Retirement is no longer about rocking on the porch or playing cards. For a growing number of retirees, it’s a chance to start a new life—even if that means launching a new business.

It may be something relatively easy such as opening a “store” on eBay or becoming an Uber driver. It could be volunteer work. Sometimes a retired couple will open a B&B or day care center. Whatever the path, such endeavors can be emotionally (if not always financially) rewarding. But they can also take a toll. So how can advisors help entrepreneurial retirees build a sound plan that will enhance, not detract from, their “golden years”?

Seizing Opportunities

“Quite a few clients retire but then find themselves starting up a new career, whether paid or unpaid,” says Andrew Crowell, vice chairman of wealth management at D.A. Davidson & Co. in Los Angeles.

He recalls that one of his clients had an opportunity arise almost by accident. She had been the general counsel for a major recording studio. In retirement, she summered at a lakefront cabin in Montana. “When a big city developer came to the lake to develop a resort and commercial properties, she formed a coalition of lakefront homeowners to fight the outside development,” says Crowell. “Her legal background and knowledge of case law made her an indispensable resource.”

This became her unofficial pro bono day job, he says. Though the payoff wasn’t monetary, the client’s sense of satisfaction and accomplishment couldn’t be beat.

Measuring Success

Psychic income is often the primary goal of post-retirement careers, though some are financially profitable too. “Overall, success is not solely based upon financial achievement. It has a personal component as well,” says Ashley Kulju, an advisor and brand strategist at Rose Capital Advisors in Miami Beach, Fla. “If you are actively choosing to become an entrepreneur in retirement, it certainly isn’t just about money in most cases. There’s a newfound excitement and enthusiasm that retirees are not afraid to tackle.”

But Kulju cautions that advisors should help their clients understand what they’re getting into. “Risks of losing money and time can be daunting,” she says, “so one must be mentally tough and prepared.”

Otherwise, there are few rules for these sorts of endeavors. “What matters is the drive, motivation and passion to achieve their goals,” she stresses. “These clients have already experienced success in the corporate world and want to embrace new, unchartered challenges. Not only do they want to succeed financially; they want to feel the satisfaction of success without a big corporate backing.”

Knowing Your Niche

Sometimes it’s best for clients to stay within their niche, or at least a related field. Ben Barzideh, wealth advisor at Piershale Financial Group in Barrington, Ill., tells of an engineering client who, in retirement, became a consultant for his old employer. He was successful because of his “expert knowledge of the equipment and parts they made and sold,” says Barzideh. “What he hoped to accomplish by doing this in retirement was to still stay active, use his expertise and work on his hours and terms.”

Barzideh advises clients to “not start a business that requires a lot of capital investment or one that you have little knowledge about,” he says. “Many businesses don’t make it past three years, and you would not want to sacrifice your retirement savings to start a whole new business, in case it doesn’t succeed. … The clients that I’ve seen have success with a business in retirement were ones that [had] no significant capital investment.”

The Academic Route

In some cases, becoming a consultant means becoming an expert witness who is paid to present testimony in court. Janet Briaud, a founding partner at Briaud Financial Advisors in College Station, Texas, has helped several retired professors go that route. “Some do it on a per project basis, whenever they think a case is especially interesting, and others build a whole business being an expert witness in a particular area,” she says.

One advantage of staying within your area of specialty, she points out, is that there’s virtually no transition or learning curve before you can hang a shingle. “They have the credentials already, because they’re high-level professors in their area of expertise.”

What can be hard, she adds, is simply slowing down in retirement. But to be clear, most clients she’s known aren’t just staving off boredom. “They can charge as much as $500 an hour,” says Briaud. “It’s not always that high, but it certainly can be very high.”

She helps her clients by “talking about what it takes to start a business, how much money they can afford to put into it, how much time they can expect before it is profitable, and in many cases just brainstorming,” she says. “Often just listening is helpful as they come up with their own answers.”

The Conversation

Several years ago, Briaud started a regular discussion group for those going through this transition. “Clients were saying they wanted to retire but didn’t know what that was going to look like,” she recalls. “So we get together and talk about their interests and goals.”

When advisors talk to their clients about retirement planning, she says, it shouldn’t be only about the financial aspects. “Sometimes it’s just how do you go from being fully on to gradually slowing down,” she says. “Advisors should have these kinds of conversations with their clients, and it is really fun.”

To be sure, the advisor’s role can be hard. Sometimes you have to be the adult voice. “I advise clients to do their homework,” says Brett Dearing, a partner at Cerity Partners in New York City. “Passion is great, but make sure the business is self-sustaining and that you’re not growing the business through the use of retirement money.”

Clients, he says, need to ask themselves: Do I have the time and resources to see this through? “As an advisor, I help them do the research and introduce them to people who are important to a successful launch. Advisors can also help with structure, risk mitigation and business planning,” says Dearing.

There are cases, he says, in which clients want to accomplish a goal that “has been with them since they were a kid.”

Be Careful What You Wish For

Yet other retirees discover whole new interests. Dave Geibel, senior vice president and managing director at Girard (formerly Univest Wealth Management) in King of Prussia, Pa., knew a retiree who combined a part-time job in a funeral business and a friend’s granite dealership. “He put two and two together and started selling grave markers made from Vermont granite,” says Geibel. “[He] was able to provide significant discounts because he cut out the middleman and the overhead.”

The new business became so successful, in fact, that he had to turn away business and hire his stepdaughter to run the day-to-day operations. “Be careful what you wish for,” says Geibel. “If you are more successful than anticipated, you may no longer be retired.”

The retirement businesses that are most likely to prove profitable tend to be those that are a natural fit. “Clients that were able to use their previous experience [for example, executives who start a bookkeeping business] were able to have additional cash flow and meet their retirement goals quicker,” says Doug Amis, president and CEO of Cardinal Retirement Planning, a registered investment advisor in Durham, N.C., by e-mail. “The less successful clients were starting businesses that were similar to hobbies.”

In either case, it’s critical to have “a clear understanding of the whys and the hows,” says Amis. “Few retirees want to take on the marketing obligations necessary to birth a new business, but those that have a … natural market may not have that issue,” he adds.

Plan, Plan, Plan

As with any new venture, advisors can and should help clients with prudent planning. “Start with a personal financial plan and a strategic business plan,” says Linette Dobbins, a certified financial planner at McGee Wealth Management, in Portland, Ore. “You need to have capital to start a business and have an alternative source of income while getting your business off the ground.”

Clients might need a lawyer to help draw up necessary papers, and they must be prepared to call in other experts if help is needed—with marketing or bookkeeping, for instance. Some of Dobbins’s retiree clients are “getting paid board positions [typically with their former employers] that keep them engaged but don’t take a lot of time,” she says.

While it may be unrealistic to expect to earn big bucks, that’s rarely the point. “Most people pursuing so-called second acts may not earn the same living they did before retiring, but if they’ve built a substantial nest egg and are realistic, that may be OK,” says Jeff Fishman, founder and managing member of JSF Financial in Los Angeles. “They’re not necessarily looking for financial success. For some, it’s a quest for fulfillment.”

Clients who want to change directions after retirement should “first test the waters,” he says, “[to] see if they’re actually good at what they wish to do. … Sometimes it’s better to let a fantasy remain a fantasy.”

On the other hand, Fishman had a successful client who, at 60, retired and broke into photography. “Our role was to structure his portfolio, largely by investing in tax-free municipal bonds, so that he’d have enough regular income to pursue his passion,” says Fishman. “Today some of his work hangs in galleries in New York and Los Angeles, and he is financially and artistically successful.”