The Hidden Opportunity Gifted To Us By Baby Boomers

The greatest transfer of wealth is happening right now and is being driven, at least in part, by the movement of inheritance from one generation to another.

Yet as millions of Baby Boomers are actively passing along their savings to their children, one thing is at risk of being left behind: the businesses they own. 

Baby Boomers, defined as people born between the years 1946 and 1964, account for approximately 40 percent of small business or franchise ownership. Many of these are service-based businesses, restaurants, auto shops, plumbing businesses, local retail stores, hardware repair companies, and more.

With that in mind, consider this: experts estimate that roughly 10,000 Baby Boomers retire each day. Yes, you read that right. 

However, early indicators show that the logical inheritors of these businesses may not be interested in taking over the reins. This puts the future of many small businesses in question.

A Twitter post from entrepreneur and investor Codie Sanchez catalyzed this topic for me:

While her tweet might exaggerate the point a bit, I don’t think she is too far off. 

Millennials have a wider array of career choices that never existed for their parents and instead have also demonstrated a desire for more flexibility and independence. A report from SmartAsset illustrates that large numbers from this generation are gravitating towards jobs in technology, healthcare, media, and operations.

Gen-Z is not too far off. According to a report from Glassdoor, a meaningful portion of Gen-Z is most interested in working in the tech sector.

Collectively, these data points represent a future where the likely successors of some of these Baby Boomer-owned businesses may not want to take over the family business.

Think about your neighbor who successfully grew a local restaurant franchise from one location to multiple stores or that family-owned retail store that you visit every few months.

These proprietors have built companies with strong local brands, real revenue, and loyal customers. What’s next for their business if they retire?

What may be most surprising is that three-fourths of Baby Boomer-owned businesses are profitable, according to statistics from Guidant Financial. 

The Baby Boomer generation accounts for an estimated 2.3 million small businesses in the United States, which cumulatively employ over 25 million people. A large number of these businesses are thriving and nearly 60 percent have no succession or transition plan in place.

Are we nearing a breaking point where the supply of successful small businesses will outpace the demand of ownership for them? Let’s hope not.

If someone doesn’t seize on these businesses, we all could be sitting around in 10 years with fewer plumbers available to fix your toilet and nothing but chain restaurants serving you boring meals. 

Reach out to me if you want to hear more on this topic or if you have any feedback.