Does the 'Silver Wave' Help or Hinder your Business Sale?

Hey ,

This week we’re celebrating reaching over 2500 subscribers! Thank you so much for your support and reading our content.

In business, as much as we can improve our individual situation, we are all influenced by macro trends in the economy and society, and must position ourselves accordingly in order to keep our competitive edge.

Roughly 40% of all businesses in the USA are owned by the ‘Baby Boomer’ generation (born 1946-1964) and these people are now retiring in droves as they approach their 70’s and 80’s. As a business owner looking to exit, is this good news for you or not? Let’s find out.

The Good, The Bad, and The Ugly

The Good News: There’s a whole new market interested in your business.

There’s been a massive new movement of small business acquirers both at the institutional level and the personal investor level. These people are aware of the opportunities, been educated about how to acquire businesses, and are ready to execute, from first-time entrepreneurs to search funds and private equity.

The Bad News: Financing markets have been moderately shrinking since 2021.

Capital markets aren’t what they were in 2021. Higher interest rates, stricter underwriting, and tighter debt markets can mean buyers struggle to finance deals without creative structures or seller concessions. However there’s still an abundance of capital at the moment, so even if other sellers have to sweeten the deal, you won’t have to if you turn your business into a strategic asset emphasizing a solid MOAT, as we’ve discussed in other issues. If you’re unique, you’ll still be able to get all cash deals. That being said, capital will probably continue to tighten as retiring cohorts put their funds into lower risk investments, so it will be much easier to get a great deal now than in a few years.

The Ugly News: There will probably be more supply than demand in business sales by 2029. To turn this into an advantage, you yourself could be the buyer taking over smaller competitors in exchange for equity, then selling the larger business to private equity now that the combined entity has a higher profile and is therefore much easier to sell.

Simply put, just like in sales and growth, the most creative and innovative will succeed in getting an exit event. Don’t leave exit planning to the last moment like most entrepreneurs do, prepare thoroughly now so you’ll have an easy time later. Sale preparation will always be worth it anyway since it will make your business more efficient and easier to manage.

To celebrate our subscriber milestone, check out this quick survey used by PE firms, investors, and strategic buyers to figure out how sellable a business is before making an offer.

It only takes a minute and gives you a real sense of where you stand.

One of our readers took the survey and found out their business was exit-ready. Within 24 hours, they were matched with a private buyer.

Here’s to your success,

Unlocking Wealth Weekly Team

P.S. On Saturday, we will send out a ten page research report going into further detail about the “Silver Wave” and if it will help or hurt your exit planning.