By Andrew Miller
The greatest wealth transfer in history has already started.
Over the next two decades, nearly $124 trillion in assets will change hands. Most of that money will be passed down from baby boomers to the younger generations.
However, there’s more than just family inheritances up for grabs.
As millions of baby boomers retire, they leave behind an unprecedented number of businesses. More than half of all small business owners in the US are over the age of 55, and a quarter are over 65.
By 2035, over 6 million small and mid-sized businesses will be for sale across every sector of the economy. That will be the largest transition of small business ownership in modern history.
This vacuum creates a generational wealth building opportunity for new demographics of owners to step in, allowing businesses to stay open and preserving up to 12 million jobs.
In particular, business ownership could become possible for thousands of Black, Latino, and women entrepreneurs, closing long-standing participation gaps and unlocking $3 trillion in new household wealth.
Currently, these three groups stand to gain just 28% of the great wealth transfer. For example, black entrepreneurs are estimated to receive $87 billion if current participation trends remain in place. In comparison, an increase in business ownership participation could put that number over $369 billion.
Simply put, owning a business is one of the most powerful ways to reduce geographic, gender, and race-based disparities in wealth accumulation. The vast amount of existing businesses becoming available for acquisition simplifies the path to entrepreneurship for many.
Despite the outsized supply of businesses becoming available, there are still challenges to successfully transferring ownership. Buyers and sellers have difficulty finding each other and navigating complex processes without reliable standards or guidance.
Aspiring entrepreneurs are rarely familiar with the process of acquiring a business, while owners often underestimate how much preparation it takes to sell. Not to mention, financing is slow, complex, and oftentimes inaccessible for first-time or lower-wealth buyers.
None of these challenges are impossible to overcome with the right support. After acquiring a business, having the right capital structure in place is what determines whether it thrives. Signet Capital Group helps business owners access the funding they need to grow. Contact us now to explore your options.
The Great Ownership Transfer is more than a demographic shift, it can preserve viable businesses, sustain local jobs, stabilize supply chains, and bring profound new wealth to a diverse population of races, genders, and geographies.