Collaborative post – may contain affiliate links
By now, you’ve probably heard the trope that millennials can’t afford anything valuable on their own, be it a car or a house. While there is some truth to this, there’s no denying the massive business potential millennials have. This passionate, collaborative generation has come of age in a most exciting time, mainly one where the formerly-reigning baby boomers are beginning to close up shop–literally.
As the baby boomers begin to enter their golden years, a question of the small business owners among this group is going to transition out of ownership. A 2016 survey shows that 54% of small business owners in the United States plan to close their business in the next ten years. This number comes on top of the 72% who have no real exit plan for closing, which leaves a big question as to who will take their places.
However, what looks like an impending economic crisis is a surprisingly serendipitous business opportunity. One of today’s rising entrepreneurial trends is millennials buying baby boomer-owned businesses. The exciting thing is there are a few massive advantages to this.
First, let’s set the record straight about this fascinating generation of youngsters. Financially, they’re a bit hit and miss. Among all the living generations, millennials are most likely to default on a credit card, with 3.6% of millennial credit card accounts are delinquent 90 days or more. However, millennials also have the most commercial and consumer credit reports available out of all the generations. These comprehensive credit reports can work to millennials’ advantage when looking to buy a small business.
Furthermore, millennials are much more diverse than their predecessors. For example, 87% of baby boomers who acquired small businesses identified as White, compared to a much lower 48% among millennials. This increasing diversity means millennial business owners will be able to appeal to a broader demographic, especially among typically-underrepresented ethnicities like Hispanics, Asians, Pacific Islanders, and African-Americans. A more diverse and inclusive market is likely to produce substantial economic results.
But it’s hard to deny that the prospect of starting a business from the ground up is overwhelming for someone of any age. If you’re a millennial who wants to step into the business world with relative security, consider buying a baby boomer-owned small business. For a generation as saddled with debt as millennials, buying an already-established business usually means you won’t have to worry about any more outstanding debts. Moreover, an established company likely has the reputation, credibility, and proven business models that most startups can’t match in their early days. A bonus is that the old owner will usually advise you and teach you how to run a small business, specifically theirs so that you can make fewer missteps and keep boosting your revenue.
If this business venture sounds promising to you, you’re in good company. Many websites now exist to show companies available for purchase, so you’ll never be in short supply of an opportunity. Just make sure to research all companies extensively, meet face to face with the owners to get a better idea of how you two will gel, and of course, don’t sign that dotted line until you’re sure you have the resources and motivation to give it your best shot.