Buy instead of build – ambitious millennials overlooking this form of entrepreneurship
By: Eric Hughey, Rebeka Dickerson of the GenWhy Leaders Podcast, and Dave Swob of Summit Exit Advisors
Approximately 10,000 baby boomers are retiring every day for the next 10 or more years, and this will create an enormous amount of opportunity for millennials in the corporate and entrepreneurial sectors. Young professionals who have aspirations to start their own business can cut their learning curve and financial risk in half by buying a profitable and operational business from baby boomers, rather than starting one from scratch.
Summit Exit Advisors is a company founded on the idea of helping baby boomers exit their businesses. It gives specialized guidance to help owners transition and finish their career well.
The GenWhy Leaders Podcast teamed up with Summit Exit Advisors in a recent podcast episode to discuss why and how millennials should take on pre-owned businesses.
There are currently 78 million baby boomers. Of those, baby boomers own 5.5 million of the 9 million small and medium size businesses in the United States. This creates a massive chance for millennials to come in and buy these businesses.
By taking on an already established business, millennials can learn from baby boomers and side-step a lot of mistakes and heartache that they would have experienced had they tried to start a business on their own. There is a ton of value in picking up where baby boomers left off with 30 to 50 years of operating a brand.
Though this opportunity may seem out of reach financially for many millennials, there are multiple ways to structure buy-outs. One of the most commonly used is an owner financed buyout. A seller may require a buyer to work in the business to learn the ropes while they build the skill sets needed to be successful while also building trust. This is done to help the buyer build equity over time while minimizing taxation for both parties. Millennials (and others) may not know how to go about finding a business that is for sale, but here are some tips:
Get involved in networking groups
- Connect with merger and acquisition firms, accountants, and CPAs
- Meet with business brokers
Not just anyone should take on such a responsibility, though. Millennials must have certain skills if they expect to buy a business and succeed. These skills include:
People skills – understand how each generation works and communicates and be able to mesh various working styles. Baby boomers, Gen-X’ers, Millennials, and now even some Gen-Z’ers are all working alongside each other in the current workplace.
- Leadership skills – be able to lead others well, but also be able to lead yourself well and earn respect from your colleagues and employees.
- Time management – don’t just be busy, be effective and execute consistently that drives results for your employees, your business, and your customers.
- Team building – “hire slow, fire fast” is easier said than done. But it’s a necessary step in building any successful team for the long term.
If a millennial with these skills is not taking advantage of the opportunity baby boomers are creating every day, they may be missing out on a major opportunity. We live in an era where entrepreneurs are seen as rock stars. Many millennials want to start and build their own business, but buying one could be the better play for their long term financial stability.
About the GenWhy Leaders Podcast:
The GenWhy Leaders Podcast learn why millienial leaders do what they do, what keeps them motivated, and how they have succeeded in this ever-more competitive marketplace. For more information, visit genwhyleaders.com or email genwhyleaders@gmail.com