Baby boomer firms are up for grabs here's how entrepreneurs can benefit

A few years ago, I started having conversations with baby boomers who had spent their lives building companies from the ground up.

As someone who works in mergers and acquisitions, I was often asked questions about how they could leave a legacy, monetise the sale of their business or, in some cases, simply find a home for their companies so they could move on.

For some, the decision was driven by a desire to enjoy the rewards of their hard work; for others, it was a matter of necessity — a health crisis or shifting family priorities.

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What struck me was how often these conversations were happening and how similar the stories sounded. It became clear this was not a series of isolated cases but part of a larger, generational shift that is reshaping the entrepreneurial landscape.

The demographic reality is this: 41 per cent of all US businesses are owned by baby boomers (according to a study by Guidant Financial), with 34 million small to mid-size businesses in the US, according to the US Small Business Administration Office of Advocacy, this equates to over 12 million small-to-mid-sized enterprises owned by boomers.

This generational shift, often called the “Silver Tsunami,” is set to unleash the largest transfer of wealth in history as these owners seek to sell, transition, or shutter their businesses. For entrepreneurs, this is not just a trend — it’s the single biggest mergers and acquisitions (M&A) opportunity of our time.

Here are three ways entrepreneurs across generations, whether seasoned business owners or ambitious newcomers, can gain from this unprecedented wave of exits.

1. A buyer’s market: Attractive valuations abound

With an influx of business owners looking to sell, we’re entering an environment where buyers have the upper hand. The supply of businesses for sale is outpacing demand, leading to favourable valuations. This is especially true for companies heavily reliant on their founders, where buyer concerns about leadership transitions can lower price tags.

In 2024, the average earnings before interest, taxes, depreciation, and amortisation (EBITDA) multiple for US private transactions was 4.8 as of quarter three of 2024, according to Business Valuation Resources — a baseline that many deals fell below due to market saturation.

For aspiring entrepreneurs, this means the ability to acquire businesses at prices that would have been unthinkable just a few years ago. The result? Entrepreneurs can secure more value for every dollar invested, a rare opportunity to enter or expand in competitive industries.

Whether it’s a bakery, a tech consultancy, or a manufacturing firm, the time is ripe to acquire businesses that, with the right management, can yield outsized returns.

2. The M&A equivalent of buy now, pay later

In my decades of experience facilitating M&A deals, I’ve noticed an intriguing shift in deal structures.

Baby boomers are prioritising legacy over lump sums, often showing more interest in finding a worthy steward for their life’s work than squeezing every last dollar from a sale. In fact, 60 per cent of boomer business owners are reported to be open to seller financing options. This sentiment opens doors for creative financing solutions. Deal structures such as vendor take-back loans, earnouts, and share rollovers have become increasingly common, enabling buyers to reduce upfront costs.

Think of it as the M&A equivalent of “buy now, pay later.” For cash-strapped entrepreneurs, this means businesses are now within reach that might have been financially prohibitive in a more seller-driven market.

Baby boomers’ alternatives — such as shutting down entirely — are far less appealing, further incentivising flexibility. Entrepreneurs can negotiate deals that work for their budgets while preserving the seller’s legacy and ensuring a smooth transition.

3. Scaling through roll-ups amplifies value

The concept of a roll-up — acquiring several smaller businesses and combining them into a larger, more efficient operation — isn’t new, but it’s never been more accessible.

The Silver Tsunami is creating a prime environment for roll-ups, particularly in fragmented industries where small businesses dominate.

Consider this: acquiring multiple businesses in the same sector allows entrepreneurs to achieve economies of scale, streamline operations, and professionalise management.

This approach doesn’t just add value — it reduces risks. For example, a single small business may struggle to afford a full-time CEO or chief finance officer, but a larger entity formed through a roll-up can.

Entrepreneurs aiming for long-term growth can leverage roll-ups to build robust enterprises with higher valuations.

With all baby boomers crossing the 65-year-old age threshold by 2030, the silver tsunami is forecasted to continue for the next decade.