From Boomers to Gen X: How Business Ownership Trends are Shaping Tomorrow's Market

If you’re like me, 2013 feels a little like yesterday, but it’s been over ten years. Change can feel so slow; then one day you zoom out and realize nothing’s the same. That is a bit of how I feel about my life. I’d just returned to my home state of Michigan in 2013, was married without children, and was running a startup medical device company. Fast forward to today, I’ve been back home for over a decade, happily married to the love of my life with three beautiful daughters, and running my dream company.

Much has changed in my life, but similar tectonic shifts in the entrepreneurial landscape have taken place. To prove our case, our favorite professional organization, the Exit Planning Institute, saw it fit to update its groundbreaking 2013 State of Owner Readiness Report (SORR) with an updated 2023 edition. With two data points, the results are illuminating!

What’s Changed Across the Exit Planning Landscape

Over the next several months, our team will unpack the key findings from the Exit Planning Institute’s (EPI) State of Ownership Readiness Report and suggest some implications, starting right here.

In 2013, 73% of the business owner community surveyed were Boomers.

That number has now fallen to 19%, with Gen X now having become the largest group of business owners (39%), while Millennials (21%) and Gen Z (20%) have emerged as meaningful business owner blocs in the survey. While the survey itself may not be a precise replica of the composition of private business ownership by generational cohort, it does indicate a sea change.

This sea change, and the accompanying generational mindset shift of business owners, is something that must be taken into account.

Perhaps our biggest takeaway is a shift from Boomer owners who often have a singular passion for their business to Gen X, Millennials, and Gen Z who frequently tend to see their business as one of many life passions.

Beginning with Gen X, business owners of this generation do not intend to hold onto their businesses anywhere near as long as the Boomers. Instead, they are considering exiting while they still have energy for a new entrepreneurial venture, chasing another passion, or just retiring early to spend more time with family and friends.

What This Generational Shift in Private Business Ownership Could Mean for Your Business

The up-and-coming generations are handling business sales differently.
What will they do with it, and are you ready for what’s coming?

What are the implications of this shift for today’s business owner? Well, EPI concludes that the enterprise value hoping to transfer to new ownership over the next decade has grown 40% from a previous figure of $10 trillion to $14 trillion. An incremental $4 trillion of transaction value is a stunningly massive figure!

Data suggests an exponential rise in business sales. Millions more are expected to seek new ownership within the same timeframe.

So while it may feel like a blink of an eye, ten years has transformed the entire landscape.

Honestly speaking, some businesses were able to sleepwalk into being sold in the past. With the recent run-up of interest rates over the past few years, investors have gotten much more selective. But we expect this trend to dramatically ramp up in the future as more sellers are chasing the same pool of capital.

It’s been a clear seller’s market for years.
But at some point, this will change.

As a business owner, that means that the quality of what you’ve built will become more critical as the threshold for transferability will increase with buyers in the future. 

Get educated and move in the right direction now, so when the time comes you’re ready and at your best. 

Here at Doescher Group, we believe that preparing for the inevitable exit from your business is just a good business strategy. Whether you plan on exiting three, five, or fifteen years from now, we are here to help. 

Recommended Read: Too Soon? When is the Right Time to Start Exit Planning?

If you’re Selling Your Business in the Next 5 Years? Consider These 3 Tips For A Successful Exit and if you’re looking for some more hands-on advice, let’s talk. We’re always here to help.  

We are passing the world of business on to a new generation. What will they do with it?