Victoria Heckstall — March 30, 2018 There’s nothing worse than retiring from a job but you don’t want to sit in a chair and watch Wheel of Fortune all day. More and more retirees are continuing to work even after retirement.
And many of them are starting small businesses from home.
If you’re the sort of person who wants to launch a small business so you can keep working, pad your income, and continue to enjoy an active life this is the guide for you.
Here’s how you can get started on your journey to business success.
Decide What You Want to Do
Ignore all the technicalities of starting a small business for now. Think about what you want to do and what you’re good at. Ultimately, a small business is about your big personality, rather than the technical things new entrepreneurs tend to get bogged down with.
Are you someone who wants to start a small business selling products online? If so, what sort of products do you want to sell?
Do you want to run a consulting business? If so, what are you qualified to consult on?
These are the questions you need to answer. Rack your brains and come up with that big idea.
What is Your Target Market?
A great idea doesn’t automatically translate to a business that works. Sometimes there’s no target market because you’re ahead of the times. The market may also be too saturated for you to have a chance of making an impact.
You also must decide if you’re marketing to a local market, a national market, or an international market.
But by the time you get through this step you should have the following information about your target customer:
- How old are they?
- What gender are they?
- Where do they live?
- What sort of income do they have?
- What do they like/dislike?
Of course, these are generalizations, but everyone from the mom and pop business to the huge corporation identifies their target market in the same way.
What Type of Business is Best for You?
There are lots of different types of business structure you can decide on. Your decision will largely rest on where you want your business to go, the presence of any partners, and your tax affairs.
We recommend talking to a qualified accountant and business lawyer, so you can get specific advice on the best decision for you.
But there are three main types of business structure you’ll be looking at:
- Sole proprietorship. This is the most basic type of business and it’s a good starting point for small operations.
- C-Corporation. This is the standard type of corporation and is often unnecessary for the smallest of businesses, due to the double tax rules on income.
- S-Corporation. The best of both worlds. It comes without corporate formalities and double taxation, but you have liability protection.
This is a complex subject and you should give it some serious thought before making your business official.
Do You Want a Partner?
It’s possible to have partners in any type of business. Partners can be incredibly valuable in both knowledge and emotional support. However, the tradeoff is that you must share the profits.
If you have a partner in mind, consider whether that tradeoff is right for you and whether you’re the sort of person who can work with a business partner in the long term.
Where to Spend and Where to Save?
The big decision you have to make during the early stages of your business is where to spend and where to save. Your choices at this juncture will determine whether your business lives or dies.
These days it’s possible to start a business on a shoestring budget. The principle here is to cut anything that isn’t entirely necessary to creating revenue.
Some examples of things that are necessary include are the materials to create your product, the budget to build and own your own website, and the money to manage your logistics.
Some examples of things that aren’t necessarily included are: customized websites, your own office space, and employees.
That doesn’t mean you can’t have these things later, but when you’re starting your small business you must prioritize.
The Essence of Scaling
Not every business idea is going to work. You may discover that your first idea just doesn’t work for whatever reason. But you can limit your losses by starting in an extremely small way.
Limit the number of products and services you offer. Try to market just one thing through word of mouth or through basic social media advertising.
The biggest mistake entrepreneurs make is they attempt to move too quickly, and they stretch themselves. Start small and if it goes wrong you haven’t lost anything but time.
Where Should You Get the Money From?
Retirees are always going to struggle to get business loans because of their age. Most of the options are closed off for this reason alone.
We recommend self-funding your business. Avoid borrowing money because this can quickly lead to bankruptcy or taking steps like drawing equity out of your home. This is a slippery slope to move down.
But should you be using your pension or equity to fund any part of your business?
The answer is no. Retirees won’t get the opportunity to get that money back. Anything that supports your lifestyle should be off limits.
Therefore, you should start in the smallest possible way, so you don’t find yourself in this situation.
Last Word – The Principles of Running a Small Business
These are the principles of running a small business.
Naturally, there’s a lot more to know about establishing an online presence and getting into things like social media, but they differ depending on the type of business.
Master these principles and you’ll surely succeed in starting your next business venture.
Do you have any ideas in mind for your small business?
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