Retirees and the Business-For-Sale Marketplace: A Booming Trend
Retirement has evolved beyond relaxation and leisure, especially with the influence of baby boomers on the economy. The business-for-sale marketplace is witnessing an interesting trend, where retirees are taking part as both buyers and sellers. As the number of baby boomers reaching retirement age continues to rise annually, many consider selling their business, in part to help fund their retirement. Simultaneously, a growing number of retirees are looking for additional income opportunities, driving interest in small business acquisitions. The intersection of these two demographics is not only reshaping retirement dynamics for small business owners, but also leaving a notable impact on the business-for-sale marketplace.
Exit Planning for a Successful Retirement
According to BizBuySell’s quarterly Insight Report, which monitors the health of the U.S. small business economy, a considerable portion of business owners, one in three, identify as baby boomers. Of those looking to exit their business, 47.62% of business owners cite retirement as the motivation to sell. As the number of businesses up for sale is expected to increase in the coming years, many business owners will be focused on solidifying their exit strategy and developing succession plans to safeguard their legacies. 59% business owners surveyed for the Insight Report have an exit plan, emphasizing the essential nature of thorough exit planning for a smooth transaction.
The report also reveals that 11.65% of recently retired business owners are looking to purchase a business for additional income. When marketing a business for sale, the goal is to get the business in front of as many qualified buyers as possible, so leveraging an additional category of buyer is essential. By identifying fellow retirees as potential buyers, this trend opens up new avenues for those looking to sell their business.
Census Insights
In the United States, the most recent Census report indicates that 1 in 6 people is aged 65 and older. As the aging population continues to grow, many individuals are choosing to remain or return to the workforce, driven by a mix of financial and lifestyle reasons. According to T. Rowe Price, 48% of those working in retirement felt a need to work for financial reasons, while 45% are looking for social and emotional benefits.
Sector Preferences in Business Searches
The majority of people aged 65 and older in the workforce, according the Bureau of Labor Statistics, are employed in the service, retail, manufacturing, and leisure and hospitality sectors. The Insight Report survey indicates 53% of respondents actively searching for service businesses to buy, with an additional 27% expressing a preference for retail opportunities. The overlap suggests that there is a wealth of opportunities for both sellers and buyers within these demographic-driven business sectors.
The retirement landscape is undergoing a transformation driven by the increasing involvement of retirees in the business-for-sale marketplace. Retiring baby boomer business owners and retirees in search of entrepreneurial opportunities are coming together, influencing and shaping the small business economy. To ensure a comfortable retirement, small business owners should start planning early by putting the final touches on exit strategies and adapting to the evolving trends in the marketplace.