As America’s largest generational cohort approaches retirement, the country is bracing for an unprecedented transfer of wealth and businesses. Baby boomers own 51% of the nation’s small businesses. According to one of BizBuySell’s insight reports, over 47% of business owners cite retirement as their reason for selling, and 59% say they already have an exit plan in place. Another study states that 3 million baby-boomer-owned enterprises are collectively worth nearly $10 trillion. With thousands of boomers expected to retire every day for the next several years, a massive generational shift is expected in the U.S. business landscape.
Given the majority have an exit plan, that still leaves a substantial portion unprepared for the complexities of selling a business. And according to award-winning business broker and veteran Douglas R. Batts, MBA, time is of the essence. “If you’re looking to retire in the next few years, you need to start planning now, ideally two to three years in advance,” says Batts, who brings over 17 years of experience. “Too often, I see small business owners approach at the last minute, expecting to sell quickly without having done any preparation. That’s the biggest mistake.”
Batts explains that many owners have inflated expectations about what their business is worth. This disconnect can become a major stumbling block unless addressed early. “A lot of business owners think their company is worth xyz, but when we analyze the books, it’s often not even close,” says Batts. “If we have a couple of years’ runway, we can give them actionable recommendations, such as operational changes, financial clean-ups, process improvements, etc., that can increase their business value and help them hit that target by retirement.”
The key, Batts emphasizes, is working with a qualified broker early. “That gives us, advisors, time to position the business properly in the market, get the financials in order, and present it in the best possible light to prospective buyers.”
With a flood of businesses hitting the market, Batts says that adapting to the new volume through technological innovation has become imperative. He further states, “AI helps us identify potential leads, for example, scraping the internet for contact information of IT companies if we want to target that sector. We also use AI to help generate a confidential information memorandum (CIM), which is essentially a comprehensive pitch deck for buyers.” By leveraging AI for data collection and drafting, Batts, along with his team, can move faster and more efficiently while maintaining the high standards of confidentiality expected in major business transactions.
With the industry known for being largely unregulated in most states, Batts urges sellers to proceed with caution when choosing who to trust with their business exit. He further says, “Look for brokers who are certified, who have a track record of successful transactions, and who demonstrate professionalism and ethics.”
He recommends using online broker directories and validation websites that list credentials, experience, and even current and sold listings. “You can look up a broker and see the full profile: who they’ve worked with, what they’ve sold, and what they’re currently representing,” he says. “It’s a great way for owners to start narrowing down who they feel comfortable working with.”
Despite the challenges, Douglas Batts sees the Silver Tsunami as an enormous opportunity for both sellers and buyers, especially millennials who are inheriting wealth and looking to invest in proven business models. “This is a once-in-a-generation shift in ownership. It’s a huge wealth transfer, and those who are prepared are going to benefit the most,” he says. “The key is to start the conversation now. If you wait until you’re ready to retire, you may have already missed your window to maximize the value of your business.”
For boomers looking to secure a comfortable retirement and ensure their business legacy continues, the message from this expert is clear: “Get your books in order, vet your broker, and start planning today.”
Investing involves risk and your investment may lose value. Past performance gives no indication of future results. These statements do not constitute and cannot replace investment advice.
