A Change of Pace to Business Ownership
Retirees as new business owners
With Baby Boomers retiring, many businesses are being passed down to the next generation. For a growing number, retirement is no longer a case of flying south for the winter, but hunkering down and diving into a new venture.
Many built their savings with hours of sweat equity, and while they profited from the years dedicated to earning a living, they aren’t ready to get out of the game yet. Instead, the appeal of self-employment leads an enterprising few to reinvest for equity and a challenge. As Cassandra Waltrip, In-House Accountant for The Firm, points out, the older generation “has worked for other people” and “many find the advent of the internet and technology “exciting” and it makes it easier to get into business themselves.
"Many built their savings through hours of sweat equity, and while they profited from the years dedicated to earning a living, they aren't ready to get out of the game yet."
- Cassandra Waltrip
Finding the right business to fit one’s lifestyle is key, and running a company through passive or more absentee approach is a great way to increase earnings well into full or semi-retirement. Waltrip herself is also looking to increase her retirement earnings potential through investing this way. She and her husband, Scott, are currently pursuing opportunities to become serial owners, and their approach to ownership is “100% a numbers decision.” The erratic nature of the stock market leaves many on edge, prompting “most older buyers to look toward diversifying their holdings” through business ownership, says Waltrip.
As the go-to person preforming business valuations for The Firm’s current and potential clients, Waltrip focuses on a company’s books and whether or not “it will have the ability to produce cash flow for a new owner.” This is crucial to those not sure about their retirement and to those re-evaluating where they are and where they would like to be financially. Most buyers aren’t looking to turn a business around, but rather to continue a proven trend of profitability.
Waltrip sees many older buyers looking into businesses outside of their realm of expertise. With the advantage of age and the right numbers, industry experience for a buyer is hardly a prerequisite for success. As Waltrip states, “older owners are doing multiple things, and they want to diversify.”