Small businesses — those with fewer than 500 employees — are the economic engine of America.
There are 28 million small businesses in the United States with upwards of 555,000 in Washington state, according to the U.S. Small Business Administration.
That’s a 49 percent increase since 1982, with small businesses taking up the slack as large corporations downsized, according to the agency’s report on small-business trends.
Small businesses provide 55 percent of all jobs and 51.7 percent in Washington state. They account for 54 percent of all U.S. sales. The cumulative impact of the small business sector is enormous, the report states.
But many of those small businesses are owned by the baby boomer generation. And many of that generation are nearing retirement age.
Estimates of the number of baby boomer-owned businesses for sale vary wildly — with anywhere from 4.5 million to 17 million projected by exit-planning analysts to hit the market from 2012-2018 — according to broker Robert Flynn of United Brokers Group, in an online article in December 2015.
The number of businesses changing hands continues to break records, with transactions in the third quarter of 2016 up 15 percent over last year’s numbers, which marked a six-year high, according to online marketplace BizBuySell.com. It’s the highest since the site started tracking data in 2007.
Jennifer Shelton, a certified business adviser with the Small Business Development Center in Everett, said she’s definitely noticed an increase in transactions beginning about 2013.
“It’s a good time to sell because more people are buying,” she said.
Some of the transactions involve business owners who held onto their businesses through the recession, she said, and now feel comfortable selling. Case in point, the five most recent transactions she’s advised were retiring baby boomers selling to millennials.
Some 90 to 95 percent of small businesses in Snohomish County have fewer than 20 employees, Shelton said.
They may not be able to afford a big-time broker, but business owners thinking of selling can get free advice at the Small Business Development Center, which counsels approximately 120 small businesses in depth every year and provides resources to another 100 to 200 businesses, Shelton said.
Longer life expectancies and the impact of the recession mean that fewer than 10 percent of small business owners see themselves taking the traditional retirement route, according to a report by The Guardian Life Small Business Research Institute.
At 64, Charles Greenberg, of Triad Law Group in Edmonds, is an attorney specializing in construction and real-estate law. He said he expects to sell his business at some point over the next few years, but quitting work altogether is not in the cards.
He may work part-time as an independent contractor, he said, or he might look for work in a “charitable line” benefiting animals, something for which he has an affinity.
“You want to stay active doing something,” he said.
It’s a line of thought that appears particularly reflective of his generation. According to a Pew Research Center report, the typical baby boomer believes old age does not begin until age 72. Half of all adults say they feel younger than their actual age, but fully 61 percent of baby boomers feel younger.