Ready to Retire & Sell Your Business?
Between 1946 and 1964 Americans created 78 million new people, whom we now call Baby Boomers, or Boomers for short. Those 78 million people believed that the ticket to the American dream was to get a college education and work hard. And they did in record numbers, growing our college educated workforce from 6% to 24%. That created a tidal wave of applicants for corporate America that it just couldn’t absorb. So, Boomers did what Boomers do, continued their endless march for upward mobility by striking out on their own and starting their own businesses.
Today, the first wave of those Boomer business owners are turning 65 and getting ready to retire. They’ve worked hard for 20-30+ years to build their businesses, and they’re ready to have someone younger who wants the same things that they wanted when they started out, to buy their business so they can go enjoy the retirement they’ve always envisioned. Problem is, the next generation, Gen Xers, have very different values than Boomers.
Boomers are workaholics, who grew up as the first generation having a common experience of TV advertising to drive their transformation into consumers of bigger better best of everything. They own 50-60% of small businesses in America, and are consumers for each other’s products and services. Gen Xers on the other hand, grew up using debt for everything they buy, and see work as nothing more than a means to get the lifestyle they want. They are not interested in working long hard hours, and they don’t save so have no capital to buy a business. They see their personal happiness as their number one priority. They don’t equate what they do with who they are like Boomers.
The 48 million Gen Xers will have little interest in a brick & mortar operation that requires them to be on site or on call for most of the hours of the week. Since they have no capital, they will need financing to buy your business, so if your cash flow isn’t enough to support financing, you’ll also have a hard time selling it to a Gen Xer. If they do like your business, and can get financing for it, it’s still a buyer’s market; the market will be short by about 20,000 Gen Xers per year to buy the hundreds of thousands of Boomer businesses to be sold over the next 20 years.
To make things even more challenging, corporate America is catering specifically to the needs of Gen Xers by offering things like flexible hours, job sharing, working remotely, additional paid time off, and flexible benefits. These perks are tough for small businesses to match.
If you’re a Boomer who wants to sell your business in the next 10 years, what do you do? If you want to be one of the few who successfully markets their business, maximizes its value and minimizes taxes, it’s imperative that you have an exit plan.
What’s an exit plan? An exit plan is a strategy developed with the assistance of a team of professional advisors who are experts in their specific area such as wealth managers, attorneys, CPAs, insurance brokers, business brokers, business coaches, and business valuation experts. You’ll look at whether your best option is to sell your business to family members, company employees, or a 3rd party. Then your team of experts will help you create your strategy for what is likely the biggest and most important single transaction of your life. Don’t leave it to chance!
To learn more, attend our next seminar.