The 1 Question to Help You Know What Type of Business to Start in Retirement

You’re looking to start a business in retirement, but you’re not sure what type of business makes sense for you.

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There are so many different types of businesses you can start these days. Where do you even begin?

There’s one key question you must ask yourself when deciding what type of business to pursue, and if you don’t, you’ll end up wasting your time and money.

To help you get more clarity about this, I sought out a retirement coach who specializes in assisting professionals and executives as they make retirement transitions with the life side of retirement planning. His name is Kevin Lyles of Winning Retirement Coach; he's also the head of education for Rock Retirement Club.

I asked him, “If a client was to say to you they’re thinking of starting a business in retirement, what’s the first question you would ask them?”

“What do they want to get out of the business?” responded Lyles. “That will lead to how I could counsel them because there are many possible answers.”

Before getting into some of the answers Lyles shared with me, let’s dive into why this question is important.

Up until this stage of your life, the work and career part has been mostly out of necessity. It’s commanded a large part of your time over the years because there are these bills and taxes we all must pay.

As you enter this next stage, the work and career part plays a completely different role. You now have more free time and you’re not as reliant on it as your main source of income each month.

This means the type of business you choose to pursue needs to align with the greater vision of how you now want to spend your time.

That vision completely shifts the thinking about the type of business you start and why that question becomes so much more important to get clear on.

Previously, work and career dictated how you spent your time, now you have more control over it. So, let’s get clear on what you want to get out of your business to make sure it aligns with your vision.

Lyles shared five common answers to “what do you want to get out of your business?” with me. Let’s dive deeper into each of them:

1. I need the income. If you’re retired and need to replace your income to continue living, you might consider continuing to work or seeking other employment.

Let’s be real. Starting a business is not easy and it’s not going to be instantly successful overnight. It’s going to take time to start producing income, if it ever does.

So, if you need the business to replace income dollar for dollar, take other options into consideration.

Though if you’re within a few years of retirement and think you’ll need to replace the income, now might be a good time to start. That way you can build up the business without the pressure of instant success.

2. Extra spending money. Your financial retirement plan might be rock solid and your financial needs are met with your pension, 401(k) and/or savings.

What you might want to get out of your business might be extra play money.

Each year you want to take you and your entire family on a vacation. Or there’s a charity you’re passionate about and want to donate to it. Maybe there’s a lavish purchase you want to make for you or a loved one.

Starting a business can help to reach that goal.

3. Build a legacy for your children. That can mean many things. It might mean building a business to hand down to your kids. Possibly, it’s building more wealth to hand down to future generations.

Or the legacy could be leading by example and showing your family that anything is possible at any age.

Leaving a legacy such as these might be what you want to get out of your business.

4. Solving problems for others. It’s common for people to start a business around something they’re good at and where they can help others.

“That was something I liked to do,” said Lyles. “During my legal career, I was working mostly for corporate clients, but I really liked helping them with their problems. So this way (through coaching), I can do it on a much more personal level to really help counsel people through their retirement transition.”

5. Purpose and meaning. Since work has taken up so much of our time during our life, there will now be the large void of time.

“That’s a problem a lot of retirees face after working,” said Lyles. “If they’ve been working ten- to twelve-hour days for thirty to forty years, now they wake up and don’t know what to do with themselves. Having a business can really fill that void and give them some purpose and reason to get up in the morning.”

Those are just some of the answers to help you get some clarity and start thinking.

Once you know what you’re looking to get out of your business, you can now focus on the details around the structure and opportunities that support your vision.

(This article originally appeared on RetirementRedefinition.com.)

(This article is part of America’s Entrepreneurs, a Next Avenue initiative made possible by the Richard M. Schulze Family Foundation and EIX, the Entrepreneur and Innovation Exchange.)