Why an Ageing Population May Affect the Sale of Your Business

by 30th of March, 2016

After the second World War, hundreds of couples began to procreate, creating a significant spike in new births over the late '40s and early '50s. Decades on, the baby boom has led to an overrepresentation of retirees and a consequential drop in the eligible working population. This is an issue that affects many developed countries including Australia. However, while the ageing population will add stress to the economy, it also opens up many opportunities, especially for business trade.

According to Kimberly Deas, business transfer specialist for US firm Murphy Business & Financial Corporation, the retirement of baby boomers will be a key trend in business over 2016.

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This population segment is now between 62 and 70 years old. At the moment, the pension age in Australia is 65, so as baby boomer business owners enter their retirement years, this will likely create an influx of business sales in the near future.

"This could flood the market with businesses for sale and drastically devalue the businesses," said Ms Deas.

The impact of increased trade

The California Association of Business Brokers (CABB) suggests that these soon-to-retire business owners will be exchanging around US$10 trillion worth of assets over the coming two decades in America alone. Whether they are handing down the reigns to family members or selling up to new owners, this is not the only prediction.

The CABB also predicts that baby boomers will be an increasing market for business buying. Many have never been business owners, but with a career under their belt, they have the capital and skills behind them to invest and take full command of the final years of their working life.

Ms Deas provided some practical implication for what this could mean for prospective business sellers and buyers.

"If a business owner is thinking about selling, […] the longer they wait, the more competition there will be."

If you have been considering selling your business, now could be the time to take action.

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