Washington - Baby boomers, the generation born immediately following
World War II, are getting old. Many of them are small business owners and, over
the next few years, are likely looking to wind things down, play a little golf,
move to Florida,
spend more time with the grandchildren and exit their businesses.
Some are calling it the "Silver Tsunami" a massive
shift in ownership of private companies. That could be very good for the
boomers. But it may not be so good for their employees.
According to recent research done by Project Equity, a non-profit
group, there are about 2.34 million businesses owned by this generation that
generates more than $5 billion in sales and employs 24.7 million people - about
one-sixth of all US workers.
As the current owners look to exit, their options are few:
sell (six out of 10 business owners plan to do this in the next decade), hand
the company to their kids, or close it down. Unfortunately, many of them may be
forced to go with the third option and close up shop. Why?
According to Project Equity, many small business owners do
not have succession plans - and because of this they're putting their employees
at risk. As a small business owner I empathize - we tend not to think ahead.
This leaves us with fewer choices when it comes time to retire. Without
succession planning, many of these businesses "will just quietly close
down and go away," says Project Equity's co-founder Alison Lingane.
Lingane says a third of business owners in this generation
who want to sell are having a "hard time finding a buyer" and many
are being bought out by out-of-area buyers that are consolidating ownership and
wealth. The result: the jobs of all of their employees are at risk, regardless
of their industry.
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The organisation is working to raise awareness of the issue.
It is urging local governments to measure the impact on their tax base by using
business license data to track how many businesses are more than 15, 20 or 25
years old so that local business and political leaders can get involved.
The most impactful solution is encouraging business owners
to think ahead and consider transferring ownership of their companies to their
employees.
"Since today most family-owned businesses don't have
somebody in the next generation who wants to take over, employee ownership is
one of the best ways to keep thriving businesses locally rooted into the next
generation," said Mark Quinn, District Director, US Small Business
Administration.