The information contained here may not be typical and does not guarantee returns. Background, education, effort, and application will affect your experience. Your results will likely vary.
Hey Biz-Buyers,
Welcome to this week’s Boring Business Brief, where we share some of the best insights, tips, and stories from our biz-buying community. But first…
Thinking about buying a biz?
You might want to join the list we’re about to tell you about.
One of our favorite ways to take advantage of the boomer small biz boom is seller financing.
Right now, we’re working on the finishing touches of a program to teach you all about it.
Whether you’re new to biz-buying or already have a few biz’s under your belt, this course will offer hands-on tips, real-life case studies, and practical strategies to help you learn how to fund deals with “Other People’s Money” (OPM).
Be among the first to know when it goes live:
Take care of that, then come back here and get down to business.
Today, in 5 minutes or less:
Small business owners are getting older…
Ever heard the term “silver tsunami?”
As much as we’d all love that to be a surf competition for Hawaiian grandparents, it’s referring to an AARP armada — AKA, the aging population and its impact on society, healthcare, the economy, and, for us, small business acquisitions.
Many in our space will tell you the trend’s impact on small biz buying will be huge.
So let’s take a look under the hood, shall we?
Yup, definitely skewing up and to the right.
Some 17% of the U.S. population is over 65 years old, about 55.8 million people.
Despite representing less than a fifth of the country, they represent a TON of the wealth.
Per the US Census Bureau, the boomers alone own an estimated 2.34 million small businesses in the U.S., employing more than 25 million people.
We’ve got a lot to learn from them, too — the vast majority of boomer businesses are profitable, according to some reporting.
At the same time, here’s the truth: They’re getting ready to pass the baton. Many already are, even if they don’t know it yet.
Experts estimate that roughly 10,000 Baby Boomers retire each day.
Think about how many might want to soon but aren’t quite sure how. In fact, most business owners DO NOT have a succession plan in place. This is becoming an especially challenging issue in other countries, like Japan.
Recent survey data on hundreds of American small businesses from Live Oak Bank found 70% have no real succession plan, yet nearly 1/3 plan to transition ownership within 5 years.
Additionally, Live Oak found that 26% have accelerated transition plans due to the state of the economy.
Many aging business owners will soon be looking for an out. What do these people care about when they sell? According to the research:
- 43% care about the preservation of company legacy/integrity
- 24% care about the price they can sell at
- 22% care about the next owner’s treatment of their customers and employees
It’s no longer as simple as handing off a farm to your kids for them to manage. (Not that that’s ever been particularly simple…)
So say a buyer commits to those items above, that could be all an owner needs to hear…
5 things to consider before you ride this wave…
1. Don’t lose sight of reality
While many existing businesses will likely go up for sale in the coming years, they certainly aren’t all going to be good businesses, and they certainly won’t all be available at good terms. As you already know, terms are king.
2. Business ownership isn’t for everyone
Hang on, let us repeat that: Business ownership 👏 is 👏 not 👏 for 👏 everyone.
Hiring good talent, firing people to their face, managing terrible customers, making loan payments, meeting payroll… A good portion of the population is simply not built for that.
3. Know what you’re getting into
Sure, there’s a Harvard MBA out there who thinks he can roll up 3 HVAC businesses in Bismark, North Dakota no sweat, mix in some digital marketing, and call it a day. Maybe he can.
But maybe he doesn’t even know what HVAC stands for yet, let alone how to operate a screwdriver. Know what you’re getting into.
4. Don’t assume all boomers will sell
Some owners may opt for the stable cash flow and choose to hold on to their businesses as long as humanely possible.
This could present a major opportunity where “sweat equity” comes into play, meaning, you could partner with (and work for) an aging owner in a way that sees your compensation and ownership stake grow over time.
5. Call in the military
In the U.S., hundreds of thousands shift from active military service to civilian life every few years. According to the Bureau of Labor Statistics, “Veterans are 45% more likely to be self-employed than non-veterans.”
As owners across the country seek out compelling buyers, this group could stand to benefit big time — if they act.
3 GREAT links from the week:
Alright, let’s make it 4.
💰 Read: An amazing guide to buying an online business, or “Codie Sanchez with a twist,” as the author puts it
📊 Think: You won’t learn these things in an MBA program…
🧑 Follow: A list of people to follow on SMB X (as in Twitter) if you aren’t already
🎧 Listen: A podcast episode about a plumbing biz acquisition — with some incredible stories throughout…
Who’s looking to buy a biz?
A partial list of real people who began their Contrarian Community journey in recent weeks…
💻 A Senior Data Operations Engineer in the financial industry
⛪ A Youth Pastor at a church
🏠 A Construction Superintendent for new home building
⚙️ The CEO of a company that makes automotive and industrial tools
❤️ A Software Engineer at a health tech startup
🤝 A Senior Sales Manager at a consulting group, who said this as their “why”:
“My family… I’ve spent 20 years scaling high-performing sales teams and building other people’s dreams, so now it’s my turn!”
