Through careful planning and the right support network, athletes can ensure that their entrepreneurial ventures are not just temporary safety nets but lasting legacies. The second retirement, much like the first, requires thoughtful preparation, setting the stage for a fulfilling life after sports that aligns with their evolving goals and passions.
Transitioning from a professional athletic career to entrepreneurship is becoming a common path for many athletes. These individuals often launch businesses during their playing days to secure their financial futures and ensure they have something to fill the time once their training routines wind down. However, this ambitious move can lead to unforeseen challenges, particularly when athletes don’t start with the end in mind. Without a clear succession plan, many find themselves trapped in businesses they no longer wish to run after their athletic careers end—a reality I’ve seen firsthand with my clients.
The Double Retirement: An Athlete’s Unique Challenge
Unlike most people, athletes face an additional retirement—first from their sport and then from their secondary careers or ventures. This double retirement is often overlooked but needs more attention, as the first can set the stage for long-term success or unexpected hardship. Many athletes, eager to remain productive and maintain their income streams, create companies with the intention of managing them full-time once their playing days are over. But when that time comes, they often realize they lack the desire—or the necessary skills—to run a business. The unfortunate outcome? Many feel trapped in a role they never truly prepared for, forced to lead their company simply because they didn’t have a succession plan.
A Common Yet Preventable Mistake
An athlete I have worked with for a few years now, started her business during her professional career to set herself up financially and have something meaningful to focus on post-retirement. The venture was intended as her safety net and passion project for life after sports. However, as she stepped away from her sport and shifted her focus entirely to the business, she quickly realized it wasn’t the fulfilling second act she had imagined. With no succession plan in place, she found herself overwhelmed and disconnected from the entrepreneurial journey she once looked forward to.
This scenario is not unique to her. According to a study by the Global Athlete Entrepreneurship Foundation, approximately 20% of professional athletes become entrepreneurs each year, driven by a desire to diversify their income and prepare for life after sports. However, the same study found that nearly 60% of these athlete-run businesses fail within the first five years, often due to a lack of proper planning and support. Compounding the problem, data from the National Bureau of Economic Research reveals that 78% of former NFL players experience financial distress within two years of retirement, and a staggering 60% of NBA players face financial difficulties five years post-retirement.
These statistics paint a sobering picture: athletes, despite their fame and initial financial success, are not immune to the challenges of entrepreneurship and retirement.
Building Businesses That Last
The entrepreneurial path for athletes can be incredibly rewarding, providing financial security and a new sense of purpose beyond their sporting careers. Without the proper planning and support, it can also become an unexpected burden. Athletes need to surround themselves with a team of experienced professionals—financial advisors, business mentors, and legal experts—who can guide them through the complexities of entrepreneurship. This “moat” of support can help athletes navigate the journey from player to entrepreneur and beyond, ensuring their businesses are valuable, transferable, and aligned with their lifestyle goals.
In Conclusion
Ultimately, my purpose at Twelve Points Business Advisors is to make the lives of athlete entrepreneurs easier and better. The best way we know how to do that is by helping athletes build businesses that are valuable, transferrable, and attractive from the very beginning so that they have the space and freedom to pursue whatever dream they can think of after their athletic career has come to an end.
From my experience working with athlete entrepreneurs, it’s critical to initiate a dialogue about an athlete’s true values and long-term objectives well before they hang up their cleats, sneakers or skates. This involves exploring their passions beyond their sport, allowing them to experience other roles and industries, and ultimately helping them identify what will truly fulfill them in the next phase of their life.
A well-crafted business should be structured to thrive even if the athlete steps back. This involves setting clear objectives, creating a succession plan, and understanding the importance of delegating leadership roles to capable professionals who can drive the business forward.
Athletes need to ask themselves tough questions: What does my long-term involvement in the business look like? Am I building this business because I want to run it, or do I want to create something that can operate independent of me? By addressing these questions early on, athletes can avoid the trap of being locked into a business they no longer have a passion for.
The dialogue should not just be about the athlete’s desire to stay busy or continue earning, but also about the practicality of running a business day to day. Building a buffer that allows athletes to explore other jobs outside of their sport is crucial, helping them discover what genuinely excites them about their future beyond athletics.
If you want to start discussions to prepare for every phase of retirement, we’d love to have a conversation.