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Entrepreneurship is the new “dream job” for older adults in the US, even after retirement. A recent survey by The UPS Store found that 54% of Americans would rather start a small business than retire, and the share of new entrepreneurs in the 55-65 cohort has grown faster than among 25-35-year-olds.
Working in retirement is not a new phenomenon. Some retirees and older adults have always chosen to continue working past traditional retirement age, whether it’s a few hours a week at a part-time job, solo consulting work, or other ways to stay active and earn extra income. But for this new generation of retirees and older adults approaching retirement age, entrepreneurship during retirement can be a great way to take on a fun new challenge while making money with flexible hours, on your own terms.
Today’s generation of retired entrepreneurs are often called “grassroots” or “second act” entrepreneurs because they are returning to the workforce for one more appearance. Being a retired entrepreneur can offer special satisfaction and financial rewards. Running an online business, such as an e-commerce store, Fulfillment by Amazon (FBA) business, blog, mobile app, or other digital asset, has become a popular new strategy for entrepreneurship in retirement.
But as a retired online business entrepreneur, there’s no need to reinvent the wheel or start from scratch. If you want to get your foot in the door with online business ownership, more retirees should consider buying an online business. Just as some entrepreneurs may want to buy a franchise or buy an existing business that already has a proven brand and strong foot traffic, buying an online business can be a profitable way for “encore entrepreneurs” to have a successful second act in retirement.
When I talk to entrepreneurs and investors around the world, we see a lot of interest in this space from older adults. In the past year, as I’ve attended industry conferences and held meetings in cities around the world, about 75% of the people in the audience are 55-65 or older. It is clear that this age group is interested in learning more about online entrepreneurship. They see how buying an online business or digital asset could be a smart investment.
Here are some of the important reasons why online businesses and retired entrepreneurs are a natural fit and why buying an online business could be the right strategy for your goals.
Related: Want to retire early? Do this one thing.
1. Get the lifestyle you want and the income you need
Why do older people often decide to work in retirement? Because they want to earn extra income flexibly, without the all-consuming schedules and expectations of a full-time job. Buying an online business is well suited for these goals.
If you want to make extra money on your own terms, running an online business can give you the return on investment you need, with flexible hours and the ability to work from anywhere. Whether you want to travel in retirement, split your time between vacation homes, or spend more time with grandchildren or other loved ones, running an online business can give you the freedom to be a digital nomad, not tied down to any one place.
Why buy an existing online business, instead of starting your own business from scratch? Because when you buy an online business, you get a built-in customer base, a well-known brand, and reliable income. You are getting a stronger foundation to build on. This is another reason why buying an online business can be a perfect choice for older adult entrepreneurs: it helps you avoid the long struggle of finding new customers and building a brand.
2. They are profitable investments of additional cash
Retirees sometimes have access to a lump sum of cash that they can use to invest in a new business. Whether it’s an early retirement package from your last job, proceeds from the sale of a home after downsizing, an inheritance from a loved one, or other windfall, retirees are (hopefully) at a stage in life where they have extra cash that can be put to good use.
There are a few ways to invest extra money. You can put it in a savings account, a CD, or a money market account and you’ll barely earn enough interest to keep up with inflation. You can buy an investment property, but real estate inventory in most U.S. cities is limited right now because of rising interest rates, or you can invest your cash in other asset classes, such as the stock and bond markets, which can be risky and go up or down for reasons beyond your control.
But what if you could put some extra cash into an online business and invest in your own skills, talents, experience and entrepreneurial energy? Buying an online business is a way to bet on yourself. Online businesses can provide steady monthly cash flow to boost retirement income as well as long-term asset price appreciation. And hopefully, with an online business you’re passionate about in a niche you know well, you can achieve a higher long-term ROI than other investment categories.
Related: 3 Tips for Buying an Online Business
3. They can be low risk
Buying an online business doesn’t have to cost a lot of money. You don’t need hundreds of thousands of dollars to buy an online business, and you don’t have to bet your entire life savings on a single business idea. Unlike buying a franchise where you have to be part of this bigger brand and follow their rules, running your own business online gives you the freedom to make your own decisions, try new things and follow your own intuition. Unlike buying a brick-and-mortar business like a restaurant or retail store, online businesses typically have limited overhead costs and large potential profit margins.
Choosing the right online business to buy depends on striking a balance between the amount of cash you want to invest up front and the amount of additional time/expertise and money you are prepared to invest in the business as you manage future growth.
For example, there are many online businesses (such as e-commerce stores, mobile apps, or content-based revenue-generating websites) that sell for as little as $5,000 to $10,000. If you’re willing to put in the effort to improve the performance of these businesses, with better content, increased customer retention, sharper SEO (search engine optimization), diversified traffic sources, and more accurate advertising, you could increase your monthly business revenue and recoup your initial investment within a few months to a year.
Not every online business is an instant money maker. Some online businesses require extra help and careful management to reach their potential. But overall, if you’re a recent retiree or soon-to-be retiree looking to earn extra income in retirement while keeping your business skills sharp, buying an online business might be the best strategy to get into the game. Buying a business online helps you save time and start selling to customers faster, without the growing pains of starting a new business.
