Baby Boomers own 40% of the US’s small businesses and franchises. Their 2.3 million small businesses are thriving: 3 in 4 are profitable today. In business services, retail, and construction, 1 in 8 firms are owned by Boomers. Millions of Americans rely on income from Boomer-owned businesses, be they employees, vendors, or suppliers.
Despite their stunning successes, these business owners can’t run things forever. 10,000 Baby Boomers retire every day. So what happens when a Boomer business owner retires? Most small businesses have no transition plan, and millennials are less likely to take over family businesses than prior generations. Some small business owners will have to sell in order to fund their retirement. Healthcare for a retired couple has nearly doubled in price over the last 20 years. Even Boomers who saved for retirement may not have enough.
Selling a small business can be hard. Many are too small to register on private equity radars. Despite the difficulties in attracting attention, Boomer-owned businesses tend to be good investments. They have strong local brands, loyal customers, and a proven track record of serving the market. Millennials ready to be their own boss can be attractive buyers with appropriate experience.
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