Small Business Labs

Boomers Selling Small Businesses

Forbe's article Don't Leave Money on the Table discusses aging baby boomers selling their small businesses to retire.  Interesting data point on the number of small business transactions done each year:

"Hard numbers on overall small-business sales aren't available, but small-business brokers believe that between 6,000 and 10,000 companies--most worth under $5 million--change hands every year in the U.S."

Also interesting is who is buying.  According to the article the buyers are younger boomers and older Gen Xers leaving corporate life, often not at their choice:

"a crush of new small businesses will begin hitting the market as baby boomers approach retirement age. Among the potential buyers are thousands of laid-off corporate executives looking to take a crack at entrepreneurship."

The article has lots of good advice on the sales process. 

Vocation Vacations

VocationVacations is a company that markets 1-3 day new career mentoring vacations.  For a fee, VocationVacations will let you test-drive your dream job. The company provides a mentor and hands-on experience in a wide variety of professions.  Their website says vocation vacationers will:

• work one-on-one with a personal mentor
• learn the ins and outs of your dream career
• try on your dream job lifestyle
• make valuable contacts in your field; and
• begin plotting a concrete strategy for moving from the job you have to the job you love.

The current available vacations include everything from animal therapist to sword maker to yoga studio owner.  Almost all the vocations are in small or personal businesses.  The focus also seems to be on baby boomers looking for a retirement job or a life change. 

I saw the reference to the site in an article on working in retirement on Yahoo called Retire to Your Dream Job.  Key quote from the article:

"...75% of boomers say they want to keep working (but not full-time), and more than half want to start a new career..."

These numbers, which are consistent with a wide range of boomer surveys, are why we see aging boomers starting and working for small businesses in increasing numbers over the next decade.  This is why we post on them so often.

Baby Boomer Small Business Links

Hard to keep up with all the media on boomers and small business - and there are way too many to post on.  Here are some recent boomer articles I found interesting:

Baby Boomer?  You may start a business in 2008 - syndicated article saying that according to AARP only 20% of baby boomers are planning to a traditional retirement.  Small business is a major alternative to traditional retirement. 

For baby boomers, a longer ride into the sunset - It's a good thing only 20% of boomers plan a traditional retirement, because according to the Center for Retirement Research most boomers don't have the financial resources to fund a traditional retirement. 

Trading Retirement for Something Else - another choice for non-retiring boomers is social entrepreneurship.  NY Times blog Shifting Careers on encore careers and boomer social entrepeneurship.   

12 People Who Are Changing Your Retirement - on Yahoo finance and picked up from a Wall Street Journal article.  Covers a range of people who are working on aging issues.

Confessions of a Cobol Programmer:  for those of you who aren't boomer techies, Cobol is a really old programming language that - like boomers - continues to work past retirement age.  While the article talks about a relatively young programmer, we've heard from a number of baby boomer techies they are also looking to work with older computer programs that new generations never learned. 

Gardening Industry Targets Boomers: from the Canadian post.

Edelman, The New York Times and Boomers

Boomers continue to attract a lot of attention.  The large public relations firm Edelman has started a boomer consulting practice called Boomer Insights Generation group.  The group is going to "specialize in communications marketing strategies to reach and activate Boomers."  They've also launched a Boomer blog (which, by the way, uses the exact same design elements and colors as our sister blog on Gen Y - Gen Y Labs). 

They are smart people over at Edelman.  They wouldn't be doing this if their large corporate customers weren't really interested in better understanding and reaching Boomers.

The NY Times has an article on boomers and "encore careers" in their Shifting Careers column.  It is on boomer social entrepreneurs and Civic Ventures, a firm that enables social entrepreneurship by boomers. 

We've posted a lot in the past on boomers, their growing role in small business and social entrepreneurship, and their power as consumers.  We also talked quite a bit about boomers and social entrepreneurship in our forecast report Demographics and Small Business.

Rural Gentrification and Small Business

The Yahoo division of Microsoft has an interesting article called "The New American Gentry". It talks about wealthy people and retiring baby boomers moving from cities to rurual areas in the US.  It is lifted from the Wall Street Journal.

The article does a very nice job of summarizing the rural gentrification trend, which demographers have been following for years.  Key quote on technology as a driver of this trend:

"With the Internet allowing people to work from almost anywhere, the distinction between first and second homes has become blurred."

