A second act consultation concert takes time and effort to be successful. here are a few tips
While retirement signals the end of the prototypical 40-hour work week for many Americans, for some it marks the start of a second act in coaching or counseling. Yet, many would-be consultants learn that it’s not as easy as hanging up a shingle and waiting for the business to take hold.
Managing a successful transition takes planning, which can mean setting the stage a year or more before quitting your full-time job. Going down this path also means defining your expectations, determining your goal and setting up the right business structures, among other things.
“Formulating the plan takes time,” says Clayton Quamme, a certified financial planner at AP Wealth Management in Augusta, Georgia, who advises clients on second-act counseling careers. “It’s a little more difficult than just looking for another job.
Here are some ways to start a retired consulting career:
Define your goal and ideal client: Make sure you think about what matters to you at this point in life and how you are going to find time to do these things as you try to grow your business, says Tracy Timm, career consultant in Dallas .
Define what you think the success of the business will mean. Are you doing this because you need an income to maintain your lifestyle or is it a side activity to keep you busy and add a little more? How much time are you willing to devote to it and does that include weekends? How will you balance the business with your other retirement goals, like traveling and spending time with your grandchildren?
Knowing the answers to these questions is important because the way you approach the business will be different if you want to work a few hours a week or if your goal is 50 to 60 hours, she says.
It is also important to create an ideal client profile and stick to it, whether it is the size of the mandate, the income of the project, the area of expertise or otherwise, says Morgan Stone, Certified Financial Planner at Stone Wealth Management in Austin, Texas.
It can be difficult to turn down potential income opportunities, but there can be pitfalls in hiring clients who are not for you. It could mean less time for the projects you love and a less enjoyable retirement. “If you want to start a business at 60, only say yes to projects that will be worth your mental and physical energy,” says Timm.
Find your niche: It can take time and effort to focus on what you want to do and find the right customers. This is where networking with the contacts you have built over the years can be important; rely on them for suggestions, advice and referrals, say the advisers.
Quamme gives the example of an accountant who in his late 50s was ready to retire from his daily job but wanted to do some type of consulting work. He wasn’t interested in doing personal tax returns, but didn’t have a specific game plan. By talking to his financial advisor, a lawyer and others in his network, he was able to focus on high-level tax planning for businesses.
You might also consider having your employer become your first consulting contract, a tactic that Stone says has worked well for many of her clients.
As you focus, think beyond your formal training to other areas where you might have expertise that you want to share with others, says Timm. Suppose, for example, that you are a powerful executive who hasn’t had a work-life balance for 40 years, and now you want to help others in similar situations. “It’s not just your work experience that makes you a credible source of information,” she says.
Set up the necessary framework: How you structure the business can depend on many factors, so it is best to have it run by professionals in finance and law. If you are creating an LLC, a
, or operate as a sole proprietorship? Are you going to have employees or are you going to be a one-person business?
Other important questions include what types of insurance you might need depending on how your business is set up and what the ramifications might be if you are having a health problem and cannot perform your duties. “A health problem as a consultant can really have a huge impact on your income,” says Quamme.
There are also tax considerations. As an independent contractor, you will be paying self-employment taxes and you will likely end up doing quarterly tax estimates. You don’t want to realize six months down the road that you have an unexpected big tax bill because you didn’t prepare well. Talk to your accountant and financial advisor when you plan to consult so you’re ready for what needs to be done, Quamme says.
Other ways to set the stage include putting your contracts and service contracts in place, so that when you get a customer, the infrastructure is in place and you don’t try to catch up to it at the end of the day. stolen, Stone said. He also recommends that clients use business accounting software. “If you don’t keep the books properly early on, it can become more difficult to go back and fix the previous issues,” he says.
Write to [email protected]