The Boomer Business Bomb
Baby Boomers own 40% of all U.S. small businesses and franchises. Here is what happens to America as the generations turn over.
MBA Stack · Infographic
01
Boomer-owned businesses are thriving
2.3Msmall businesses owned by Baby Boomers
35%have operated for 10+ years
3 in 4are currently profitable
25Mpeople they employ
10,000
Baby Boomers retire every single day.
03
What happens when the owners retire?
58%of small-business owners have no succession plan
75%of them say it’s because they still enjoy running it
45%of Boomers have no retirement savings at all
Why selling is harder than it looks
- Retirement is getting more expensiveHealthcare for a retired couple has climbed 88% over 20 years, to about $300,000. Long-term care costs are up as much as 60% since 2004.
- Most firms are too small for private equityIn 2018, PE firms sat on $600B of uninvested capital — a 34% jump from a decade earlier — but rarely look at Main Street businesses.
- The M&A market whipsawedGlobal M&A fell 16% in 2019 to its lowest since 2016, then U.S. deals rebounded 55% in 2021 to a record $2.9 trillion.
- Millennials rarely take over the family businessMore career options, a desire for flexibility, and a pull toward tech, healthcare, media, and operations.
Golden years, golden opportunity
- Established, profitable businesses with loyal local customers
- Buying one can beat starting from scratch
- Owners want a reliable successor who keeps their staff
$72.6T
in wealth Boomers will sell or pass on by 2045 — 2× a decade ago, and 3× U.S. GDP.
05
The great wealth transfer
$68Texpected to pass to adult children
$11.9Tto charities — 14% of the total
$220Kaverage per Gen X / Millennial
What that inheritance creates
- A wave of new real-estate investors
- Buyers for big-ticket items
- Fresh clientele for financial advisors and banks
