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A shift is coming in the business world. If you are a business owner—or want to be—you might be wondering how the baby boomer generation will affect your business over the next 10 years.
The answer is that it will affect your business significantly.
The baby boomer generation is getting close to retirement age. When the generation’s business owners begin to retire, there will be great opportunities for the transfer of ownership.
Business owners and investors interested in acquiring an existing business could take advantage of this upcoming change. A Small Business Administration (SBA) loan may be the way you are able to purchase and grow a business.
Baby Boomers and the Nearing Shift
Baby boomers—people born between 1946 and 1964—are largely successful in small business ownership. The oldest in this generation are now 79 years old, and the youngest are now 64.
Many businesses are owned by baby boomers. For example, nearly 65% of law firms are owned by them. In other industries, baby boomers also make up a significant percentage of small business owners.
The shift over the next decade will happen because baby boomers will retire and sell their businesses, and people who are strategic could capitalize on this chance to acquire businesses that already run well.
Why Acquire a Business Instead of Starting One?
Starting a new business is exciting, but it is also time-consuming, expensive, and risky. Purchasing an existing business instead allows you to join a business that is already profitable and successful.
More reasons why acquiring a business is easier—and arguably better—than starting one include:
- An established revenue stream
- A workforce that is already trained
- An existing network of clients and suppliers
- An opportunity to bring new ideas to the business and help it grow
For these reasons, purchasing a business from a baby boomer who is retiring within the next decade could be more efficient than starting one yourself.
How an SBA Loan Could Help
Buying a business from a retiring baby boomer within the next 10 years is smart, but doing so requires capital. This is where an SBA loan could be useful.
SBA loans are popular for several reasons, including their:
- Fixed interest rates
- Low down payments
- Long repayment terms
The SBA 7(a) loan program is the most commonly used for business acquisitions. Loan proceeds can be used flexibly and can include the business purchase price, working capital, real estate, equipment, and more.
When to Purchase in the Next Decade
When in the next decade is the best time to purchase a business? Baby boomers will be retiring each year over the next decade, so there is no definitive answer on when exactly the best time to purchase a business is.
However, if you want to acquire a business within the next decade, it’s not too early to start planning. Prepare by doing the following:
- Conduct market research to identify an industry with high baby boomer ownership
- Improve your credit score
- Maintain organized financial and business records
- Save for a down payment
- Discuss goals with professionals at Business Funding Group (BFG)
Taking these steps can help ensure you’re ready when you get the opportunity to purchase a business.
Leverage the Baby Boomer Shift With Smart Business Acquisition Planning
How the baby boomer generation will affect your business over the next 10 years is up to you, at least in part. It depends on whether you choose to take advantage of this opportunity to benefit from the baby boomer retirement wave.
BFG is a professional loan packaging firm with decades of experience helping small business owners like you get SBA loans. We handle the paperwork and stay aware of deadlines, so you can focus on running and growing your business.
If you are a current business owner and want to leverage the upcoming shift in business ownership, now is the time to position yourself to acquire companies owned by successful baby boomers. An SBA loan could make this possible due to its affordable, manageable terms.
Contact BFG today to discuss the business acquisition process and how you can best prepare for a business investment.