Baby boomers represent the largest chunk of business owners in the country.
Those now in their late 40s to mid 60s are expected to keep working longer than their parents, according to the federal Bureau of Labor Statistics. But with their retirement drawing nearer, boomer business owners are facing questions about the future of their work and the fate of their businesses after transitions that might still be years or decades away.
Victor LaTorre has no plans to retire anytime soon, but he does think about the future of the hardware store in Vineland started by his father and two uncles in 1958.
“It’s a legacy now,” said LaTorre, 51, of Vineland, who owns LaTorre Delsea Hardware. “When I took it over after my dad passed (in 2006), I kind of felt I was the caretaker. They built it literally from a 30-by-40 building to 16,000-square feet. It was their vision and gamble and risk in the late ’50s to start a business with not two nickels to rub together. I really felt it was my obligation to sustain it and help it continue.”
LaTorre hopes that some day in the future the business will stay in the family.
“I have a son who is a teacher now, not involved with the business. He worked here in high school and college, and chose to be a teacher,” he said. “I do have a nephew in the business, and my sister also helps out with the business.”
Baby boomers, those born between 1946 and 1964, represent nearly half of business owners in the United States. And their businesses tend to be larger — and with more employees — than those owned by their younger and older counterparts, the Census Bureau’s Survey of Business Owners shows.
Nearly 53 percent of all businesses surveyed were owned by people between the ages of 45 and 64, according to the Survey of Business Owners 2007, which the government released in June. By comparison, about 30 percent are owned by those between the ages of 25 and 44.
And a higher percentage of the 45- to 64-year-old business owners have employees, nearly 57 percent. Among the 25- to 44-year-old owners, about 28 percent have employees.
Planning and advice
What will become of all these businesses decades down the line? Will they be passed on to family, closed, or sold?
An owner’s business can make up about three-quarters of his or her net worth, said John Zavac, president of Denver-based IBG Business Services Inc., an acquisition advisory firm that specializes in the sale of middle-market businesses.
“It’s the largest asset they have, and it’s probably the most important business decision they will make, which is when to sell their business,” Zavac said.
Zavac said the economic conditions of the past several years have somewhat altered earlier beliefs that baby boomers would retire within a short period of time.
“Three years ago, the common theory was an emphatic ‘yes.’ In today’s most recent economic conditions, I would say we will have an increase in the number of businesses for sale, but it won’t be as large a flood as initially expected,” he said.
Zavac advised potential business sellers to develop a plan and seek professional advice.
Joseph Molineaux, director of the Small Business Development Center at The Richard Stockton College of New Jersey, said he has seen questions coming up from business owners in the region about the succession, or sale, of their businesses one day.
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Article source: http://www.hispanicbusiness.com/2012/1/9/baby_boomers_next_step_getting_out.htm