Family businesses are talked about less today than they have been throughout most periods in American history. It’s not that small, family run businesses have dropped in prominence, they still make up a large part of the economy and workforce. Still, it’s undeniable that they’ve lost relevancy, so why?
The main reason is seemingly that many of these businesses have hit the end of their shelf life, and the new generations are coming in to replace them. Baby boomers own 40% of all small businesses and franchises currently, and every day thousands of baby boomers retire. These two facts coinciding makes it so that so many of these small businesses are having to make hard decisions as their owners retire.
And the reality is most of these business owners have no clue what to do with their business. Over 50% of small business owners have no plan for succession or transition. So when the time comes to retire, while many will pass their business onto their children, many will close, and notably many will sell.
Selling has become an attractive option for these older family businesses due to the fact that most boomers have no retirement plan. What better way and time to make some money than on your way out and with the businesses you’ve run for years leaving your hands. Boomers’ businesses tend to be reliable, profitable, and full of loyal customers.
This makes them a more than valuable commodity for the Millenials looking to buy. So the next time a family business closes, don’t be too surprised when it reopens under new management or someone else comes to take its place. It’s only a matter of time and it’s only natural.
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