Dear Baby Boomer Business Owner, Don’t Wait to Consider Your Next Move

Yosemite Valley, CA - Yosemite Valley, CA

In 2024, a record number of Americans will reach the traditional retirement age of 65.  These baby boomers own over half of all private businesses in the US, amounting to $7.4 trillion in wealth, and they are getting older by the day.  Yet many of them lack a transition plan.

Why is this the case?  Maybe the flexibility afforded by being “one’s own boss” is a trap.  Larger companies typically have established retirement policies to ensure a smooth leadership transition.  Not so for many private businesses where the owner retains all decision-making authority; they can delay, so they often do.  It takes conviction to disrupt the status quo, even in times of uncertainty.  We see many otherwise decisive private business owners suffer from this inertia.

Another explanation is the perfectionist tendency of many business owners.  Most of my colleagues have heard from more than a few baby boomers who profess their desire to sell their business only once the business is “ready”.  They invariably identify a particular weakness to be corrected or a new initiative to be implemented before they are willing to open the books to a potential buyer, or to even consider any form of transition.  Two years becomes three, four, or longer.

Whatever the cause for inaction, “time and tide wait for no man,” and preparing for the next stage in life and business requires a clear vision, decisiveness, and active engagement.  To ensure the best future for themselves, their families, and their businesses, we urge baby boomer owners to commit themselves to developing a transition plan, which could be one of the many possible approaches, for example: gifting company shares to heirs, working with the management team to execute a buyout, or pursuing a sale of the company.  Our advice is to do something because doing nothing – avoidance – increases risk and decreases options.

Particularly for those who know they will sell their business eventually, consider preparing for this process sooner rather than later.  The logic is straightforward.  The vast volume of businesses owned by baby boomers is likely to weigh down middle market M&A over the next decade, perhaps longer.  The dynamics in the current real estate market provide a useful analogy.  The value of baby boomer home ownership wealth represented a total of $18 trillion in August of this year dwarfing any other generation (  At some point they will sell and when that happens according to the Wall Street Journal, “The key is beating the crowd.  If boomers decided to sell en masse, the prices they would get would be a lot lower than what their home appears to be worth on paper today.  Even if they can avoid it now, most are going to have to sell in the years ahead.  That could put downward pressure on the prices of the types of homes they live in.  Then it might not be a good time to sell anymore.” WSJ.

Similarly, if the number of companies going to market spikes and the number of interested buyers and the capital supporting such buyers do not keep pace, common sense suggests that leverage will shift hard from sellers to buyers.  And businesses with warts and wrinkles like cyclicality, customer concentration, or competition based on price, will be harder to sell.  It is a lot better to be in front of this kind of wave than trying to catch it.

The bottom line is that the elements for securing a comfortable transition for most private business owners will be case-specific, but the success stories will always involve evaluating alternatives, advance planning, and then implementing the selected plan.  Those who get out sooner rather than later may come to breathe a sigh of relief.  Those who wait may come to regret their inaction as they face fewer options and challenging markets.

For those owners who remain unconvinced, take comfort in the knowledge that our baby boomer clients never express regret at having moved ahead with their lives.  In particular, our clients who had confided in us about wanting a transition due to health concerns, including diminished stamina and burnout, are visibly more at ease.  Beyond the relief they experience when sale proceeds hit their account, they feel invigorated, unburdened and finally in control.

With so much at stake, what is your plan and how will you secure the wealth you have built in your business?  Allow yourself to take a first step and then a step after that.  A lot depends on it.

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