II’m not exactly a baby boomer, but I’m damn close. The standard definition of this generation is that they were born between the years after World War II and 1964. I was born in 1965, very close, so go ahead, call me a boomer if you will. I am not ashamed. But there’s one thing I do know: the world of small business will be much better off when the baby boomers leave when the sun goes down.
According to Wilmington Trust data, baby boomers own 2.3 million businesses nationwide and employ about 25 million people, meaning a third of Americans depend on these businesses for their income and dozens of millions of others – vendors, suppliers, freelancers – also depend on these businesses for their livelihoods.
This generation of business owners oversaw one of the greatest wealth expansions in human history. And yet – typical of my generation – we have also created many problems for generations to come.
For example, we did not selfishly think about the future. A study by Wilmington Trust reveals that more than half of us (58%) do not have a transition plan for our businesses and 45% of us have nothing saved for retirement. You’d think that with all this wealth creation we’d have saved a few dollars for our golden years, but no, we’ve pretty much spent it all, leaving our children and grandchildren with massive debts and the responsibility of looking after us. .
For those of us who have put money aside, the good news from a Bloomberg report is that when we die, we’ll pass up to $73 billion in wealth. But let’s face it, according to the same report, that won’t happen for a very, very long time – by 2045 – which means that, thanks to advances in health care, current generations are going to have to face the cost of our keeping them alive and healthy for the next 20 years. This is in addition to taking care of themselves and their children. I pity the young parents. They have a lot to do.
I’m also sorry for the labor issues my generation has created in their companies for Gen X, Gen Y, and Gen Z.
Thanks to our persistence, much of our technology is still rooted in the 1970s. Recent data shows that between 86% and 92% of businesses still write paper checks to make payments. Paper checks! Not only that, but many of my customers continue to rely on older, bulkier systems instead of migrating to cloud-based applications that create value and productivity. Is it any surprise when data from the Small Business Administration shows that more than half of business owners nationwide are over the age of 50? This problem will force future generations to spend billions just to get up to speed.
Our workplaces also remain stuck in the past. In the majority of baby-boomer-owned businesses that underpin the U.S. economy, employees are having to fight for the kinds of benefits enjoyed by younger-generation-run businesses, like working from home, flexible hours , extended paid time off, mental health coverage, and protections against harassment and discrimination. All of these things are foreign concepts to many people of a certain age who never enjoyed these benefits themselves when they were younger and don’t understand why today’s generations should.
So what will become of these baby boomer-led businesses? Hopefully some of these owners will wake up and take the next few years to build systems, implement processes, and create a friendlier workplace that will attract younger and better talent. By doing so, they can create value that will be attractive to a potential buyer, which may include their workforce in the form of an employee stock ownership plan or similar arrangement.
But don’t hold your breath. This kind of forward thinking hasn’t been done much in the past and it’s going to take a lot of investment and sweat that I’m pretty sure my generation won’t be ready for. My rationale: data shows that the vast majority of boom business owners have ignored the need for a transition or succession plan, 75% of them plan to continue running their business, which will guarantee years of torture to those who choose to work with or for them in the hope of one day taking over the business.
My advice to my generation: for once in a generation, think about the next generation. Invest. To hire. Create value. Take the next few years, while you’re still standing, and build an asset worth passing on to the next generation. Let’s do something good for the future. Let’s do something that benefits someone other than ourselves. I know, it’s the antithesis of our behavior in the past. But you’re never old enough to change.
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