So, how big is the “baby boomer bubble”?
Yes, really…it is huge!
Here Are the Numbers…
- Over 10 milion small business in the US per IRS
- 2/3rd is owned by baby boomers (54 – 72 years olds), per IRS
- Of the over 6 milion business, 2/3rd of those have employees, per US Census Bureau
- Over 4 milion baby boomer owned business with employees
- BEI Estimates Current Market Value of Baby Boomer Owned Businesses at $10-11 Trillion
- Approximately 20,000 – 30,000 small business are sold each year
- Shall we do the math? If it takes 15 years for baby boomer owned business to sell or close, that is over 260,000 baby boomer businesses per year that will either close or sell.
Under any scenario we have a $10-$11 Trillion Baby Boomer Bubble!
How will this bubble affect you?
The laws of supply and demand assures lower values as more businesses come to market. (Approximately 10 times the historical level of business sales assures significant deterioration of market values.)
Time on the Market
Fewer buyers and significantly more sellers means a much longer sales cycle. Competent M&A advisory firms will become saturated with sellers and will consequently be much more selective about who they will represent.
All business owners face the dreaded “D” risks: “Death, Disability, Divorce, and Disinterest”. Any business going to market is faced with market risks. However, when you consider the current favorable interest rate environment, current historically high business valuations, and mature business cycle, there may never be a better time to sell your business!
Do not get caught-up in this bubble! We are already beginning to see signs of this cycle of baby boomer business sales.