Arguably, this is the best time in history to be alive as the world transitions through a time of historic and transformative change. When it comes to seizing opportunity, many see that right now is the Perfect Storm – but there is more “shaking up the snow globe” at the moment than just a one in 100-year global pandemic and the smart money is already riding that wave.
The U.S. has the biggest generation in history retiring en masse right now. Demographic modelling reveals that retiring Boomer business owners will sell or bequeath $10 trillion worth of assets over the next two decades and these assets are held in more than $12 million privately owned businesses. More than 70% of these companies are expected to change hands. Clearly, the sale of almost $10 million businesses over the next 10 to 15 years represents a significant increase in the annual number of businesses that will be sold.
Small business has long been the backbone of the US economy. There are 30,748,033 small businesses in the United States, according to the Small Business Administration. In fact, 99.9% of all businesses in the US are small businesses. They may be small, but they are mighty, employing 59.9 million people or 47.3% of the U.S. private workforce.
The smart money is getting in first
So, if this is a changing of the guard, who will acquire these small businesses from exiting boomers? Right now, a new breed of investors is focusing on acquiring owner-led small businesses. Today, private equity firms are sitting on more “dry powder,” or un-invested capital than ever before, last measured at $2.5 trillion in 2019, up from roughly $400 billion in 2000, and they have seen opportunity in small business, switching to acquisition mode and going on a buying spree.
But they are not alone. The market demand for small businesses has reached new highs due to record unemployment rates brought on by the Coronavirus. 27% of newly unemployed are looking to control their future through business ownership.
This is not surprising when we consider that apparently forty percent of start-ups fail in their first year and eighty percent have closed down or exited “in distress” by year five.
Savvy entrepreneurs have identified this need in the market and have started purchasing existing businesses for their obvious advantages when it comes to reducing an entrepreneur’s risk while creating opportunities for tremendous profit.
Just as entrepreneurs fill a need in the market, the DG Institute, a global private education provider since 2009, has seen a need for everyday Americans to be empowered to ride this wave of small business acquisitions and has devised an online program complete with knowledge, systems and support to guide people through the acquisition process from the search for a business to buy right through to owning and growing it. It’s called “Business Turnaround” and already has transformed lives with students leaving their day jobs for 6 and 7 figure profits or existing business owners scaling and growing through acquisition.
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