Founder of The Harbour Club
Many owners list through a broker only to discover that buyers are not willing to pay their asking price.
Others extract cash from their companies and close the doors instead.
Desperate owners reluctantly sell for a lower price.
Over 10,000 baby boomers are retiring each day.
By 2030 every baby boomer will be 65 or older. (U.S. Census).
In the U.K., Europe, Australia, Canada, Singapore, New Zealand and the U.S. there are 63.95 million small to medium-sized businesses.
In the US, a huge 41% of small businesses and franchises are owned by baby boomers.
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Low demand. These businesses are usually too small to attract interest from private equity firms. Plus, the millennial sons and daughters of business owners aren’t interested in continuing the family legacy. They’d rather do something with blockchain, marijuana, or an app, rather than run a traditional business air-conditioning, cleaning or engineering companies.
Over supply. As I mentioned before, there are 63.95 million small to medium-sized businesses when you combine the english-speaking countries (plus Europe). However, because baby boomers are larger than the next generation (Gen X), there’s a big oversupply.
Not fit for sale. Many owners run their personal expenses through their business and don’t have key staff activity documented properly, among other things. Things that make it very difficult to sell.
Limited time. As baby boomers reach retirement they need to exit their businesses. The longer they wait, the more pressure they put on their shoulders to sell, which could result in them being forced to settle for a lower price.
Competitors. The most obvious buyers for these businesses are their competitors. However, a lot of these business owners do NOT want to sell to their competitors. Why? Because they’re worried the new owner might asset-strip their life’s work and fire all the staff. Plus, selling to a competitor they’ve known for decades often feels humiliating, like they’re submitting defeat.
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