by Mary Ellen Biery
Called by at least one group of authors “The $10 Trillion Opportunity,” a lot has been made of the deal activity expected to arise from baby boomers retiring or otherwise exiting from their businesses.
Estimates of how many privately held businesses could change hands, and of what kind of value they represent, vary. Data from the U.S. Small Business Administration shows that nearly 52 percent of business owners are over age 50 — a larger share of people nearing retirement age than in the employment population at large.
One market researcher estimates as many as 3.8 million firms could hit the market over the next 20 years. A recent survey by Pepperdine University found that 64 percent of business owners planned to transfer their ownership interests within the next decade.
Whatever the estimate, it’s safe to say that many business owners will fail to capture the full value of their hard work through an ownership transfer. Business broker and website author Jim Stauder estimates some $3 trillion in value – or most of the opportunity for owners of small businesses (those with 49 or fewer employees) — will be left on the table due to owners’ failure to plan their business exits. […]