For the next 19 years Baby Boomers will be turning 65 at a rate of 10,000 per day. This means there will be 10,000 more people of retirement age in the USA every single day. Retirement is wonderful and exciting, but what does all this retirement at once mean for American businesses?
The biggest change this retirement will bring is one of the largest transfers in wealth in US history. It’s estimated that billions of baby boomers will close or sell their businesses as they retire, leaving a major opportunity for younger generations to not only make a living, but also to save small businesses in America.
Instead of letting baby boomer businesses close, millennials have the opportunity to recognize opportunities, buy them from retiring owners, and grow them with our country. These baby boomer businesses are great investments as they have loyal customer bases, proven models, and oftentimes no debt.
If you’re ready to retire, and are thinking about selling your business to a younger generation, you really have nothing to lose. It’s a win-win, especially since you wont be alone. According to a study done by BizBuySell.com, the number of small businesses listed for sale is currently at a six-year high, and the number of completed transactions and median sale prices are rising by 12% when compared to the numbers from just last year. While there are always multiple factors in play, both bankers and brokers alike say that the sale increase is mostly because of business owners in their 60s and 70s that are ready to pass down their work to the next generation.
Still not convinced? There are a host of reasons why boomers that are ready to retire should sell to millennials, including:
- Phasing Out – People who sell their businesses often have a unique opportunity to stay on part time, at least for a while, to help the new owners learn the ropes. This is an excellent way to gently transition into retired life.
- Extra Cash for Retirement – Selling your business is a great way for a big cash influx to help you start your retirement off on the right foot. This extra money can also help you stay out of your savings longer, helping you make even more money on investments and save on taxes.
- Shift The Wealth – Perhaps the most exciting benefit of selling to a younger generation is the chance to shift patterns of wealth and economic prospects. Business buyers are becoming more and more diverse. In fact, another BizBuySell.com study found that more than 30% of buyers are self-described at Asian, black, or Hispanic. The study also found that 20% of the buyers are women. This new opportunity could bring economic growth to groups that have historically lagged.
Are baby boomers ready to sell their businesses? The data says yes. Should baby boomers sell their businesses? Again, the data doesn’t lie.
Here are some books to help you prepare:
- Walk Away Wealthy: The Entrepreneur’s Exit-Planning Playbook
- The Exit Strategy Handbook: The BEST Guide for a Business Transition
- The Smart Business Exit
- Exit Strategy: A practical guide to selling your business – How to sell a company for the best price and ride into the sunset
- 8 Figure Exit Strategy for HVAC and Plumbing Contractors: How To Grow Your Contracting Business Into An 8 Figure Empire In As Little As 24 Months
If you’re convinced that selling is the right thing for you and your business, read our follow up article “How To Sell Your Business: An Exit Strategy Guide”. Feel free to comment below with any questions or personal stories you have.