Baby Boomer Business Owners Retiring: Where to Look.
Baby boomer business owners retiring is a real trend, but it does not flood the market for you. In America, fifty-two per cent of employer-business owners are fifty-five or older. However, only twenty to thirty per cent of listed businesses ever sell.
The wave of owners is real.
The United States Census Bureau's business survey puts fifty-two per cent of employer-business owners at fifty-five or older. Also, nearly twenty-three per cent are over sixty-five. In Canada, three-quarters of small business owners expect to sell within ten years. Yet only nine per cent of them have a formal succession plan. So the pool of retiring owners selling businesses is large and mostly unprepared.
Why baby boomer business owners retiring rarely means a sale.
Only twenty to thirty per cent of listed businesses ever sell, and generous estimates reach about thirty-five. Only about one in five sells within twelve months. For firms under five employees, fewer than one in ten ever sells. Meanwhile, in Canada, four in ten owners say they will simply close if no buyer appears. As a result, the wave is mostly a supply of businesses that will quietly shut.
The work is in the owners nobody asked.
Browsing listings is not the route, because listings are the residue after family, manager and competitor declined. Instead, learning how to find off market businesses means finding owners who have not listed yet. That is plausible for you, since half are past fifty-five and most have no plan. Those owners are not hiding. Nobody has asked them.
Start where baby boomer business owners retiring actually are.
List three businesses in your own trade whose owners you believe are past fifty-five.
Write one sentence you could use to ask an owner about their plans, without mentioning a listing.
From the book.
Only twenty to thirty per cent of businesses listed for sale ever sell, and the more generous estimates reach about thirty-five. Either way the clear majority of the businesses that go to market never find a buyer at all, only about one in five sells inside twelve months, and for the smallest ones the picture is worse again. Under five employees, the share that ever sells is below one in ten. In Canada four in ten owners say that if they can't find a buyer they will simply close the doors.
I Want to Start a Business but I Can't Quit My Job, chapter 11: Buy the business instead of building it
Questions about baby boomer business owners retiring.
Are baby boomer business owners retiring creating more businesses for sale?
More owners are ageing, but most listed businesses never sell. Many will close instead of finding a buyer.
How many small businesses sell once listed?
Only twenty to thirty per cent, with generous estimates near thirty-five. Under five employees, fewer than one in ten ever sells.
Where should a buyer look instead of listings?
Look for owners who have not listed yet. Most have no succession plan, and nobody has asked them.
Read the whole chapter.
This lesson covers one section of chapter 11, “Buy the business instead of building it”. The book goes further, with the full evidence, the stories and every exercise.
Lessons in this chapter.
- 01 How Much Does a Small Business Cost: Real Numbers.
- 02 Survival Rate of Acquired Businesses: The Real Gap.
- 03 Baby Boomer Business Owners Retiring: Where to Look.
- 04 Build vs Buy Decision: The Reflex You Never Priced.
- 05 SBA Loan to Buy a Business: How Deals Get Paid.
- 06 What Is a Search Fund: And What It Cannot Tell You.
- 07 How to Evaluate a Business for Sale in One Hour.
- 08 Can I Afford to Buy a Business: Honest Objections.