Business Selling Strategies for Baby Boomer Entrepreneurs

Abstract

Baby boomer is the term coined by sociologists to define the heavy rise in population from 1946-1964.  Collectively the 1960s is the generation most heavily identified as baby boomers.  76 million Americans are between the ages of 32-50 or 26% of the population.

The population of baby boomers has a huge impact on the US economy.  Over 2 Trillion dollars a year; or 77% of the financial assets in the country are generated by baby boomers. In addition they hold over 50% of the discretionary spending authority for private organizations and government.  54% of the baby boomers are self employed.

As time moves on the baby boomers are retiring from current businesses, or selling their businesses, in record numbers.  Starting in 2006, 5.5 baby boomers turn 60 every minute.  4 million baby boomers will turn 50 in 2009.  If the 54% that are self-employed do not transition their businesses successfully, it will have a major impact on the US economy.

Start Early: Plan for the Next Stage

Proper planning for the sale of the baby boomer business is critical.  The baby boomer population is in general not well prepared financially for retirement without a continual source of income.  55% of those 45-55 years of age have less than $50,000 in savings and 90% have less than $250,000.  For a boomer looking to retire with 25 plus years of financial needs including escalating health care costs that translate to less than $10,000 per year.   This requires that the execution of the business sale must be well planned, financially viable and the price point maximized for the baby boomer. 
For many baby boomers retirement will not be shuffleboard and easy chairs, but instead will be a new definition of the term.  Often the sale of the dominant business will lead to a new venture, with different priorities and time constraints, allowing the baby boomer more freedom to pursue other ventures.  This process can be facilitated in the planning process. 
Business valuation, clear standards of operation, training manuals and strong operational processes are all essential in the training process.   Whether the exit strategy will be a family succession plan, a merger or acquisition or a traditional sale the more structured and orderly the business, the higher the valuation will run.  Planning for the business deal takes preparation, foresight, marketing and timing.

Don’t Go it Alone

This is the biggest event in the life of the business and possibly in the life of the business owner.  Don’t go it alone.  Find the professional guidance you need to succeed in the business sale.  If the business sale is not transitioned properly it will probably fail, as only 30% of business sales are actually completed.  The owner loses from the lack of value and payment.  The potential buyer loses as they can’t find the fit they are seeking or the sale is not marketed appropriately and the sale information does not reach them.  Employees lose because they can lose their jobs or opportunities, and the customers lose the service/product availability.  Government loses payroll, income and sales tax revenue from the failure of the business.

Conclusion

The next stage for the baby boomers could be the best stage with the successful and profitable sale of this business.

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