How to Buy a Business from a Retiring Baby Boomer
From Millennials to Generation X, Y and even Z, there’s a veritable alphabet of entrepreneurs of all ages out there looking for advice on how to buy a business. Career options have evolved far beyond landing a job within a company straight after education, working for someone else and staying on that route for decades. Between enterprising and optimistic younger generations keen to invest, open-minded ‘portfolio career’ types, and mid-life lane-changers – there’s a huge number of buyers out there looking for businesses to buy.
A boom in opportunity for entrepreneurs
What a stroke of divine timing, then, that this coincides with the plethora of business owners who are so-called ‘Baby Boomers’, soon to reach retirement age if they haven’t already. For anyone confused by all these generational labels, check out this handy summary which defines Baby Boomers as “the cohort of babies born from the end of (World War II) all the way up to the early 1960s.”
When seeking new opportunities, some entrepreneurs overlook established business as an option but it can be just as much of an exciting venture as creating a start-up or nurturing a grassroots project – with potentially less risk.
The advantages of buying an existing business
In their article ‘Why It’s Prime Time to Buy a Business from a Retiring Baby Boomer’, Business.com lists some advantages of this brilliant opportunity as:
- Minimal upfront costs – you’re buying a ready-made brand, customer-base, management policies and other valuable aspects that usually take years to build
- Low risk – with most of the necessary business foundations in place, there will be very little groundwork to be done and the business will have likely proven it provides a healthy return on investment
- Established cash flow – an existing steady cash flow eliminates the scramble of starting from scratch. It’s likely there will already be equipment and employees available, so there will be no lapse in revenue when jumping in
Buying a business from a retiring Baby Boomer – top tips
As corporate finance experts, we work with entrepreneurs of all ages and backgrounds who are looking for advice on how to buy a business and make it a success – so that they too can reap the rewards when the time comes for them to sell.
If you’re an acquirer thinking about future opportunities and buying a business from a retiring Baby Boomer appeals to you, here are a few basic tips…
Look for businesses that have implemented an exit strategy
When you’re scouting out potential businesses for sale, go for those who have prepared for the event with the assistance of a professional adviser. There’s a much higher chance the business will be ‘sale ready’, making it much easier to facilitate a transaction. Processes and accounts will have been evaluated, due diligence will have been followed and documentation will be in order. Taking on a business of any kind is a brave move and this essential groundwork will put you in a stronger position going forward.
Engage with your seller’s advisors
Smart business owners don’t tackle the complicated process of selling a business alone because they understand the value of using a skilled expert to get the best results. A streamlined sale for them means an easier handover to you, so work with their advisors for a mutually beneficial outcome (this usually reduces timeframes time, too).
Patience pays
Most owners won’t have sold a business before, so they may be cautious. Retirement is a huge and emotionally-loaded milestone in the lives of many people, especially those who’ve invested so much time, energy and money into their own business. They might not have a successor so it can feel like they’re handing the business down to you. Don’t rush them during this sensitive process as it could damage the relationship and jeopardise the acquisition.
Play fair
The negotiation process is arguably the most challenging stage of the sale. The intricate details take time and care to discuss and resolve, so don’t lead your seller and their advisers down the garden path if you’re not serious about buying the business. If you’re courting other businesses at the same time, be open about it and follow the correct etiquette so you don’t affect your reputation as a credible buyer in the market more widely…
…and when it comes to talking process, never make a ridiculously low offer. This is a business you’re interested in taking to the next level, so show you what it’s worth and that you’re willing to pay a reasonable price for it.
Consider continuity
As we’ve said, one of the main advantages of buying a business from a Baby Boomer is that you’re buying a ready-made company. If you’re going to take on the existing staff and premises, discuss with your seller how they (and their management team) can help you maintain continuity by sticking around in the short, medium or even long term as the business changes ownership.
Although it may be tempting to bring in a team of new managers or move premises, losing staff might impact the value of the business you’ve worked so hard to acquire. With existing employees comes a working knowledge of the company that’s worth it’s weight in gold.
Now that you understand a little more about how to buy a business from a retiring Baby Boomer, get in touch with our friendly team of corporate finance experts at Entrepreneurs Hub so we can help you explore your options further. Call 0845 067 8678 or email info@entrepreneurshub.co.uk
FAQs – Selling your company
How do I sell my business?
At Entrepreneurs Hub, we talk about five key areas that make the difference between success and failure when selling your business. Read more…
How much can I sell my business for?
Determining your business’s value is more than just calculating a number it’s complex with key factors, that said the basic equation is actually quite simple. Read more…
How long does it take to sell my business?
The timeline varies depending on the complexity of the deal and how ready the business is for sale. On average, the process takes around twelve months – sometimes less, sometimes more.
While preparing your business for sale, Entrepreneurs Hub conducts in-depth research to identify potential acquirers. You’ll have the opportunity to review and approve this list before we make any approaches. Once the business is fully prepared – often the most time-consuming step, we begin marketing it. Typically, you’ll start seeing initial interest within a few months, with follow-up meetings happening shortly after.
As these meetings progress – coordinated and facilitated by Entrepreneurs Hub, you’ll begin receiving initial offers. At this stage, we’ll help you assess the strategic fit between your business and potential buyers. When you decide to move forward with an offer, an exclusivity period begins, during which the acquirer conducts Due Diligence (DD).
The DD phase typically lasts two to three months, depending on the complexity of your business. Once complete, the sale is finalised, and you’ve successfully sold your company.
How do I sell my business quickly?
Selling a business quickly is possible, but speed shouldn’t come at the expense of value or deal security Read more…
When is the best time to sell?
Selling your business is a major milestone, and the start of an exciting new chapter, whether that means new ventures or a well-earned retirement.
In our experience, the best time to sell is when you don’t need to – when your business is performing well – not necessarily tied to the calendar. That said, timing can still play a role.
Timing the Market
Strong economic conditions, sector growth, and buyer confidence boost valuations. Don’t wait for a “perfect” market – a well-prepared, well-performing business sells in any climate.
Plan Ahead (12–18 Months)
The best outcomes come from early planning: clean financials, solid forecasting and growth potential.
Spring & Autumn Are Active Periods
The M&A market is typically busier in spring and autumn while summer and winter tend to be slower due to holidays and year-end distractions. However, the unpredictability of deals and negotiations makes this hard to target. We do deals all throughout the year – the key is to work with someone who can keep driving the deal forward whenever it happens.
Financial Year- End
Selling your business well is a long process and aiming for your financial year-end milestone is a virtually impossible task. But it is worth bearing your financial year in mind as buyers will want to review the most up-to-date accounts available.
The best time to sell is when your business is ready, and you are too. With the right preparation and positioning the right timing follows naturally.
Can I sell my business online?
Yes, you absolutely can sell a business online. Many platforms specialise in connecting business sellers with buyers. Read more…