How Retiring Baby Boomers are Driving Small Business Sales

100029946-shopper_5_gettyp.240x160Walt Popcock, a small business owner, dreamed of selling his business and traveling around the US in a motorhome. After successfully selling for the full asking price this April, he’ll be able to do just that. Popcock and numerous other baby boomers are fueling the trend of retirees who are seeking professional services to prepare and sell their businesses in order to capitalize on the improving economy.

The Associated Press wrote about the recent spike of listings in the small business marketplace in Retiring Boomers Driving Sales of Small Businesses. In the first three months of 2013, the number of closed business sales jumped 56 percent from the same time in 2012 as reported by BizBuySell, while retirement was the No. 1 contributor to business sales in the fourth quarter of last year and the first quarter of 2013, according to a survey by Pepperdine University and two trade groups, the IBBA and M&A Source.

Even if baby boomers aren’t ready to cash in just yet, seeking advice from brokers in preparation for the transition is something that was also reported to have increased. Business owners who are wary of braving another economic downturn are planning ahead in order to streamline the sales process. “It was almost like a light switch went on in January,” says Michael Schuster, of World Business Brokers in Miami. Schuster reported that three-quarters of the increase in potential seller activity has been from baby boomers.

Small business sales

In this photo taken Tuesday, May 14, 2013, Roberta Bonoff, owner of Creative Kidstuff, a toy store chain, poses at the store in St. Paul, Minn. The toy retailer based in Minneapolis, just expanded by buying a 26-year-old online and catalog toy retailer, Sensational Beginnings. Bonoff said the owner was tired and ready to sell. (AP Photo/Jim Mone)

For businesses looking to expand into new markets, the increase in businesses for sale has created more opportunity for growth. Bob Balaban, managing director at a Denver based investment bank, projects that “Trillions of dollars of business value are going to change hands in the next 10 to 20 years.”  Strategic acquisitions by companies who otherwise haven’t been able to expand will contribute to that trend as they’re in a position now to diversify quickly.

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Retiring boomers driving sales of small businesses

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