I’m not exactly a baby boomer, but I’m pretty darn close. The standard definition of this generation is that they were born between the years after the second world war and 1964. I was born in 1965, close, so go ahead, call me a boomer if you want. I’m not ashamed. But there’s one thing I do know: the small business world will be much better off when the boomers ride off into the sunset.
According to data from Wilmington Trust, baby boomers own 2.3m businesses in the country and employ about 25 million people, which means that a third of Americans depend on these businesses for their income and tens of millions more – vendors, suppliers, freelancers – also depend on these businesses for their livelihood.
This generation of business owners has overseen one of the greatest expansions of wealth in human history. And yet – typical of my generation – we’ve also created many problems for the generations to come.
For example, we selfishly haven’t thought of the future. A study from Wilmington Trust finds that more than half of us (58%) don’t have a transition plan for our businesses and 45% of us haven’t saved anything for retirement. You would think that, with all this wealth creation we would’ve socked away a few bucks for our golden years but no, we pretty much spent it all, leaving our children and grandchildren with massive debts and responsibilities for taking care of us.
For those of us that have put money away, the good news from a Bloomberg report is that when we die, we’ll pass up to $73tn in wealth. But let’s face it, according to the same report, that’s not going to happen for a long, long time – by 2045 – which means that, thanks to advances in healthcare, current generations are going to have to deal with the cost of keeping us alive and healthy for the next 20 years. That’s in addition to taking care of themselves and their kids. I feel sorry for young parents. They’ve got a lot on their plate.
I also feel sorry for the workplace problems my generation has created in their businesses for the Gen Xers, millennials and Gen Zers.
Thanks to our stubbornness, much of our technology is still steeped in the 1970s. Recent data shows that between 86% to 92% of companies are still writing paper checks to make payments. Paper checks! Not only that but many of my clients continue to rely on older, clunkier systems instead of migrating to cloud-based applications that build value and productivity. Does this come as a surprise when Small Business Administration data shows that more than half of the nation’s business owners are over the age of 50? This problem will require future generations to spend billions just to get to up to par.
Our workplaces too remain stuck in the past. At the majority of the boomer-owned companies that underpin the American economy, employees have to fight for the kinds of benefits enjoyed by companies run by younger generations like working from home, flexible schedules, expanded paid time off, mental health coverage and protections from harassment and discrimination. All of these things are foreign concepts to many people of a certain age who never enjoyed these perks themselves when they were younger and don’t understand why today’s generations should.
So what will happen to these boomer-led businesses? Hopefully, some of these owners will wake up and take the next few years to build systems, implement processes and create a friendlier workplace that will entice younger, better talent. By doing so they can create value that will be attractive to a potential buyer, which maybe can include their workforce in the form of an employee stock ownership plan or similar arrangement.
But don’t hold your breath. That kind of forward thinking hasn’t much been practiced in the past and it’s going to require a lot of investment and sweat that I’m pretty sure my generation won’t be up for. My justification: data shows of the vast majority of boomer business owners who have ignored the need for a transition or succession plan a whopping 75% of them plan to carry on running their companies which will guarantee years of torture for those who choose to work with or for them in the hopes of one day taking over the business.
My advice to my generation: for once in a generation, let’s think of the next generation. Invest. Hire. Create value. Take the next few years, while you can still stand, and build an asset that is worthy of transfer to the next generation. Let’s do something that’s good for the future. Let’s do something that benefits someone else other than ourselves. I know, that’s antithetical to our behavior in the past. But one’s never old to change.