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A Buyer’s Market:
Baby Boomer Retirement
A wave of boomer-preneurs is expected to retire in the next few years, meaning an unprecedented opportunity for those looking to acquire a business.
“Retirement is not the end of the road. It is the beginning of a highway with endless possibilities.”
According to Statistic Canada, 70% of all business owners in North America are older than 54. The average retirement age is 63. A wave of boomer-preneurs is expected to retire in the next few years, meaning an unprecedented opportunity for those looking to acquire a business. The Canadian Federation Of Independent Business reports that at least $1 trillion worth of businesses will change hands in the next decade in Canada.
Replacing 70% of business owners in the next decade is not possible. Many businesses will be forced to shut down because the buyers won’t be there. Those that don’t may not get what their business would have been worth a few years earlier because buyers have so many options.
What does this mean for you? As the businesses of the baby boomers flood the market, you need to think about how you can protect yourself and get the most out of your business. If someone is interested in buying your business today, maybe it’s good timing and you should seriously consider the offer. You may also want to go to market sooner than later.
Even if you’re not planning to sell for another five to 10 years, it’s still important to prepare for succession now. With the wave of baby boomer retirement, mediocre businesses are virtually guaranteed to be un-saleable. Building value in your business is critical to compete in a buyer’s market.
Frequently Asked Questions
What does a buyer’s market mean for business sales?
A buyer’s market occurs when there are more businesses for sale than there are buyers. With a surge of baby boomer owners retiring, buyers have more choices, which can drive down valuations for sellers who aren’t fully prepared.
Why are so many businesses expected to hit the market?
According to Statistics Canada, 70% of business owners in North America are over age 54. As many reach retirement age, it’s estimated that at least $1 trillion worth of businesses in Canada will change hands in the next decade.
How does this affect business owners who plan to sell?
With increased supply, only the most well-prepared and valuable businesses will attract strong offers. Owners who delay planning or fail to differentiate may find their businesses harder to sell or forced to accept a lower price.
What should I do if I get an offer to buy my business now?
If someone expresses interest today, it may be wise to consider the opportunity seriously. Selling sooner, before the full wave of retirements floods the market, could help you achieve a stronger valuation and a smoother selling process.
How can I prepare my business to compete in a buyer’s market?
To stand out, focus on building value now. This means improving profitability, tightening operations, organizing financial records, and ensuring your business runs efficiently without heavy reliance on you as the owner. A broker can help position your business to attract serious buyers even in a crowded market.
