Baby Boomers Selling Businesses Creates Opportunities for New Entrepreneurs
With the baby boomer generation transitioning into retirement, a shift is transforming the small business landscape. The latest data from BizBuySell’s quarterly Insight Report sheds light on a growing trend in buying and selling patterns, opening up new and exciting possibilities for aspiring entrepreneurs.
Market Activity and Demographic Shifts
According to BizBuySell’s Insight Report, which tracks and analyzes the health of the U.S. small business economy, transaction activity increased by 5% in Q3 2024 with 2,399 businesses reported sold, representing an enterprise value of $2 billion—a 20% increase from the previous quarter. The increase in activity corresponds with the shifting demographics of buyers and sellers.
According to the data, there has been a decline in baby boomer engagement in business transactions, from both the buyer and seller sides. While boomers represented 41.15% of sellers in 2020, this number has dropped to 28.78% in 2024, indicating fewer boomers retiring and selling. And on the buying side, boomer participation fell from 32.8% in 2020 to just over 16.67% in 2024, highlighting a generational shift in business ownership.
The Boomer Exit Timeline
With the baby boom generation (born 1946-1964) approaching retirement age since 2011, the window for boomer-owned business transitions extends through 2031. However, the data suggests many aren’t waiting, with nearly 43% of boomer sellers citing retirement as their primary motivation, while a third are pursuing new ventures. Others mention a range of factors from burnout to economic uncertainty.
Only about one-third of family-owned businesses successfully pass on to the next generation, leaving room for external buyers to step in. The declining percentage of boomer sellers—down 12% from 2020 to 2024—suggests that while many have already successfully sold their business, opportunities remain for those looking to buy a business.
What This Means for Aspiring Entrepreneurs
The declining numbers of boomer buyers and sellers create a unique market dynamic for aspiring business owners:
- Access to Established Businesses: While baby boomer sellers may be less prevalent in today’s market, a diverse pool of established businesses remains available—from previously transitioned companies to emerging opportunities from other generations of owners.
- Market Timing: The decreasing percentage of boomer buyers (16.67% in 2024) suggests less competition from experienced buyers, potentially creating favorable conditions for new entrepreneurs.
- Proven Track Records: Businesses sold by retiring boomers often come with years of operation, established customer bases, and proven business models, reducing the risks compared to starting from scratch.
- Knowledge Transfer: Buying from a retiring boomer can offer mentorship opportunities. Many sellers are willing to stay on during a transition period to ensure the new owner's success.
The Advantages of Buying an Existing Business
Purchasing an established business offers several benefits:
- Reduced Startup Time: Acquiring an established brand allows you to hit the ground running.
- Built-in Customer Base: You inherit loyal customers and existing market share.
- Easier Financing: Lenders can review the financial history of the business, potentially simplifying the loan process.
- Established Processes: Benefit from established and refined systems and procedures developed over years.
Looking Ahead
The continuing trend of baby boomers exiting business ownership presents an opportunity for the next generation of entrepreneurs. While the percentage of boomer sellers has decreased, suggesting many have already transitioned their businesses, the market remains active with established enterprises ready for new ownership.
For those prepared to take advantage of this demographic shift, buying an existing business from a retiring boomer can offer an ideal entry into entrepreneurship—combining reduced risk with increased potential for success through proven business models and valuable mentorship opportunities.
Visit BizBuySell’s Learning Center for more information on how to buy, sell, and value a small business.