A Plan for Your New Business in Retirement

To start a business, first, you need a business plan to clarify your vision and operations. It serves as a management tool to help you raise money, if required, to grow strategically and track your progress. Standard contents of your document typically include your goals, marketing strategy, target markets, competitor analysis, and financial plans. However, there is no fixed right or wrong way. And as a living document, it can evolve.

Key Chapters

Before you start, consider some central questions. Ask yourself about the following:

• Demand for your product or service
• Market size and saturation level
• Location of main customers
• Pricing for similar offerings
• Income of potential customers

Bottom line, what pain point does the business solve, such that customers would be willing to spend their own money on its solution? Is there enough opportunity in the competitive landscape?

Normally, business plans begin with an executive summary, which is an “elevator pitch” describing the new venture’s mission and the gap it is filling. This make-or-break section, which is all some investors request, should be short and focused, comprising no more than two pages. (Hint: Many people write it last.) State the registered name, legal structure — C or S corporation, general or limited partnerships, sole proprietorship or limited liability company — and the location.

Now, explain how your product/service works. You might note the pricing model, suggest typical customer profiles, or mention your supply chain and order fulfillment strategy.

Marketing is a core section and often the most time-consuming one to write, but it highlights your deep knowledge of your target audience. You can reference total households, their median income, and demographics. You cannot ignore the competition, which always exists, even if indirectly. Yet you (hopefully) have strong differentiators, such as cost leadership, a unique selling proposition, or a niche audience. Try to reveal how you will develop customer loyalty, leading to repeat business.

Finally, especially if you are looking to raise money, you need financial plans, including budgets for startup costs, ongoing expenses, and revenue projections. If you will be hiring a team, you may want to note projected employee skills and roles, duties, and contemplated salaries.

Funding Sources

If you need to secure funds, you must show why your proposition is a good investment. Potential investors want to see your goals, growth plans, methods, and time limits with milestones.

You may be looking for debt or equity or some mixture of the two.

Even if you are looking for a relatively modest sum for startup costs, you might sketch out some expenses you anticipate:

• Rental space
• Business registration
• Fees
•  Utilities
• Office furniture and equipment
• Technology/software
• Inventory
• Advertising
• Web design and hosting
• Supplies
• Shipping

For longer horizons, it is customary to include pro forma pages to present information in a standard format. Your projections will comprise forecasted income statements, balance sheets, cash flow statements, and capital expenditure budgets. Quarterly or monthly estimates are appropriate for the first year, with annual predictions thereafter.

Don’t Be Intimated

It may seem like a massive amount of detailed background, but do not be discouraged by fear of failure. Here are a few tips to help you launch:

• Avoid technical descriptions and buzzwords.
• Don’t overpromise, set out unreasonable estimates, or indulge in over-optimism.
• Go for brief and simple presentations wherever possible.
• Network with fellow entrepreneurs and find mentors.
• Go at your own pace — you don’t need extreme pressure in retirement.
• Obtain requisite licenses or permits early on.
• Ask several trusted acquaintances to proofread.

It is critical not to exhaust your savings in the pursuit of a business dream. If you are retired, in particular, you are counting on that nest egg to last your lifetime.

Your financial adviser may be an ideal additional pair of eyes to review the first cut. They will be fully attuned to your circumstances and hypervigilant about helping you safeguard your retirement security.