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Over the next 15 years, the U.S. economy will experience an unprecedented increase in the number of businesses for sale as baby boomer entrepreneurs begin to retire. The result will be a significant increase in the number of available businesses. Experts believe this will create downward price pressure for many privately owned companies.
The baby boomer generation has been one of the most entrepreneurial generations in the history of our country. During the last 30 years over 5 million businesses with annual revenues ranging from $1 million to $75 million were founded. The owners of most of these businesses are now 50 years old or older and beginning to think about retirement. Recent studies by PriceWaterhouseCoopers, MassMutual and Marquette University showed that one out of two businesses will change hands between 2006 and 2016.
Ken Dychtwald cheap air max 90 , a nationally respected demographic expert and author of AgePower has written extensively on the topic of the aging of the baby boomer generation and advised multinational corporations and governments on how to prepare for the impact that the aging of our society will have on our economy, healthcare systems, infrastructure, etc. Dychtwald calls the aging of our population the "Age Wave". He makes the persuasive case that demographic trends like this are predictable, unavoidable cheap nike air max shoes , and need to be understood and planned for so that they don't overwhelm us. Dychtwald believes that, if properly understood, such trends can be tremendous opportunities.
Just as the Age Wave threatens the solvency of the Social Security system, the wave of private business owners seeking to retire will seriously strain, and possibly overwhelm cheap air max shoes , the available supply of buyers and the available capital for business transactions as these owners approach retirement. Given the significant increase in business owners wanting to retire over the next ten years, experts expect that the increased number of businesses for sale may create a case where supply exceeds demand. If we all think back to Economics 101, we know that when supply exceeds demand, prices tend to drop.
The American Family Business Survey sponsored by MassMutual showed that approximately 30% of these owners plan to sell their business to a third-party buyer. Another 30% plans to sell to a family member, while another 18% plan to sell in some manner to current employees. The remainder plan to close and liquidate the business.
For those business owners who intend to sell to a third-party cheap nike air max , it will become increasingly important that they position their business to sell successfully in an increasingly competitive market. With one out of every two business owners looking to sell over the next 10 years, there will be a glut of businesses on the market. Now, more than ever, it will be important that a business owner focus should be on doing everything he or she can to increase the attractiveness, value cheap air max , and salability of the businesses.
Tragically, the PriceWaterhouseCoopers study showed that approximately 75% of private business owners have no strategic exit plans in place. An additional 25% have done little or no estate planning. This is a recipe for disaster.