The $5 Trillion Opportunity

According to Corporate Value Metrics, there are over 6 million privately held or family run businesses in the United States with less than $100 million in sales. A full 94% of those have less than $5 million in sales. All combined, these businesses represent over $9 trillion in sales. Conservatively valued at 0.5x sales, this represents almost $5 trillion in value.

Baby Boomers own two thirds of these businesses. The average Boomer is 63 years old. This likely means the majority of the $5 trillion in privately held businesses will need to transition to new ownership in the next 10 years. 

The problem is 80% of businesses that go on the market don’t actually sell. Only 20-30% of businesses trying to transition ownership actually have a successful outcome. Family held businesses aren’t much better with only 30% successfully transitioning to the 2nd generation, 12% to the 3rd and 3% to the 4th.  

With this many businesses likely to come to market in the next 10 years, there is a good chance that only the best of these businesses actually sell. Therefore, the probability that Baby Boomers will be able to harvest the significant amounts of wealth tied up in their businesses is very low. This is a massive opportunity for those willing and able to improve the attractiveness and readiness of their business for sale. The key is in the preparation. 

Can you afford to not transition your business? The time to start preparing is now. Please reach out to discuss next steps.