Introduction:
For decades, experts predicted a massive transfer of ownership in the small business sector as the “silver tsunami” of Baby Boomer entrepreneurs reached retirement age. But with the arrival of the pandemic, high inflation, and interest rate hikes, the timing and scale of this sell-off became more uncertain. Now, evidence suggests that the great business sell-off is well underway and poised to continue in the years to come.
The Boomers’ Exit:
Studies have consistently shown that a significant number of small businesses will change hands in the coming years. The Small Business Administration estimates that approximately 10 million businesses owned by Baby Boomers will be transferred from 2019 to 2029.
Next-Gen Entrepreneurs Emerge:
Younger generations are embracing the opportunity to acquire these businesses. A study by Forrester reveals that those born in 1980 or later now make up the majority (64%) of small business buyers globally. In the U.S., surveys from BizBuySell indicate that an increasing number of buyers and sellers expect the market to accelerate in 2024.
Growth in Transactions:
According to BizBuySell, the number of small business transactions in the first quarter of 2023 increased by 10% year over year. This growth is expected to continue through 2024, as more sellers adopt seller-financing options to facilitate the sale of their businesses.
Motivations for Selling:
Many business owners above the age of 65 are considering transferring their businesses to their children, apprentices, or even closing down altogether. This creates a wealth of opportunities for aspiring entrepreneurs seeking to purchase existing businesses.
A Golden Era for Entrepreneurs:
Codie Sanchez, CEO of Contrarian Thinking, emphasizes that the “silver tsunami” is far from its peak. “We see 10 to 11 million small businesses for sale in the U.S. in any three-year period,” she says. “One in 10 Baby Boomers who own a business may close it down, and 60% are open to seller-financing.”
Finding the Perfect Fit:
Sanchez advises prospective buyers to thoroughly vet businesses before making a purchase. She suggests identifying business owners in your community or network who might be willing to sell their businesses and approaching them directly.
Conclusion:
The current wave of small business sell-offs presents a unique opportunity for aspiring entrepreneurs. By connecting with retiring Baby Boomer business owners, accessing seller-financing options, and conducting comprehensive due diligence, young entrepreneurs can seize the opportunity to acquire established businesses and contribute to the revitalization of the economy.
Data sourced from: foxbusiness.com
