Despite interest rates being at a 20-year high, sales of small businesses are strong, and may continue for years

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.

  • hark@lemmy.world
    20·
    4 months ago

    I know media want to hype up a “great wealth transfer” between generations, but the consolidation of wealth continues regardless of generation. This won’t change the fortunes of the vast majority of millennials.

      • Ghostalmedia@lemmy.worldEnglish
        4·
        4 months ago

        The alternatives are usually closing down and liquidating, or selling to a competitor.

        If the assets are worth more than the customers, liquidate. If the customers are worth more than the assets, trying to sell to a new owner or a competitor.

        • DigitalDilemma@lemmy.mlEnglish
          1·
          4 months ago

          Plenty of people don’t have a family to transfer a business to, or if they do, that family don’t want to be doing the same job their parents did.

  • mrcleanup@lemmy.world
    3·
    4 months ago

    “Boomers are cashing out their businesses, leaving hopefully millennials deep in business debt.”

    Either that or they already had money and it really isn’t a wealth transfer.