The Baby Boomers, the iconic generation of our time, are nearing the age of retirement. What will the Boomer’s journey to retirement look like? Does Bob Dylan’s 1965 Boomer anthem, Like a Rolling Stone exemplify the Boomers next generational hurdle or Elton John’s 1973 Goodbye Yellow Brick Road? Regardless of the method, the Baby Boomers will soon seek to cash out of their careers in exchange for a life of travel, spending time with grandchildren, or enjoying days out on the links.
But what will happen to the small businesses owned by retiring Baby Boomers?
According to Project Equity, Baby Boomers own about 50% of all privately owned companies in the United States and just over 45,000 businesses in Minnesota alone. In the next 10 to 15 years, many Baby Boomers will look to pass on the “generational torch” by either selling their businesses or handing them down them to children. Though some may simply choose to close up shop. This wave of ownership change in small businesses is termed the “Silver Tsunami,” and will have a dramatic impact on the business-for-sale market and the communities.
The majority of Baby Boomers are not prepared for the “Silver Tsunami.” The pool of potential business buyers is large, but business owners have not taken critical steps in preparing their business to be sold. Approximately 75% of Baby Boomers have not implemented a succession plan, meaning those who intend to sell or hand down their business may be forced to close the company instead. Baby Boomers should think ahead, educate themselves, and seek advice from professionals about the steps to take to position the business to be transferred in the future. Check out these articles on Forbes and the Daily Herald for more information.
But let’s hope that The Beatles 1969 hit Here Comes the Sun resounds loud and clear after the Baby Boomer’s find their way clear of the Silver Tsunami.
Kim Lowe and the team at Avisen Legal regularly work with Baby Boomer entrepreneurs with all of their business needs including selling their businesses.
Emilee Walters is our first Avisen Legal Fellow alum and a third-year law student at the St. Thomas School of Law. Emilee is exploring a legal career in business law.