Are You Ready to Sell to the Next Generation?

It’s been called the Silver Tsunami. That’s the number of Baby Boomers who are ready to sell their businesses and move to the next stage of their lives.?

According to the North Carolina Employee Ownership Center (NCEOC), baby boomers own half of the privately held businesses with employees in the state: 78,757 business with owners aged 55+ providing 879,000 jobs and putting $165 billion into the local economy. That’s a lot of economic wealth and prosperity for the North Carolina region.

Yes, Baby boomers are selling or want to sell. But they aren’t buying. Potential buyers for these businesses are coming from the Gen X (41-56 years old), Millennial (25-40 years old) and increasing even young Gen Z (9-24 years old) entrepreneurs.

“The last few years have seen a shift from the plurality of small business owners who are Baby Boomers (41%) to those who are Gen X (46%). Right now, Millennials make up 13% of small business owners, 1% are Gen Z, or “zoomers,” says Guidant Financial in its small business trends survey for 2021.

These buyers want something very different from what many baby boomer business owners are prepared to offer.?

“Businesses that are selling were relevant 30, 40 years ago. And if those businesses have not evolved, and if they don't continue to evolve, they won't have a business to sell.

“As a seller, you have to think of the next generation. Who is going to buy your business and what will make it appealing for the younger generations who are looking to buy and get into business?” says Van Daughtry, president of Van Daughtry Consulting, Raleigh, NC.

Attracting that next generation buyer will make the difference between a successful exit and a well-funded retirement or simply shutting the doors after 30 or 40 years of hard work and walking away with nothing.

Sadly, that is the case with too many baby boomer business owners. “About 75% of the businesses that go to market today are not going to find a buyer,” says Neal Isaacs, managing partner of VR Business Brokers, Raleigh, N.C.

Isaacs’ statement is backed up the NCEOC which notes that 1 in 3 business owners over 50 have a hard time finding a buyer: “The vast majority (over 85%) of NC business owners do not have a succession plan in place, and many are finding it hard to find a buyer when they are ready to sell. As a result, some of these companies will quietly close down.”

What Do Next Gen Buyers Want?

Preparing to sell your business to the next generation of buyers means taking a hard look at how the business presents itself to the market. In real estate it is called curb appeal. It is equally applicable to established companies looking to get the highest valuation for their business.

A buyer expects profitability and a strong existing customer base. That’s the starting point.

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Next Gen buyers are also looking for:

1. A modern look and feel for the business “storefront.” Whether that business on the street corner, in manufacturing, construction, retail or wholesale or a service business, next gen buyers want it to look and feel modern in its branding, packaging and positioning to the customer.
2. ?The first place to start is with your digital storefront: your website. If your website is more than five years old, or if it is what is commonly known as a brochure website (lots of text, stock photos and team mug shots), a refresh can increase your visibility by 62%, as 38% of web visitors bounced away from an out-of-date or unattractive website, says Forbes.??
3. Online marketing. Regardless of the physical location, next gen buyers want that storefront to sparkle online with an eCommerce sales capability whenever possible.
4. A unique market position. “Strong businesses are well differentiated in the marketplace. They offer products or services that are distinct from the competition and enjoy a strong market position as a result,” says Curtis Kroeker, “What Business Buyers Want,” INC. Magazine.
5. A digital marketing strategy.?These digital native business buyers are looking to connect with prospects online through social media, digital ads, videos and mobile marketing. Still advertising with coupon books and postcards? That’s a non-starter with this crowd. When you can show buyers a digital marketing strategy, you reduce the risk the buyer is taking to expand your customer base. And that’s worth a higher valuation.

Why is having a digital first turnkey business so important to selling your business??

In a word -- competition. “Business sellers are facing a smaller pool of buyers. The big question they face is how do you stand out? How can I make myself unique in a crowded market?” says Mike Leannah, principal of Business Value Strategies, Raleigh, NC.

“I tell my clients that the decisions you and I make when we position this business will determine the size of the buyer pull. The best-case scenario is when you have many people out there, because having only one, that's finding the needle in haystack, but if you've positioned your business to be as attractive to as many people as possible, then the odds go up that will sell and it will sell for a good market price,” says Daughtry.?

Octain Growth Systems specializes in helping business owners increase the value of their businesses prior to sale by creating a modern brand, website and digital marketing strategy in 90 days or less.?

Want to learn more about our 90 days to Higher Market Value program for successful business exits to next gen buyers at top dollar??GO HERE NOW