When you hear “startup”, you might think of the millions of entrepreneurs who have founded new businesses over the past few years. But these are mostly freelancers, contractors and people with full-time jobs who can accommodate a side gig. The real startup story is quietly happening elsewhere: trillions of dollars of wealth are slowly being transferred to a younger generation by boomers selling their businesses to those looking to build their own.
According to a new report from BizBuySell, a business brokerage and research site, the number of small businesses being sold has not only recovered to pre-pandemic levels, but is quickly rising. And the market for would-be entrepreneurs is hot. Business owners who sold their companies in the second quarter of this year are getting 20% higher prices than those who sold their businesses the same time last year.
Boomers are selling at a furious pace and they’re just getting started. This shouldn’t come as a huge surprise. According to the US Small Business Administration, more than half of the nation’s small-business owners are over the age of 50, and approximately 21% of the US population were born before 1964. As of February 2024, according to one study, baby boomers owned about 51% of the privately held businesses in the United States, which is about 3m businesses valued at $10tn.
That’s not handing anything over. They’re going for one last big payout after a lifetime of exploitation.
They have their real estate portfolio that they rent at exorbitant prices, or sell at massive mark ups because they got into the market at sane levels and contributed to the feeding frenzy that has led to today’s unaffordable housing.
They strung their employees on, taking the increased profits from inflation without paying their employees enough to keep up.
And now they’re selling their small businesses to those same employees at prices that practically guarantee they will be unable to keep up. Because even though they have all the wealth that they’ve accumulated from a life of exploitation, they deserve to ride off into the sunset with a saddlebag stuffed with gold.
