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.

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David Goldbaum
April 12, 2011 at 12:11 pm

You raise some good points JD. Taking on turning around a troubled business or even starting a business from scratch can be challenging for a retiree. These are some of the reasons we focus our practice on high quality franchise businesses. It's a good "middle road". If it's a good business you get the training and business model to manage effectively. Some franchise businesses even start with a positive cash flow on day one!

But certainly, business ownership, at any age, simply isn't for everyone. It depends on your goals, skills, temperament and interests.

David Goldbaum (

April 11, 2011 at 6:13 pm

Open a business after you are retired? Sounds like a prison sentence to me. Through a buyer's default, I have had to open and run a small country store/gas station. (I was told I had to get the business up and running if I wanted to resell it at more than a fire sale price.) What a horrific year and a half it has been. I wouldn't wish it on anyone.

The paperwork is never ending. Every day there are bills to pay and transactions to get into an accounting program. Paying taxes and payroll is a pain and all it takes is one employee filing an unemployment claim for a series of appointments and filings with the state. I have stacks waiting to be processed, letters waiting to be written, and stacks waiting to be filed.

Employees are probably the biggest headache. Although my employees are well paid, the nature of the work seems to ensure a revolving door of barely educated employees. Another store owner told me that he does not take vacations because his employees would rob him blind (the number one reason for shortages in retail--second is vendor theft, and last is customer theft). I refuse to be held hostage and have become an absentee owner (I do trust my manager, but you don't find out something is missing until long after the fact--if ever). I've had two employees simply stop coming to work--they didn't feel like working that day, so decided to quit. My manager has routine work-ethic meetings. Better her, than me.

In addition to this business, we have rental properties and have turned those over to a property manager. My advice would be to manage the business you are interested in first. Owning your own business is in no way a panacea. You better have deep pockets and lots of time to devote solely to the one pursuit. I'd much rather be the greeter at Walmart or BJs (and I have a masters degree). (and by the way, having the "business basics" in place is the tip of an iceberg in owning a business--it's the day-to-day requirements that will kill you.)