There are several small business impacts from this broader trend:

1.  Communications technologies and the Internet increasingly allow anytime, anyplace work.  This creates opportunities for people to move to rural areas but also continue to work using virtual and telecommuting tools.   Many boomers (and others) are taking advantage of the opportunity to start new businesses.  Others are using these technologies to increase work flexibility and allow them to choose when and where they work.  Our report The Connected Entrepreneur covers these trends in more detail.

2.  The influx of relatively wealthy retiring boomers and others seeking the life style advantages of rural areas also creates a wide range of local new business opportunities.  Quote from the article:

"Affluent retirees and other high-income types have descended on these remote areas, creating new demand for amenities like interior-design stores, spas and organic markets."

In addition to high end goods and services, the incoming residents often bring businesses and/or work needs with them that require local support services. 

3.  Many of the "new american gentry" are part of the emerging buy local coalition and have a propensity to support local small businesses. 

Coincidently I was talking to business planning guru Tim Berry this week about his life in Eugene, Oregon.  Tim moved there years ago for the life style and recreational advantages the area offers.  He also moved his small business with him to Eugene.  I've posted in the past on Tim as a trend example.  He seems to have a natural knack for being a step ahead of the curve. 

Half of All Small Businesses Owners 50+ Years Old

Yahoo Finance has a special section on boomers and retirement called the new retirement.  There are multiple articles on the subject taken from several sources (Forbes, Kiplinger, etc.).  One of the articles discusses boomers starting small businesses.  Key quote:

"Since 2000, people ages 50 to 62 have been the fastest-growing group of new entrepreneurs. The 50-plus crowd now accounts for about half of all small-business owners, according to the U.S. Small Business Administration."

We've been following this trend for some time now (see The Changing Face of Entrepreneurs) and expect boomers to continue to form small businesses at increasing rates as they move through their  fifties and early sixties.

For more posts on boomers and small business, visit our boomer tag page.

Craig Newmark's Boomer Unretirement

Craig Newmark is the founder of the popular online classifieds site Craigslist. He spoke at an event I attended last week.  During the Q&A he was asked about his exit strategy for Craigslist.  His response was "death is my exit strategy."

We've posted in the past about boomers wanting to continue working well past traditional retirement age.  While Craig is likely an outlier, he is a good example of boomer's views towards retirement.

McKinsey on Aging Baby Boomers and Unretirement

Excellent article on the McKinsey Quarterly website (registration required) on aging baby boomers.  For folks that have been following demographic trends and aging boomers there really is nothing new in the article, but it does a great job of summarizing a wide range of business issues related to aging boomers.  Also, as is always the case with McKinsey Quarterly articles there is a whole lot of interesting data and analysis. 

While the article covers a lot of ground, I focused on their assessment of boomers work and retirement plans. Key quote:

"Eighty-four percent of those we surveyed expected to work after they formally retired, and 63 percent said they couldn’t see themselves ever retiring completely. Our analysis also indicates that 60 percent of boomers will need to work just to maintain 80 percent of their current consumption and that more than 40 percent (29 million) will be working at age 65. That is twice the number of people from the silent generation who were working at the same age (14 million, or 30 percent). By 2015 more than one-third of the labor force will be over the age of 50."

The substantial increase in aging baby boomer workforce participation echos our research and forecasts (see The Changing Face of Entrepreneurs).  While the McKinsey article focuses on what this means for employment at large corporations, our research indicates that many aging boomers will choose to form or work for small or personal businesses as they age. 

MIT's Agelab on Boomer Entrepreneurs

Yahoo Finance has a Marketwatch article interviewing the head of MIT's Agelab on retirement.  One of the topics is boomer entrepreneurship.  Key quote:

"Entrepreneurship. Boomers want to quit what they are doing to do something with "real promise." That means the next crop of entrepreneurs won't be newly minted MBAs but Americans over age 50 and especially the group referred to as "soccer moms." Soccer moms, says Coughlin, are ready to charge back into the work force. Trouble is, most companies aren't set up to bring back them back in a productive way. Most firms can't give soccer moms the flexibility they want so members of that group are likely to launch their own companies.

Boomer Job Sites

Yahoo has an article on the growing number of online job sites catering to the over 50 crowd.  They list 7 different jobs sites targeted at aging boomers and retirees.  Interesting quote on boomers needing to work past the traditional retirement age:

"A survey of 400 employers by the center found that a quarter of workers in their 50s will be financially unprepared for retirement and will want to stay on the job at least two years past the traditional retirement age."

The survey was done by Boston College's Center for Retirement Research which has lots of good information and data on retirement.