Why Buying a Retiring Business Is the Smartest Move for Young Entrepreneurs

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An upheaval is reshaping the small business landscape, but contrary to popular belief, it’s not necessarily a destructive force — it could be your golden opportunity. Financial experts are calling it the “silver tsunami”: the wave of small business ownership transfers triggered by the retirement of the Baby Boomer generation, who currently own 30 percent of the nation’s nearly 35 million small businesses, according to Guidant Financial and the U.S. Small Business Administration, respectively.

For younger entrepreneurs, this could be a game-changer. With Baby Boomers retiring at an accelerating pace, now is the ideal time for Gen-Xers and Millennials to step into business ownership — if they’re prepared to navigate the unique dynamics of buying a company from a retiring generation.

Why should you buy from a Baby Boomer?

Let’s break it down with hard numbers. Fewer than 15 percent of boomer companies are passed on to the family’s next generation, according to Project Equity, a non-profit employee advocacy group. The rest? They’re up for grabs. Often, the reason isn’t that the business is struggling. In fact, Boomers tend to run businesses that are more financially stable and operationally sound than others. Their companies have survived economic downturns, evolving markets and changing technologies, and many have grown stronger because of it.

For prospective buyers, this means more stability and less risk. But that doesn’t mean you can skip the due diligence process. As always, carefully vet any business you’re considering purchasing. However, compared to other businesses, those owned by Baby Boomers tend to have a better track record, especially as they’re generally more seasoned and experienced.

The challenges of buying from a Boomer

Despite the clear advantages, buying a business from a Baby Boomer comes with its own set of challenges. For many, selling a company they founded feels like giving up a child. If the owner is the sole decision-maker, their departure could leave a leadership vacuum that makes the transition challenging. It’s crucial to assess whether the company is prepared for leadership succession and whether there are any gaps in the management team.

Additionally, many Boomer-owned businesses may rely on outdated technology. While some owners are tech-savvy, others have resisted upgrading their systems. This presents an opportunity for the buyer to modernize and grow the business using newer tools, including AI, digital marketing and automation. If you’re comfortable with technology, this gap is your chance to gain an edge.

Another consideration: while this emotional attachment can complicate the transition, the right buyer might actually find that it clears the way for a smoother exit. If the owner’s children aren’t interested in taking over, the business may not carry the same emotional weight. For instance, a medical device company that transitioned from family ownership to a third-party buyer saw an 87% increase in valuation just 18 months after the sale.

Key considerations before you dive in

1. Get expert guidance

You’ll need a seasoned business broker who specializes in your industry. Look for one with experience, credentials, and transparency in both their process and fees. Additionally, enlist the help of an experienced CPA to scrutinize the business’s financials and ensure there are no surprises post-sale. A smart, well-negotiated deal could give you the leverage you need to succeed from day one.

2. Evaluate company culture

If the team is close to retirement or the business has long-term employees, you may face the challenge of retention. Consider offering incentives to retain key staff, especially if the owner’s departure could create unrest among loyal employees. Also, evaluate whether the company’s culture aligns with your vision for growth and innovation.

3. Negotiate a transition period

One of the best ways to ensure a smooth transition is by negotiating a transition period where the previous owner stays on for several months. During this time, they can train you, introduce you to key vendors and customers, and help you integrate into the community. This is especially important if the owner has strong local connections or a reputation that could give your business an initial boost. Be sure to include this transition period in your purchase agreement.

Turning a legacy into your own

Though you may encounter comments like, “The old owners never did this,” buying a Boomer-owned business can set you up for success in ways that starting from scratch never will. The silver tsunami isn’t just a wave to watch from the shore — it’s a massive opportunity for those ready to ride it.

Acquiring a business with an established customer base, track record, and reputation allows you to build on a solid foundation. Instead of re-inventing the wheel, you can leverage years of experience and industry connections to grow and innovate. And with the right adjustments — whether it’s streamlining operations, upgrading tech, or enhancing company culture — you can leave your own mark on the legacy and build your own.

Now, more than ever, Baby Boomer retirees are opening the door for the next generation of entrepreneurs. If you act strategically, the silver tsunami could help you build your own legacy, with the lessons and opportunities of the past firmly in your corner.

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