Selling Baby Boomer Businesses
by Steve Wright Ph.d
Baby Boomer business owners comprise over 50% of all businesses owned in the US. The first wave of Baby Boomers is now entering their 70’s (age), moving the sale of their businesses to a front-burner conversation.
Baby Boomers (1944-1964) are the wealthiest living generation representing 77.3 million or 25% of the U.S. population. Much of their retirement nest egg is tied to their personal business assets.
Baby Boomer Business Ownership Stats
§ Baby Boomers have formed businesses at the highest rate of any generation. This generation has been called the "Generation of Prolific Entrepreneurs."
§ Baby Boomers own over 65% of businesses with employees, totaling nearly 4 million companies nationally.
§ 43% of Baby Boomers stated that “Being their own boss” was their primary motivation for starting their business.
§ Over 50% of all current business owners indicated they were over the age of 50.
§ 76% of Baby Boomers rated their happiness level as an 8 or above on a scale of 1 – 10.
§ Retiring Baby Boomer business owners will sell or bequeath an estimated $10-15 trillion worth of assets over the next 15-20 years.
§ Baby Boomer assets are held in more than 12 million privately owned businesses.
§ More than 70% of these companies are expected to change hands as Baby Boomers sell their businesses.
§ The sale of the majority of the 12 million businesses will significantly increase in the number of businesses that will be sold.
§ It is recommended that Baby Boomers have an accurate business valuation completed by a professional business broker to determine the value of their business.
§ 80% of the owner’s wealth is tied up in their companies (an illiquid asset).
§ 60% of business owners between the ages of 55-64 have not discussed their exit plans with their spouses or business partners.
§ 78% of baby boomer business owners do not have plans for how they will exit their companies.
§ The 12,000,000 businesses owned by Baby Boomer are likely to change hands over the next 10-15 years.
Baby Boomers Business Ownership
Baby Boomers are healthier than ever and their years of work experience make them prime candidates to continue running their businesses. Other priorities like grandchildren, travel, hobbies and aging parents are driving baby boomers to consider their business exit strategies.
Many baby boomers are choosing to exit their businesses in their 50's and early 60’s to maximize the profits from the sale of their business allowing them the personal health to travel and enjoy other ventures they desire. Many baby boomers are working through the discussion of the right time to sell their business.
Receiving an accurate business valuation is one of the first steps in making a wise decision. Many baby boomers have decided to sell before the tsunami of boomer businesses hit the market knowing that business values will be negatively impacted by a glutted market.