A recent government survey shows that 15.6% of all businesses are owned by those 65 and over.
Why have so many Baby Boomers decided not to sell their businesses? We had a few guesses, so we decided to poll small business owners to find out. In order to participate in the study, the participant must have owned the business for five or more years and be at least 60 years of age. Here’s what we learned:
- 46% still enjoy their work
- 59% were concerned they would be bored if they retired
- 32% said they could not afford to stop working
- 14% had previously retired and did not like it
- 30% were concerned with what would happen to their employees if they sold
It seems that there are a lot of good reasons for many business owners to keep working. We also found an interesting dichotomy between business owners aged over 60. There was one group who might prefer to retire but was still grinding it out and another group that was running their businesses much differently in their sixties than they did in their younger .
In short, the first group was still beholden to their business, trapped and unhappy. The second group was much happier because they found a way to have their businesses serve their economic and psychological needs.
We found several key distinctions between the group of “trapped” business owners and the more content group. Some of these differences were:
- The trapped group was a vital cog in the day-to-day operations whereas the second group was not.
- The trapped group tended to have fewer employees than the second group.
- The more content group tended to invest in mentoring key employees vs. the trapped group focused more on “doing the work.”
- The content group had something pulling them away from work whether it be an avocation, charity work, travel, or time with family. The content group had a significant reason to minimize their work hours.
Many experts view the Boomer exit delay as a negative trend; we do not. The combination of technology and increased human longevity allows Boomers to extend the spoils of their hard work building their businesses. Done right, Boomers can leverage their businesses to fund a world-class retirement.