Boomer Owners Beware

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Much has been written about the fact that the Baby Boomers are now beginning to retire. What hasn’t been discussed much is what will happen to those boomers who own businesses and the difficulties they’ll face when they decide it’s time to sell.

Just to put things in perspective, it is estimated that there are upwards of 111 million boomers in Canada, the US, the UK and Australia combined. Although there doesn’t appear to be any actual census numbers, it is again estimated that boomers own 16- 50% of all businesses. If one assumed the lower end of the estimate of 20%, that translates into a potential 20,000,000 businesses coming to market between now and 2022 in these four countries. That’s over 5,000 businesses a day, every day for the next 10 years. If you think you have competition now in running your business, just wait until you try to sell it because you’ll most likely be smack dab in the middle of a buyers market. Granted many of the businesses cannot or will not be sold because they are just too small or are based on personal services with limited appeal.

With all the noise on how ill prepared baby boomers in general are for retirement, I can only assume the boomer business owner is no better off. Far too many boomers are banking on the sale of their businesses to fund their retirements and have not made any alternative plans. For the owners of better run businesses this may be a safe bet, but I would still temper the expectation given the impending glut of businesses coming to market.

So if you’re a boomer planning on retiring on the proceeds from the sale of your businesses, here are three things you need to do this year to start the process;

Get An Evaluation

Quit guessing at what you think your business is worth, have it evaluated. An evaluation is expensive, but it does give you a reality check and provides a valuation benchmark. In many cases, it will serve to highlight any deficiencies you may be ignoring that will negatively impact the saleability of your enterprise. Additionally, having a formal evaluation in hand at negotiating time will give you the confidence to justify your asking price. The money spent will more than be justified by allowing you to set realistic expectations and increasing your odds of selling your business.

Strengthen your balance sheet

The easiest way to justify your asking price is to maximize the profitability your company. Pledge to eliminate or significantly reduce all unnecessary expenses. Although this should be done regularly, we are all guilty of not paying attention to some of the minutia and before you know it you’ve incrementally increased your overhead by a few percentage points. Not only is your company less profitable while you still own it, but it will also affect your final selling price, so you get hit twice.

Get out of your own way

I’ve said this a hundred times. Most business owners can’t get out of their own way. A business that is dependent on the owner is far less valuable than an organization that can operate on its own. As an owner you need to let go and let your employees pick up the slack. If they can’t, train them and do it now! Don’t know how or where to start? Begin today by making them provide the solution to the next problem they bring you. Ask them how they would deal with the issue. If it’s close enough, let them execute it, if not, ask them a series of “what if” questions to get them used to thinking about the impact of their solution on the company and on the client. Of course this is not easy or painless, but then again you should have been doing this all along!

It has been said that the Baby Boomers have enjoyed more successes and better lifestyles than previous generations. So, if you’re Boomer owner and you hope to enjoy your retirement, you better start planning to sell your business now, because hoping and praying is not a strategic initiative.

Copyright © Greg Weatherdon 2012

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14 Responses to Boomer Owners Beware

  1. I think the glut of retiring business owners may be a blessing in disguise for some small business owners. Not due to decreased competition as some businesses close instead of changing hands but through the knowledge and experience some of the boomers take with them (and potentially into your business).

    Is your business growing? Perhaps too quickly for your liking? Is it NOT growing because you haven’t the time to make sales calls?

    A retiring boomer may be a great resource for you on a part time basis or to take on an advisory role. They keep their fingers in the pie so to speak, it gives them something to do after the luster of full-time retirement wears off and allows them to earn a little additional retirement income. You in return are rewarded with an experienced & knowledgeable advisor/salesperson/clerk in order to leverage your time in order to grow or deal with an expanding business and shrinking time schedule.

    • says:

      Hey Marshall,

      Thanks for the input. You make some great points. Trust is a common concern I hear from many owners. Having an experienced retired boomer owner watching the shop so to speak allows one to get out and get the business.

      Thanks for contributing.


  2. Jimm Fox says:

    As David Cork pointed out in ‘The Pig and the Python’, boomers continue to influence every aspect of the economy. Greg, you’ve identified yet another effect- the impending glut of small businesses that could soon flood the market. I agree in principle with your thesis however I also believe that a large portion of boomers will either choose not to, or will simply not be able to retire in the short term – given the state the economy and personal savings. That reality will help to mitigate some of the effects that you suggest.

    More importantly (…and optimistically) I believe that we will begin (within the next 3 to 5 years) a new economic cycle driven by technology (specifically nanotech, biotech, IT and robotics) that will dwarf the .com bubble, be sustained for decades and that will create ample opportunity for boomers to cash out along the way.

    • says:

      Hi Jimm,

      Thank you for commenting. I agree that many owners won’t or can’t retire and that’s really what I’m trying to bring attention to. Continuing to run a business past your best before date is akin to a sentence. Anyone who works at getting their business ready for sale will have a huge advantage over most other businesses that haven’t put in the time and done the work.

      I can’t speak to the next technology cycle other than to say that most boomer owned business are in traditional non-tech industries.

      Thanks again


      • Ron Mann says:

        Many Boomers remain in business because they did not realize a plan on how to take value out of their business. They were too busy managing the daily crisis and now it comes as a shock to find that no-one with a million dollars is going to walk in and purchase their baby.
        Others see no value in retirement and wish to remain active; it’s healthier.

        • says:

          Hi Ron

          Thank you for reading and taking the time to comment. I appreciate getting feedback on my posts.

