7 Min Read
(The opinions expressed here are those of the author, a columnist for Reuters.)
By Mark Miller
CHICAGO (Reuters) - Jeffrey Nash saw the handwriting on the wall a few years ago, and the message wasn't good. A 56-year-old salesman for a large men's clothing retailer in Las Vegas, his base pay had been cut 40 percent and he faced stiff competition from younger, lower-compensated sales staff. He knew the job wouldn't last much longer.
Nash was too young to retire, and knew he needed a Plan B. Looking for a business he could start, inspiration struck. Watching a young mother teaching her toddler how to walk, he mused about a baby walker that would help parents assist their kids with first steps without being forced to bend over and strain their backs.
Nash got busy creating the Juppy Baby Walker, a clever halter with straps that kids wear while parents hold up the straps, staying upright. He developed and tested the idea while holding down his full-time job, which he later quit.
Nash has taken the Juppy from scratch to $200,000 in sales since its launch in 2009. He has returned to selling menswear part-time. But at age 60 today, the Juppy is his long-term plan for retirement security.
"It's my retirement job," he says.
Nash started what Kimberly Palmer calls a side gig - an idea she explores in her new book, "The Economy of You: Discover Your Inner Entrepreneur and Recession-Proof Your Life" (January 2014, AMACOM). The book explains how side gigs work, and it includes interviews with dozens of people who have started them, ranging from a musical instrument repairman who sells voice-overs on the Web to a medical sales professional who also sells wine online.
Palmer argues that a side gig is one of the best ways people worried about their jobs can develop a backup plan - or an exit strategy.
A senior money editor at U.S. News & World Report, she was inspired to write the book after starting her own side gig in 2009 - a series of personal financial planners that she sells on Etsy.com, the e-commerce website for handmade items.
"It was the height of the recession, and I was terrified that I'd get laid off," she says. "It seemed like it was happening all around me. I felt financial pressure to have a backup plan."
The business started with downloadable digital planners for meeting a variety of financial goals. "But I realized people really wanted something more individualized, so it expanded from there to include half-hour phone coaching sessions and customized planners."
Did her employer mind that she had something going on the side? Not really. "Conflicts of interest are a huge area of concern to watch out for," she says. "But more and more employers are seeing side gigs as an asset. You're learning skills that can be brought back to the job. In my own case, my Etsy shop taught me how to make ebooks and how to market online. Just be careful not to run your side-gig on company time, and get clearance in advance to do it."
Palmer is far too young for retirement - she was 30 when she started Palmer's Planners, and is 34 now. But for people closing in on retirement age, side-gigging can be a great way to boost retirement security. The extra income can be socked away in retirement accounts, and in the event of a layoff before retirement age, it can be used to meet living expenses in lieu of filing early for Social Security.
The Ewing Marion Kauffman Foundation, which tracks trends in entrepreneurship, reports that 23.4 percent of companies in 2012 were started by people between the ages of 55 and 64, up from 14.3 percent in 1996.
"What I hear over and over from people close to retirement is that they want to shore up their retirement funds as much as possible," Palmer says. "And even if they want to retire, they still want to create something valuable using the skills they've built up. They also are craving a sense of satisfaction from building and maintaining their professional identity."
Nash got started by designing the Juppy, and then locating a low-cost manufacturer in China to produce it. He took a three-week vacation from his job to test the idea at baby product conferences and by networking with online retailers and stores.
He knew he had a winner when his efforts immediately generated $12,000 in sales. (The Juppy retails for $29.99.) Today, it's a virtual enterprise: All the marketing is done via online ads and social media promotion, and all sales are online. He employs a few part-time contractors to help him out with information technology and social media promotion.
"We've had hundreds of reviews from mom bloggers," he says. "We'll send them a Juppy, they use it with their own kids and write about it. That's been our main way of getting the word out."
Palmer urges would-be side-giggers who have an idea for a product or service to start by studying online marketplaces such as Etsy, Elance or Fiverr to see where they fit in.
"Some people do quirky things, such as cat coaching or writing other people's wedding speeches, while others leverage their professional skills, from marketing to career coaching," she says. "Browsing the sites will help you figure you what kind of side business might meet a market demand."
She also urges side-giggers to keep costs low, as Nash has done. Online marketplaces offer inexpensive outsourced e-commerce solutions that are ready to go. Finally, she suggests connecting with fellow entrepreneurs through social media and the blogosphere.
"You can learn a lot by seeking out fellow entrepreneurs in your field who share their own experiences and tips. It's also a way to connect with your potential customers."
Palmer doesn't plan to quit her day job anytime soon, Her online shop generates $200 monthly, though her extracurricular income totals $10,000 annually when you include other freelance work and speaking events.
"I supplements my budget," she says. "But more important, I know I could do more with it if I need to."
For more from Mark Miller, see link.reuters.com/qyk97s
(Follow us @ReutersMoney or here
Editing by Douglas Royalty)