In the previous blog we discussed the benefits of becoming self-employed during semi-retirement. Taking this step suits some people more than others.
For instance, you probably shouldn’t set up your own business if just thinking about it makes your head hurt. No doubt, countless hours will need to be spent working out how to run the business, set up new bank accounts, get clients and so on. If this doesn’t sound appealing to you, it’s probably best not to take this road.
However, if running your own business sounds like something you’d like to try, including all the administrative work that comes with it, or you want to challenge yourself – and won’t be relying on the business alone to generate your income – then it could be for you.
Setting up your own business can benefit those who are experts in the field and can offer lots of knowledge and expertise to others. The more expertise and knowledge you have, the more opportunity there is to make money. Chances are, if you are looking to set up your own business in semi-retirement, you have already been in an industry for 30-40 years, making you more valuable than somebody who has just started out – meaning you can charge more, too. And this expertise is a huge asset to your business in terms of human capital (rather than financial capital).
Another good reason to start is if you know your business will have low setup costs. Spending a lot on overheads is not a great idea right before you retire – but if you are able to work from anywhere, and with low running costs, you are in an ideal situation. And working from home means flexible working hours – a bonus in semi-retirement.
If you have a partner who is still working full time, giving you the ability to work part time hours, you are a good candidate for starting your own business, too. This will mean less pressure on you financially. Or, if you have reached the amount of super you need to retire and are not trying to earn money to add to it, that also gives you a good opportunity to try and set up a business. But doing it purely for financial reasons is not the best because you'll end up having to work much longer to meet your super goal.
Just to be clear: we’re not suggesting setting up a business in an entirely different field. If you’ve been a lawyer your whole working life, don’t set up a cafe if you’ve never worked in the hospitality industry. That could be a recipe for disaster. We’re talking about working in the area you have experience in.
If you think starting your own business in semi-retirement is for you, keep an eye out for Part 3 of this instalment, which will be focused on how to go about setting it all up.
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Dallas Davison, Michael Hogue and Ali Hogue.