Boomer owned businesses are thriving, as 2.3 million small businesses are owned by their generation. Almost 40% have been in operation for over ten years, and 75% are currently profitable. Baby boomers account for 40% of small business and franchise ownership in the US, with the top industries being services, retail, construction, and food. Americans rely on Boomer-owned businesses to succeed, as they both employ and supply millions of people annually. Because of this significant impact, many people are worried about what will happen when these business owners retire.
Millennials Are Less Likely To Take Over The Family Business
Studies show that millennials are less likely to take over the family business. This is due to a variety of reasons, but mainly because there are now a wide array of career choices for them that never existed for their Boomer parents.
Almost 60% of small business owners have no transition or succession plan, but 75% say this is because they enjoy running their company and do not plan to let go of it anytime soon. Despite these wishes, many Boomers will need to sell their business to fund their retirement. 45% of Boomers have no retirement savings at all, and the cost of long term care has grown by 60% since 2004.
The Great Wealth Transfer
It is predicted that by 2045, Baby Boomers will sell or pass on an estimated $72.6 trillion in wealth. This has been dubbed The Great Wealth Transfer, as millions of children will inherit assets from their Boomer parents in the near future.
This collective inheritance is expected to transform young consumers into buyers of big ticket items, real estate investors, and important clientele for financial advisors and banks. Home ownership will also be a variable during this transfer, as its impact is yet to be observed for the future generations.
The greatest wealth transfer in history is underway, leaving many wondering what the future of business ownership holds.