Over 50% of all U.S. business owners are over 55 years old. In Iowa, with our aging population, that percentage is likely even higher. We’ve been hearing for years about the significant increase in businesses coming to market due to retiring baby boomer owners. The Silver Tsunami— referring to those turning 65—began in 2011. While it’s been expected and predicted, the reality is that the business-selling boom hasn’t truly happened yet.
Why Iowa Owners Are Waiting
What we are increasingly seeing are business owners operating their businesses later in life— many well into their 70s. This is especially common with Iowa business owners. There are many reasons for it, ranging from personal sense of identity and worth, to lack of younger family members’ involvement in the company, and even lack of hobbies or retirement plans.
The Hidden Financial Risk
However, operating your business into your 70s comes with significant financial risk to your family. Your business is typically your family’s largest asset. Sudden life events are just that— unexpected. Without a succession plan, an unexpected health crisis or disability can dramatically erode the value of what you’ve spent a lifetime building.
The Market Reality
It’s important to note that the Silver Tsunami has not led to a mass of business sales, rather a steady flow. However, if there is a large increase in Iowa businesses for sale, that will clearly reduce selling valuations due to simple supply and demand. Early movers who plan ahead may capture premium business valuations before the market becomes oversaturated.
The 5-Year Rule
If you’re contemplating retiring and selling your Iowa business within 5 years, it’s wise to have a plan now. Start the conversation with your attorney, investment advisor, and yes—an Iowa business broker.
A quality business broker can help to:
• Value your business accurately
• Provide advice on key value drivers to increase its worth
• Develop a timeline for maximizing your exit value
• Connect you with qualified Iowa business buyers when the time is right Take Action Today
Don’t let your life’s work become an emergency sale. Even if retirement seems years away, the time to plan is now.
If you are a business owner contemplating selling your Iowa business within the next 5 years— give me a call. As an Iowa business broker, this is my sole focus and specialty.
