Opportunities Abound for Young Entrepreneurs Because Boomers Are Selling Their Businesses

Shutterstock

Most of the businesses in the United States are small businesses—about 99.9 percent of them. Small businesses hire more laborers than any other kind. A small business is any business with less than 500 employees. Many of these businesses are owned by baby boomers, who are and will be retiring soon and listing their businesses for sale.

NerdWallet reports that there are about 33.3 million small businesses in the country now. After 2021, the United States had 16 million new small businesses started. In 2023, there was a record-breaking 5.4 million new businesses started.

The Success Rate of Business Startups

Business startups often have a short lifespan. Although there are several reasons for this, up to 20 percent will not survive after the first year, and 30 percent will fail by the end of the second year. Only 50 percent survive beyond five years, and only 10 percent make it to the 10-year mark.

Many small businesses are senior owned. After running their businesses for a few years, they are ready to retire. When they do, some plan on closing it altogether, but some look to pass the business on to family members, or they may be willing to sell it to interested parties for the right price.

A lot of small businesses are one-person operations. ForbesAdvisor says that eight out of 10 small businesses have no employees. One person does it all in 27.1 million businesses across the United States. Only 16 percent of small businesses have anywhere from one to 19 employees.

Boomers and Gen X Own Most Small Businesses Today

Baby boomers own 40 percent of all small businesses today, and Gen X (born 1965–80) owns about 47 percent of all small businesses. Millennials (born from 1981–96) only own 13 percent of small businesses.

When a boomer approaches retirement, it is an excellent time to ask if they want to sell their business. BusinessDit reports an average of 350,000 baby boomers who decide to sell their business every year.

A Path Easier Than Starting Your Own Business

Starting your own business requires much work before you even get started. Besides taking time to look over small-business ideas to find one you like, raising the funds you need will take even more time, too. Once you start, you have little guarantee that you will succeed.

An easier way would be to buy a business from a boomer who wants to retire. They have already done the hard part—all you need to do is to keep it going and improve it. They also already have the customers needed to sustain the business and a recognized name in their community.

Instead of just buying the business from them, see if you can work with the business owner for a while. Doing so will let you learn all the ins and outs of the business and what makes it successful. You will also be able to see any current weaknesses in the daily operations.

Seeing a business from the inside is important because so many fail each year. If you are unaware of that type of business and what is involved, you may become discouraged and not do what is needed to keep it operating in the black.

The Fastest-Growing Industries

One of the best ways to get a successful business opportunity would be to get a small business by buying one—in a field with great demand. Many baby boomers are approaching retirement age. Because of their growing need for medical attention, it means that there will be an increasing demand for healthcare services and social assistance. Forbes says that these two industries are the fastest growing.

Owning Your Own Business Often Requires a Lot of Hours

BusinessDit reveals that small-business owners must often work more than 40 hours weekly. As many as 19 percent of owners spend more than 60 hours each week, but more owners than this work more than 40 hours per week.

If you have no employees, remember that you are doing all the work—even those tasks you do not like. Your only option would be to hire someone else to do them for you.

Tips for Buying a Business

If you decide to buy a small business, look at every detail. Get a good look into the finances to ensure that it is profitable. Be sure you know the processes involved, sources for materials, the time it takes to produce the products, and how to operate any machines to manufacture them.

You also need to find out if the products(s) or services will be in demand for a few years. Ensure there are instruction manuals for the equipment, know who can repair them, and what the best sources are to find new customers—radio, word-of-mouth, social media, newspapers, etc. Finally, you need to decide if it is something you want to do for a few years.

The Guardian mentions that most boomer startups are not the hottest and fastest startups and they do not involve building apps. Instead, they most likely consist of gas stations, restaurants, roofing companies, and pizza shops. Although not cutting-edge, these are industries that will be around for a long time.

Getting the Funding to Buy a Small Business

Getting small-business funding is apt to be easier because it is already a successful business. You will likely need to show some business acumen, and you should also have some experience with that type of business.

When you buy an existing business that has been around for a while, realize that you can also tap into the wisdom and expertise of the current owner. They are often glad to share their knowledge with younger entrepreneurs to help them avoid common mistakes and show you ways to save money.

The Epoch Times copyright © 2024. The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.