–SINCE 1982–

The Big Exit?

Many of my experienced peers in the M &A Advisory industry remember a book that was published in 2005, “The $10 Trillion Opportunity”, authored by Richard E. Jackim and Peter G. Christman.  In summary, the book highlighted the opportunities in the business exit profession, as aging Baby Boomers with privately held businesses were aging out and starting to exit their businesses.  Part of the concept was that this was the beginning of the tidal wave and there would be more businesses than buyers in the market.

Well, like many predictions, the tidal wave never fully materialized, due in part to the Great Recession in 2008, which reduced the value of many businesses and also reduced the value of many outside investments such as real estate and stocks, making retirement not a viable option for many “Boomer” entrepreneurs.  Sure enough, the economy started coming back and several smart or lucky entrepreneurs were able to exit their businesses before the next crisis, The COVID-19 Pandemic again disrupted markets.

Fast forward to last Saturday morning, I was reading the Wall Street Journal and an article, “Huge Old Wealth Gets New Owner”, written by Ben Eisen and Anne Tergesen, captured my attention, as it described how many Baby Boomers were now starting to transfer their wealth to heirs.  Probably due in part to inflation, but the $10 Trillion transfer has now grown to $70 Trillion of assets being transferred to heirs. This transfer of wealth along with record stock markets is creating another exit opportunity for entrepreneurs considering an exit strategy.  In short, despite the prediction of a shortage of Buyers there is a surplus of Buyers with significant assets looking acquire a proven business in a growing economy with an abundance of low-cost capital.

Whether or not you are a Baby Boomer, if you are thinking of selling your business within the next couple of years, you may want to consider your options of going to market sooner versus later.  As we have seen with the Great Recession and the COVID-19 Pandemic, there is a risk of business ownership.  Please contact The FBB Group for a confidential, no obligation discussion of our services.