Why Baby Boomers Are Selling Their Businesses To Millennials?

An open letter to Millennials…

Dear young people looking for a way to control your own destiny, contribute to honest and gainful commerce, and engage your community meaningfully,

Did you know that you are sitting on the brink of a goldmine?

Consider this: Baby Boomers—very roughly those born between mid-1940 and 1960—are approaching retirement. In the US, Baby Boomer business owners possess 10 trillion of assets, which includes 12 million small businesses (source). In the UK, boomers will be disbursing half of the nation’s wealth (source).

As owners approach retirement, the future of the business is the question.

Depending on whose statistics you read, upwards of 80% of these business owners have no succession plan (source). They have not thought about it, or they have thought about it and cannot face the decisions and emotional difficulties involved in shutting the doors, or in leaving the business to heirs who do not have the interest or skill required to keep the company profitable. Unless buyers make compelling offers for these owners to consider, large numbers of businesses will be disappearing from Main Street in the next 20 years. In addition to the loss of the basic goods and services that everyone makes use of every day, this also means loss of employment for those employed by these shuttering businesses.

A small portion of available businesses ever make it to formal brokerage listings, for a variety of reasons. However, with a little attention and question asking, a motivated Millennial should be able to find at least a handful businesses to seriously consider. It may take a year or even two, but a systematic practice of networking should lead you to many viable options.

Get involved with your local Chamber of Commerce or Business Council. Word of potential sales spread rapidly in these organizations, and you will also gain contacts for assistance with assessment, brokering or financing. Local CPAs are another source of reasonable leads. These individuals would be familiar with the hard numbers of business in transition and be able to help you determine a good valuation.

Local real estate brokers and bankers are likely to have excellent leads on businesses that are for sale. A broker with business brokering experience can help you assess the worthiness of a potential purchase, while the banker would be have resources for both locating and financing a purchase. The bank would most likely be able to tip you off about distressed businesses available at steep discounts.

Probably the most ideal win-win scenario would be apprenticing with an owner and then simply taking over with seller financing. This would provide you with the best possible understanding of the business before you are responsible for it, and give the owner extended influence and assurance that his or her hard work will continue to bear fruit.

The advantages of purchasing an existing business are significant. You would be acquiring not just a business, but the customer base and the history of income, a trained workforce, the required licenses and permits, established vendor relationships and credit lines, and often, a plan for growth. Buying an existing company rather than starting your own would mean that you step into a position of respect within the community rather than starting from scratch with many unknowns.

By owning your own company, you are in the position of making the decisions that affect your own future, as well as the futures of those you employ. You could very well keep a number of individuals in a job. As a member of the local business community you will be able to bring influence to bear on the issues that matter most to you and your employees.

If you are concerned about financing such a venture, rest assured that financing options are myriad and creative these days, even for distressed businesses that would require right-siding. Many times purchases can be arranged without having to invest any of your own money.

If you have thought about owning your own business, I challenge you to find at least one business that sparks your interest, which you would be proud to own and run. I assure you that a very real opportunity lies before you right now.