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Modern retirement is no longer a career-ending event, but instead, often a professional reinvention. “For many people, retirement is a time to take on an encore career or start a new business,” says Jamie Hopkins, director of retirement research at Carson Group.

Just because retirement can be a great time to start a business, that doesn’t mean entrepreneurship at that time of life comes without its risks. One of the biggest: time.

“The risk of starting a business in retirement is that you don’t have time to recover from large financial hits,” says David Deeds, Schulze professor of entrepreneurship at the University of St. Thomas and executive editor of the EIX — Entrepreneurship and Innovation Board. (Full disclosure: the Richard M. Schulze Family Foundation and EIX help fund Next Avenue.)

So, while in the planning stages of your part-time retirement business, start thinking about how you will manage the risks.

“To be in the right financial condition to start a business, make sure you have enough liquidity [the ease of getting cash],” says Brandon Renfro, a financial adviser and assistant professor of finance at East Texas Baptist University, in Marshall, Texas. “This means considering not just the money you invest, but the financial commitments, like loans and equipment leases that you’ll take on.

To mitigate financial risk, it’s wise to consider starting a business that’s not very capital-intensive, like consulting or digital services. “You can do part-time consulting in your industry and selectively take on projects that appeal to you,” says Mike Hennessy, CEO of Harbor Crest Wealth Advisors in Fort Lauderdale, Fla.

5 Strategies to Minimize Risk in a Part-Time Retirement Business

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