The Great Sell-Off: What’s Going on with Baby Boomer Business Owners?

For years, experts have predicted a wave of Baby Boomer business owners selling their companies. But is it really happening? What’s driving current selling trends? What opportunities will the generational transition create? What’s really going on with the Boomers? 

We recently sat down with Wally Kocemba, Chairman and CFO of Calhoun Companies, and most importantly, a Baby Boomer, to find out. 

1. Are you seeing more Baby Boomers putting their businesses up for sale right now? 

Having been born in 1946 at the leading edge of the Baby Boomers it has been interesting to hear and see the evolution of my generation. Over the years many predictions have been made about everything that they have experienced in life, and especially their business acumen. Experts have tried to predict the exit of the many boomers that started businesses over the years. It started about 10 years ago with very optimistic projections that were very slow to come about. I think some extenuating circumstances, such as the economic slowdown due to the Covid pandemic, really kept the Boomers in ownership, probably longer than they expected. Also, a lot of them are having trouble just figuring out what to do after retirement. 

However, I think we are now finally seeing the Boomers coming to the realization that they are not going to live forever and that it may be time to exit their businesses. Age is a motivating factor along with a very strong market for selling businesses that have strong earnings and cash flow. 

2. What are the biggest reasons Boomers are deciding to sell? 

Deciding to sell is usually motivated by lifestyle changes, be it age, health, retirement or the big one, burnout. Also, right now the economy seems to be favoring the sale of businesses with good cash flow, which in turn demands higher sale prices. 

Holding off on selling can be motivated by not having a plan for retirement, a love for owning and running a business, or may be due to economic conditions not being ideal for the sale of a specific industry or type of business. 

3. What factors are influencing the timing of their exit? 

I think the biggest influence is always going to be lifestyle changes, such as health, retirement, or economic conditions. The economy is currently very advantageous to the seller in that there seems to be a lot of buyers combing the country for cash flowing opportunities. 

4. How prepared are most Boomers when they decide to sell? 

Businesses that are healthy, in that they have good cash flow and infrastructure and are usually dependent on good management and guidance by outside professionals such as accountants, attorneys, reputation management and marketing experts are very prepared. 

The smaller businesses, mom and pop, main street, etc. can be very prepared also, but need to have a good bookkeeping system and proper guidance from their own group of professionals. 

I think the most prepared business owners are those that have strong financial statements because these don't come without being properly educated or guided by a trusted group of professionals. 

5. What advice would you give to a Baby Boomer business owner who's on the fence about selling. 

Most importantly, talk with a reputable Business Broker who can guide you through the process.  Then, talk it over with your family and make sure you are all on board. Next, bring in the professionals, accountants, attorneys, financial planners, etc. and be sure to have a plan for life after business ownership. If the signs are positive, you can then move forward knowing that you should have a roadmap to success. 

6. What opportunities does this generational transition create for buyers or the next generation of business owners. 

One of the best ways to have a successful business in the future is to buy one that is already successful. The advantage of buying a business is that you have history to back up the projections that you will use to guide the future. Strong businesses will always have success and value in the future if properly guided by good and ethical management.