Last month we discussed about Baby Boomers and how this demographic is influencing and will continue to affect business sales for the foreseeable future. We discussed when would be the best time for a Baby Boomer owner to consider selling a business in order to get the most return on his or her invested time and money.
However, another interesting fact is that Baby Boomers are also behind many business purchases. While some of the Boomers born in the earliest years of this population wave (1946 to 1964) have already reached retirement age, the ones on the tail end of the wave will not for almost another twenty years. These Boomers still have to feed their families and do meaningful work, and many of them have transitioned out of the corporate world either by downsizing or by inclination and are open to buying a business as a second or third career choice.
Every generation was affected by the Great Recession and suffered losses, either in asset values or employment prospects, and Boomers were no exception. Many of them had spent decades loyal to their employers and are no longer idealistic about company loyalty to their employees and so are more willing than they’ve ever been to strike out on their own and make a calculated bet on their own success.
So why is now a great time for Boomers to make a business investment? Well, for the same reasons it’s a good time for everyone else to buy. Right now in West Michigan and many other parts of the country bankers are loosening lending standards in this more competitive lending environment so it’s easier to get financing to purchase a business. Banks are, of course, more interested in lending to people with solid credit histories and, in general, Baby Boomers have more capital to invest than people in other age groups. Some will see inheritance money come their way and will choose to invest in themselves over the stock market.
Also, there are a number of great opportunities available right now from older Boomers who are ready to retire. We at Calder Capital see them all the time. This greater availability means a buyer can afford to be selective right now and wait for a business investment that better meets his needs.
With increased longevity, Boomers are looking at a much lengthier retirement than their grandparents had. Considering this, two things make a difference in their deciding to embark on a second career as a business owner: a desire to remain active, and today’s less attractive retirement package. But whether out of necessity or personal ambition, a large percentage of Boomers will be drawn towards entrepreneurship in this later life phase.
If you are a Baby Boomer looking to find the right opportunity for investment, Calder Capital would love to talk to you to get an idea for how your needs and the business market in West Michigan could intersect.
Please visit our current opportunities page or contact us: