It’s been called the Silver Tsunami. That’s the wave of Baby Boomers who are ready to sell their businesses and move to the next stage of their lives. Close behind them is Gen X.
Did you know: “73% of the privately held companies in the US will transition in the next 10 years equating to a $14 trillion opportunity? That 57% BOOMERS and 38% Generation X said they wanted to exit within the next 5 years, representing a $9 trillion opportunity?” So says the State of the Institute survey just released by the Exit Planning Institute.
That’s a lot of sellers and a huge opportunity to unlock generational wealth.
So, who’s buying?
Millennials and Gen-Y are most likely to buy these businesses, particularly in the service sector. They are seeking stable, recession-resistant businesses. turnkey operations with few employees or automated businesses are increasingly appealing, says BizBuySell’s 2024 Insight Report.
In the franchise space, the Gen-Y or Millennial cohort (ages 29-44 in 2025) is growing rapidly in share, and in 2021 was the second largest generation of future franchise owners at 24.7%, says the Franchise Insights blog.
These Gen-Y or Millennial buyers want something very different from what many baby boomer and older Gen Xers business owners are prepared to offer.
Of course they are looking for proven records and steady cash flow.
And they also put a premium on brand recognition, built-in customer and vendor relationships and reoccurring revenue streams.
“Businesses that are selling were relevant 30, 40 years ago. And if those businesses have not evolved, and if they don’t continue to evolve, they won’t have a business to sell,” says Van Daughtry, president of Van Daughtry Consulting, Raleigh, NC.
“As a seller, you have to think of the next generation. Who is going to buy your business and what will make it appealing for the younger generations who are looking to buy and get into business?” He asks.
Attracting that next generation buyer will make the difference between a successful exit and a well-funded retirement or simply shutting the doors after 30 or 40 years of hard work and walking away with nothing.
Sadly, that is the case with too many baby boomer business owners. “About 75% of the businesses that go to market today are not going to find a buyer,” says Neal Isaacs, managing partner of VR Business Brokers, Raleigh, N.C.
North Carolina Employee Ownership Center (NCEOC), calls it Crisis #1 in North Carolina. It impacts 78,757 businesses with owners over 55 representing a revenue value of $165B.
“The vast majority (over 85%) of NC business owners do not have a succession plan in place, and many are finding it hard to find a buyer when they are ready to sell. As a result, some of these companies will quietly close down,” NCEOC says.
What Do Next Gen Buyers Want?
Preparing to sell your business to the next generation of buyers means taking a hard look at how the business presents itself to the market. In real estate it is called curb appeal. It is equally applicable to established companies looking to get the highest valuation for their business.
A buyer expects profitability and a strong existing customer base. Two keys here are:
- Broad Customer Diversification – Ensuring that the business’ customer base is diversified reduces the risk of dependency on a few key clients. Especially if those clients are tied to a strong relationship with the business owner.
- Develop Recurring Revenue Models – A well designed and implemented recurring revenue model such as subscription or retainer models provide a dependable cash flow forecast that reduces the unpredictability. This is especially vital in businesses with seasonal challenges like landscapers, pool cleaning or snow removal.
Next Gen buyers are also looking for:
A modern look and feel for the business “storefront.” Whether that business on the street corner, in manufacturing, construction, retail or wholesale or a service business, next gen buyers want it to look and feel modern in its branding, packaging and positioning to the customer.
The first place to start is with your digital storefront: your website. If your website is more than five years old, or if it is what is commonly known as a brochure website (lots of text, stock photos and team mug shots), a refresh can increase your visibility by 62%, as 38% of web visitors bounced away from an out-of-date or unattractive website, says Forbes.
Online marketing. Regardless of the physical location, next gen buyers want that storefront to sparkle online with an eCommerce sales capability whenever possible.
A unique market position. “Strong businesses are well differentiated in the marketplace. They offer products or services that are distinct from the competition and enjoy a strong market position as a result,” says Curtis Kroeker, “What Business Buyers Want,” INC. Magazine.
A digital marketing strategy. These digital native business buyers are looking to connect with prospects online through social media, digital ads, videos and mobile marketing. Still advertising with coupon books and postcards? That’s a non-starter with this crowd. When you can show buyers a digital marketing strategy, you reduce the risk the buyer is taking to expand your customer base. And that’s worth a higher valuation.
Why is having a digital first turnkey business so important to selling your business?
In a word — competition.
“Business sellers are facing a smaller pool of buyers. The big question they face is how do you stand out? How can I make myself unique in a crowded market?” says Mike Leannah, principal of Business Value Strategies, Raleigh, NC.
“I tell my clients that the decisions you and I make when we position this business will determine the size of the buyer pool. The best-case scenario is when you have many people out there, because having only one, that’s finding the needle in haystack, but if you’ve positioned your business to be as attractive to as many people as possible, then the odds go up that will sell and it will sell for a good market price,” says Daughtry.
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