          You’ve stated very succinctly the reality that many owners are faced with. They naively believe that the “tooth fairy” or some other mystical figure will want their business at possibly an unrealistic price.

          Getting the business ready for sale is a herculean task if left until the end. Selling my first company was not a pleasant nor fruitful exercise. My next company was built from the get go to be sold and therefore the process wasn’t so daunting as I did it over 17 years….but I also assumed that just maybe no one would want it and took the necessary steps over that period in the event that was the outcome.

          Staying in your business is a fabulous option but only for those you absolutely love what they’re doing and continue to get that buzz. Sadly, they are in the minority with the rest of us just getting tired or bored with the familiar.

          The third alternative that I should have mentioned was sell your current company, extract your wealth and now go do something that you’re passionate about without the risk.

          Thank you again for your time and please register to receive notification of new posts at I would appreciate having you as a regular reader.



  3. From what I’m seeing out there, many businesses people simply own their own jobs, so it will be tough to “retire”. If they didn’t set up their business as a system to continue to provide ongoing income, they will have a tough time selling their business. Those that put money aside are going to be dependent on the financial value of their assets and money. That too is uncertain and, judging by the up and down markets and the printing of funny money down in the USA, probably explains the increase in Yoga and meditation classes:)

    It’s going to be an interesting time ahead.

    • says:

      Hi Richard

      Well said. When you think that so many Boomer Owners either have the bulk of their net worth (+80%) tied up in their businesses, they better hope nothing happens to it. And as you state many owners really only have “a job” and not a business they are in for a very rude awakening when they find out nobody wants it. Thanks for your participation. Greg

  4. Yuri Amadin says:

    Thank you for the article, its a real insights. Agree with some of the comments that many business owners have turned their business into a job and that’s dangerous. I think with the power of the internet and more of the border less world now, the key is to be a niche player in a particular industry for any small business. As the power of long tail keywords are getting stronger in the internet search engine world, I believe that the need for specific niche solution on a niche problem will also be needed. There is nothing that we can do about the increasing numbers of businesses every year, but just like specialist physician, we can always have a chance to be successful as a niche player.

    • says:

      Hi Yuri,

      Thank you for your comments. I find the whole Long Tail concept truly fascinating. Whether keywords or digital product sales, the internet has made niche opportunities available to everyone. Prior to the internet the term “niche” usually meant expensive as limited distribution products/services needed to be offset by higher costs. Fortunately, this hasn’t totally disappeared as niche still commands premium pricing albeit less premium than before. Hard goods will always be challenged because of distribution issues however the internet has allowed the owners of these businesses to now be visible globally whereas once that was prohibitively expensive.

      I have always advocated specialization over generalization as a means to simplify the business model and increase margin and when it comes time to sell, higher profit businesses sell faster than lower profit ones.



  5. Irene says:

    Thanks for your thoughts.

    Although eventually boomers will have to sell their businesses, the retiring point needs to be postponed. People in their 60’s are younger today than people in their 60’s have ever been, and they are wiser and more experienced than many young people who get into business.

    Municipalities need to encourage boomers to continue developing their businesses, and even start new ones. How about the “Boomer Entrepreneur of the Year Award”? Why not?

    Just like people mature, so do businesses, and the traditional retirement years can be seen as a good evaluation time albeit not for sale but for change and restructuring. Perhaps such change would see adding a young partner or adjusting to changing markets, but it will focus on growth rather than on closure.

    And just like aging people need hope and a future, so do their businesses. Selling is not the best option unless it can yield the profit we expect. Building up for retirement 10 years later makes more sense. A. it gives an added value to a person’s life and B. it allows time for a realistic business change that will extend the business’ life, while yielding profits for another 10 years.

    If you are in a hurry to get rid of your business upon retirement, perhaps it is time to consider a new business about which you are more passionate!

    • says:

      Thanks Irene for taking the time to read and to comment. You bring up some interesting alternatives that I do agree with but mostly on a philosophical level only.

      Although people in their 60’s are more active and younger at heart, it still doesn’t preclude that fact that they will want to sell their businesses. For most, the reasons are straightforward. At the top of the list is that they’re tired of the daily responsibility of running their own show or in my case after 25 years of self employment, I was bored. So I sold. And I still have a ways to go before I hit 60. Sure change is always an option but if you’ve managed to survive 20+ years you get a little tired of “reinventing” yourself one more time.

      Hiring someone younger is usually not an option because if it was, they would have done it long ago. It could also be that the business probably couldn’t support another salary or any excess cash was going to fund a retirement. Besides, handing over the running of your company doesn’t make the worry go away and may even increase stress levels for some.

      Personal reasons such as a retiring spouse who may want a change in the lifestyle that excludes owning a business, because of the restrictions it imposes, may also come into play.

      My last comment is purely pragmatic. Most business owners have the majority of their personal wealth, excluding residence, tied up in their enterprises and have reached a point where they need to unlock those funds/equity.

      Granted there are some people out there that absolutely love what they are doing, have created wealth outside of their businesses and live a fairly well balanced life and are fond of saying “they’ll have to carry me out”! They, unfortunately, are in the minority.

      The reality of the situation is that one day you wake up and decide it’s time to sell and once you’ve reached that point you’re not much interested in continuing.

      Your postscript certainly provides another option for those willing to continue after they have liberated their equity but again I say, most don’t want to start another business.

      Thank you again for your contribution



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