Boomer Business Owner's $2.2 Trillion Challenge

In the United States, between 2011 and 2029, over 800,000 businesses with an estimated value of $3.3 trillion dollars will be disposed of by the Baby Boomers who own them. According to a Trendsetter Barometer Survey published by Price Waterhouse, 65% of these businesses will be sold – with an estimated value of $2.2 trillion.

What happens to the $1.1 trillion in business value not cashed in will be the subject of a future article, for now our focus is on the $2.2 trillion that will be sold.

We know that 99% of these transactions will be small businesses of $1 million or more in revenue. Their owners will be at or around 65 years of age, and if they are prepared they will do what most other ‘business sellers’ never do – they will realize maximum value for their business by planning ahead.

Are you prepared?

Unfortunately, if history repeats, we can be confident that most of the buy/sell transactions taking place over the next 18 years will be executed at valuations far below the expectations of their owners. Not because the businesses or their markets lack potential, but because their business owners were not prepared.

Perhaps one of the first things to consider is the increased possibility of a glut of businesses hitting the market as Boomers look to cash in. For those who fail to plan, such an event could have a significant negative impact on valuations as there would be far more sellers chasing far fewer buyers.

Whether you are looking to fund an early retirement or your next big idea, timing your transaction will be everything. And, the best advice I have heard so far is to start planning now.

Even if you think you’re years from a possible sale, it is far less likely that you will be able to pick and chose the right time to sell, and far more likely that the right time will pick you.

Will you be ready when you get the call!

In our next installment we will discuss the steps you can take to make sure you are prepared to maximize the value of what just may be a once-in-a-lifetime payout for you and your family.

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James Rores is the founder and managing partner of Pipeline Coach; a company that helps professional services firms and small to mid-market companies establish predictable, repeatable paths to growth.  Learn more about James or reach out to him directly.