As we have discussed in prior posts, the sheer number of baby boomer business owners who will be retiring throughout the next 10 years or so could swamp the market. No generation in history gave birth to so many businesses. Conversely, no generation of business owners will be retiring in greater numbers in a relatively short time span.
In fact, according to many estimates, about 60 percent of the 15 million privately held businesses in the U.S. are owned by business owners born before 1964. The fear in the M&A industry is that far too many of these baby boomer owners will wait until the tail end of the next 10 years to exit, overrunning the buyer pool dramatically (making the notion of getting started on your exit planning now far better than waiting).
But now for the good news: Contrary to the common misconception that Millennials are lazy, self -absorbed, and addicted to social media, reports are now surfacing that many of them are not interested in working for a large corporation or a government entity after leaving college. No, in fact, many are using new funding sources to aggressively pursue privately held baby boomer businesses.
“One, they really want to exercise leadership early in their careers; they don’t want to wait 10 or 15 years before they get real general management responsibility inside a large company—they want that experience sooner.
“Two, they want a direct link between their work and their reward. Three, they want the professional independence of not having a boss. Certainly, they answer to their customers, their employees, their regulators and their investors—but it’s all different from having a boss,”
These were the words of Royce Yudkoff, professor of management practice at Harvard Business School. Analysts are seeing more and more Millennials pursuing the entrepreneur path via an acquisition rather than what their parents did: land a job with a major corporation.
Yudkoff attributes the growing interest in baby boomer business acquisitions to increased awareness, as well as larger forces in the economy—including the number of small companies coming up for sale along with the fact that careers in large companies seem less secure or predictable than they were 20 years ago.
Again, this is really good news for baby boomer business owners who are taking advantage of our current seller’s market to prepare their companies (and themselves) for an acquisition event and other M&A activity. And most interestingly, these Millennial buyers are using a variety of funding mechanisms to finance their acquisitions.
Given that the Millennial generation will surpass the size of the Baby Boomer generation by 2019, being interested and able to finance the acquisition of baby boomer businesses will supply sellers with a new and growing source of buyers. And, according to reports, Millennials are not only interested in acquiring just smaller businesses.
With the funding sources now available to them, privately held businesses of all sizes across a wide array of industries are attracting this new generation of entrepreneurs.
But keep in mind that you will need to be proactive if you want to attract these types of buyers (or any buyers for that matter). Proactive means getting started now on your exit process. Even if your exit time frame is 5 years out, getting your business “buyer ready” takes time. The longer you wait, the more you risk being forced to sell when you have to, not when you want to.
If you are interested in learning more about Millennial buyers as well as all other buyer types that we work with, you should set aside some time and attend a Generational Equity exit planning conference. We hold these throughout North America and odds are good you will leave the meeting with a wealth of knowledge about how to effectively prepare your exit strategy and approach professional buyers to secure an optimal value for your business.
To learn more, use the following links:
Remember: if you are a baby boomer business owner, the M&A market stands to become incredibly crowded, incredibly quickly, within the next decade. Timing when you sell your business will play a huge role in determining the value of your company, so don’t miss your ideal opportunity.
By Carl Doerksen, Director of Corporate Development at Generational Equity.
© 2018 Generational Equity, LLC. All Rights Reserved.
it all started with a conference.
start your story today,
speak directly with one of our senior advisors +1-972-232-1121
The information we learn from customers helps us personalize and continually improve your experience. Here are the types of information we gather.
We receive and store any information you enter on our Web site or give us in any other way. We do not sell or rent your personal information to others without your consent. We use the information we collect only for the purposes sending promotional information, enhancing the operation of our site, serving advertisements, for statistical purposes and to administer our systems. We DO NOT use third parties to provide customer service, to serve site content, to serve the advertisements you see on our site, to conduct surveys, to help administer promotional emails, or to administer drawings or contests, but reserve the right to do so in the future without advance notice.
By submitting my name electronically and clicking the “submit” button, I understand that I am providing Generational Group, Inc., Generational Equity, LLC, Generational Capital Markets, LLC, DealForce LLC, their affiliates, representatives, contractors, etc. (“Generational Group”) my telephone number, which may include a number that is wireless and/or a number that is on a national, state, or other Do Not Call registry or list. I hereby consent and agree to receive telephone calls including any autodialed and/or pre-recorded telemarketing calls and/or text messages (telemarketing) from or on behalf of Generational Group at the telephone number provided. I further consent and agree that telephone calls may be made using automated technology such as an automatic telephone dialing system, artificial or prerecorded voice, or SMS text messaging. Consent is not a condition of purchase. I further warrant and represent that any telephone number provided is not on any state or national Do Not Call Registry and that by agreeing to these terms and conditions that if any number provided is on any such registry, I hereby consent and agree to receive telemarking calls and/or communications including any phone calls, text messages, URLs, links, emails, etc. to the telephone number(s) and/or any e-mail addresses provided. I understand that by entering my name in the electronic form provided, that I am signing my name as equally as if it was my handwritten signature and that it is my intent to provide an “electronic signature” as that term is defined in state and federal law, as well as industry practices for e-commerce.
For reasons such as improving personalization of our service, we might receive information about you from other sources and add it to our account information.
Generational Group may license the use of its intellectual property including but not limited to its name, likeness, and logo for the use of affiliated offices. Such affiliated offices may not be owned, controlled, managed, supervised or staffed by employees, officers, or agents of Generational Group. Affiliated offices may be independently owned and operated. For more information about a particular office, please contact Generational Group at its office in Dallas, Texas.
This page may contain other proprietary notices and copyright information, the terms of which must be observed and followed.
Information on this web site may contain technical inaccuracies or typographical errors. Information may be changed or updated without notice. Generational Group may also make improvements and/or changes in the products and/or the programs described in this information at any time without notice.
Generational Group does not want to receive confidential or proprietary information from you through our web site. Please note that any information or material sent to Generational Group will be deemed NOT to be confidential. By sending Generational Group any information or material, you grant Generational Group an unrestricted, irrevocable license to use, reproduce, display, perform, modify, transmit and distribute those materials or information, and you also agree that Generational Group is free to use any ideas, concepts, know-how or techniques that you send us for any purpose.
Our computer system protects personal information using advanced firewall technology.
Information Generational Group publishes on the World Wide Web may contain references or cross references to other products, programs and services that are not announced or available in your country. Such references do not imply that Generational Group intends to announce such products, programs or services in your country. Consult a Generational Group representative for information regarding the products, programs and services which may be available to you.
Generational Group makes no representations whatsoever about any other web site which you may access through this one. When you access a non-Generational Group web site, please understand that it is independent from Generational Group, and that Generational Group has no control over the content on that web site. In addition, a link to a non-Generational Group web site does not mean that Generational Group endorses or accepts any responsibility for the content, or the use, of such web site. It is up to you to take precautions to ensure that whatever you select for your use is free of such items as viruses, worms, Trojan horses and other items of a destructive nature.
IN NO EVENT WILL Generational Group BE LIABLE TO ANY PARTY OR ANY DIRECT, INDIRECT, SPECIAL OR OTHER CONSEQUENTIAL DAMAGES FOR ANY USE OF THIS WEBSITE, OR ON ANY OTHER HYPERLINKED WEBSITE, INCLUDING, WITHOUT LIMITATION, ANY LOST PROFITS, BUSINESS INTERRUPTION, LOSS OF PROGRAMS OR OTHER DATA ON YOUR INFORMATION HANDLING SYSTEM OR OTHERWISE, EVEN IF WE ARE EXPRESSLY ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
Furthermore, all information contained within this website is the property of Generational Group.
Success, you have been added to our list.