When will the Baby Boomers Business Sale Tsunami Happen?
For the past 10 years, we’ve been told that a tsunami of businesses for sale will hit the market as Baby Boomers reach retirement age. But the suggestion that we will experience the largest transfer of business ownership ever in Australia over the next few years, hitting a peak in 2028, is questionable, according to business sales expert, Zoran Sarabaca.
The founder of Xcllusive Business Sales busted the Baby Boomer myth, saying it was more of a ripple than a tsunami.
“Using figures from the ABS, I have plotted Baby Boomer retirement from 2011 until 2028, as well as studying the reasons why people sell their business,” said Zoran.
“2011 is a key date as that is when the first Baby Boomers retired. Between 2011 and the predicted peak in 2028, retirement is predicted to increase 134%, so you may think that indicates a tsunami of businesses for sale."
“However, there are four reasons why that isn’t necessarily the case."
“Firstly, not every Baby Boomer owns a business and secondly, not every Baby Boomer who has owned a business still has it. Thirdly, selling is not the only way to exit a business, so it may have been handed down to a family member or disposed of in other ways.
“The biggest reason, however, is that the segment of people selling a business due to retirement is much smaller than you think,” said Zoran.
“When we look at the reasons why people sell businesses, retirement comes in under 40%. That means 60% of sellers are selling for other reasons. So, even when you factor in the increase in Baby Boomers retiring, the best case you’re looking at is an 8% increase between now and 2028. At just 1% growth per year, that’s definitely not a tsunami!”
Zoran believes the Baby Boomer retirement myth has caused business owners and sellers concern over supply and demand.
“Too many people believe the myth and are worried. The fact is, you should sell your business when you need to or want to and stop worrying about supply and demand.”
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About the author
CEO Bsale Australia
Vanessa is the current manager and CEO of Bsale Australia. Over the past 11 years as a business owner, she understands what it takes to grow a ...