At 77 million strong, baby boomers make up the nation’s largest generation. Soon, they’ll also make up the largest group of retired business owners. Starting last year, boomers began hitting age 65 at a rate of approximately 10,000 a day – a trend expected to continue for the next 18 years, according to Businessweek. Considering that 9 million of our country’s 15 million business owners were born in 1964 or earlier, the result could be a flood of exiting chauffeur business owners that impacts the decisions of buyers and sellers of all ages.
In the past, the majority of businesses were passed down to family members. This meant that demand typically outpaced supply for existing companies. These days, less than one-third of ownership transfers happen between relatives. Most adult children simply aren’t interested in following in mom and dad’s footsteps. Combined with the growing glut of soon-to-retire business owners, the result is a rare buyer’s market. More limo companies for sale with fewer interested buyers will drive down business values and, thus, prices. It’s good news if you’re planning on expanding through the acquisition of a limousine business, but bad news if you were hoping to put your limousine business for sale.
It’s always better to sell at the peak of the market than at the bottom. But with the sustained market saturation expected to occur when boomers begin cashing out their chips en masse, owners who wait too long to sell could struggle to find buyers and secure a fair price. Timing the sale of a business is never easy, but putting a limo business for sale when supply has far outpaced demand will be especially challenging. Chauffeur business owners without a solid exit strategy will be at a distinct disadvantage. Until now, many boomers who have reached retirement age have been holding onto their companies as they wait for signs of an improved market. Business owners thinking of selling their business in the next few years should consider updating their exit plans so that, when the floodgates inevitably open, they’ll be at the forefront of the boomer wave.
For businesses looking to grow, the market saturation expected over the next decade could provide unprecedented bargains on acquisitions. By buying limo companies for sale when supply exceeds demand, businesses that may have otherwise been unable to afford an expansion could have the chance to enjoy strategic gains such as lower prices, longer customer lists, and larger territories. In the next several years, the limo industry is expected to see more ownership transfers than any other time in history. A current limo business valuation and updated exit plan will be even more important for owners hoping to enhance value, whether the goal is to sell a limousine business for the best possible price in a crowded market or to attain financing for a business acquisition.