Unless you haven’t heard by now (wink, wink), our country is preparing for a significant shift over the next 10-15 years.  While Americans are living longer than their predecessors and thus working longer into their 60’s, the older Baby Boomers are on the verge of retirement.  Once this trend begins, it will continue for the next 13-15 years at a fairly steady rate.  This group (which currently ranges in age from 48 - 63 years old) is the fastest growing generation and controls nearly $8 trillion of spending in the US. 

Last week, we had a discussion with a subject matter expert on baby boomers who provided an amazing statistic:

A June 2007 BIG Research study found that 9.5% of baby boomers with yearly household income greater than $50,000 are business owners.  There are 78 million boomers in the US x 9.5% = 7.4 million boomer business owners!!

Combine this with the statistic from ThirdAge, Inc that family owned businesses are successfully transitioned 30% of the time and we have an astounding forecast that 5 million boomer businesses will most likely be sold or dissolved by 2020.  This tidal wave of businesses for sale could create a predicament of market saturation where the supply catches up with or exceeds the demand from business buyers……..resulting in possible lower valuations of privately-held companies accompanied by longer exit cycles for business owners.

The responsibility on boomer business owners as well as their trusted advisors to initiate exit strategies today is paramount.  You can never plan the sale of your business too early.  The Family Business Institute reports that those family owned business owners who take 10 years to plan for their future successfully transition their business 90% of the time and those same successfully transitioned businesses are in existence 10 years, thereafter.  Those who quickly exit their businesses do so under poor decision making, instability, and often-times reduced valuations.

Plan today for your tomorrow.  This can start with a business valuation.  As the patriarch or matriarch of your family, it is your responsibility to do so.  Don’t let one of your most prized possessions go to waste due to an overly-saturated market of businesses for sale.