Who will Own a Business in the Future
On Sunday May 22, 2016, Fareed Zakaria, in one of his segments on his show on CNN called GPS or Global Public Square asked the question why the number of new companies in the last 6 years is declining.
Fareed’s observations included too much regulation stifling innovation, credit being hard to get, the movement of jobs to lower cost countries (which you would think paradoxically would encourage new innovations) or the generations after the Baby Boomers being more focused on college and university education to get a job than an interest in starting or running their own company.
Fareed also touched on the question of the younger generations being more risk adverse, which I personally think is much of the root cause. The younger generations choose to get a degree or spend years at college and university, unlike the Baby Boomer generation that said we are anti-establishment and we’d work it out; that is, we didn’t need anyone to tell us what to do or how to think.
Demographics of US Small Business Buyers and Sellers.
At the beginning of May, 2016, BizBuySell published an article called “The Demographics of US Small Business Buyers and Sellers.”
The study surveyed more than 3,000 current business owners and prospective buyers to compare demographics, motivations and more.
The study found that while small business owners getting ready to sell are still mostly white men over 50 years old (Baby Boomers), the next generation of owners are an increasingly young, more diverse group.
The findings also uncovered:
- Small business ownership runs in the family. 55% of sellers have a parent or grandparent that owned a small business.
- Buyers want to get out of corporate America. The number one motivation for purchasing a small business is the chance to be your own boss, cited by 63% of all buyers.
- About 49 percent of 18 to 29 year-old millennial buyers identify as a minority, compared to just 19 percent of buyers 50 or older.
- Veterans show interest in small business ownership. 12% of sellers and almost 10% of buyers are veterans. More than one-third (39%) of veteran buyers intend to use military loans to make their small business dreams a reality. In fact, I’m currently working with a Military Vet that is able to buy a business with a downpayment of 5%, a seller’s note of 5% and the balance funded by an SBA Military Vets loan. (If you are a Military Vet and want more details, give me a call or send me an email.)
- Few female business owners. Just 22% of current business owners, and potential business buyers are women.
If you would like to see the full report from BizBuySell, simply click this link.. It’s full of data, graphics, charts and analysis.
Do you see yourself as a future business owner?
For additional information, please visit my website Business valuation.
For more immediate help, please send me an email to Andrew Rogerson or give me a call at (916) 570-2674.