We all have an unexplored passion that could become a business, if only we had some extra time to devote to it. Here are some key things to consider if you’d like to use your golden years to explore this possibility.
Your passion becomes your product. Your passion may be photography, painting or another pursuit that has always been for fun. Beware that you may come to look at your passion differently when it becomes your work, especially if there’s a phase when things don’t go especially well. It’s important to be honest with yourself about the potential for your business and work equally hard at staying motivated.
Know the risks and challenges. Your business idea may be brilliant. But it’s also risky, so protect your retirement savings by keeping your start-up costs to a minimum and avoiding heavy debt. For example, don’t lease office space or hire employees until you absolutely have to. Early expenses eat into profits and make it difficult for a new business to survive.
Test the market. If your venture includes a new or different product or service, test the market before you make any rash decisions. Start with the most basic version of your idea and sell it economically — perhaps online — and gauge customer feedback to decide if your venture makes financial sense.
Keep it simple. Finance your business with money you can afford to lose. If you find yourself tempted to tap into your retirement account to fund it, take it as a warning that you’re probably about to get into something you’re not financially prepared for.
Do your research. Creating a retirement business from your passion could be the most satisfying life decision you ever make. But before diving in, make sure you have all the information on taxation, licensing, and all the other vital details you must master to run a successful business.
Contact an advisor for specific advice about your circumstances. More information is available from an Investors Group consultant.