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Baby boomer business owners, retiring in record numbers, are fueling a dramatic paradigm shift on Main Street, and many are at a crossroads, trying to figure out if they should sell their business or pass it along to a successor.
Boomers own 2.34 million small businesses in the United States, employing more than 25 million people, according to the U.S. Census Bureau. Twenty-five million workers equates to 25 million families, which in the larger picture is closer to 100 million citizens. Nearly one-third of our population rely on these boomer business owners to make the right decisions regarding building enterprise value, navigating through challenging economic times, business growth and scale and, of course, succession and exit planning.
But a recent survey by Wilmington Trust shows that more than 58% of small business owners have not only failed to complete a succession plan, many have not even contemplated a transition or succession plan at any time along the way.
The impact on our economy as boomers age, run into health problems, burn out or hit significant marketplace hurdles is potentially catastrophic to our economy.
The consequence of failed succession planning directly impacts the 25 million families employed by these small business owners, and the indirect impact is even more staggering. Tens of millions of additional vendors, suppliers, partners, independent contractors, gig workers and others rely on these boomer-owned small businesses to stay in business and are interdependent on one another’s existence and welfare. These figures do not even contemplate the hundreds of thousands of small businesses owned and operated by Gen Xers, millennials or even some Gen Zers.
“We are at a crossroads in the history of small business and entrepreneurship in our country in 2020,” said Jim Blasingame, host of the nationally syndicated talk radio show “The Small Business Advocate,” which focuses on small business and entrepreneurship issues.
“If our nation’s baby boomers don’t get more focused on planning for the sale or transition of their businesses on an urgent basis, then we’ll have millions of citizens whose jobs and careers are in peril and millions more who will not be able to properly retire,” he said.
Another conundrum is the fact that millennials and others in future generations are not interested