As someone who regularly contributes to this business brokers’ blog, I try to keep up with the latest trends on business valuation, marketing and negotiation, but it’s rare that I speculate on who should become an entrepreneur. Just like most of the brokers I know, I believe that people can successfully start a business at any age, but a recent article I read there are some key generational differences in how people approach business ownership.
In another business broker’s blog, a comparison was made between entrepreneurs between the ages of 25 and 46, Baby Boomers between the ages of 47 and 65, and people who start a venture after age 65. As someone who has done business with people in each of these age groups, I had to agree with the author’s assessment.
- Younger business owners (between 25 and 46 years old) have different attitudes about work. They’ve watched their parents get “packaged” into early retirement and seen their own companies get “right-sized,” which has left them without a real concept of job security. Jaded by the Darwinian nature of larger employers, these entrepreneurs are not necessarily into long-term business ownership. In fact, most expect to sell or “trade up’ within the next five to ten years.
- Baby boomer business owners (between 47 and 65 years old) still remember when the unspoken contract between employers and workers still meant something, and they still think employers owe more to their workers than a paycheck. When these entrepreneurs sell a company, they look out for the current employees and often agonize over how the sale will impact the lives of those they employ. They will rarely look at business ownership as a temporary source of income; rather, they enter entrepreneurship with a desire for stability and corporate leadership.
- Older entrepreneurs (age 65+) may have always dreamed of pursuing their passions, but perhaps they grew up in a generation where hobbies were considered impractical and foolish. Men, in particular, felt duty-bound by traditional values and rarely sought self-indulgent careers. Many people from this generation are finally going after that opportunity that eluded them while providing for their family, or perhaps they feel “lost” in retirement with little purpose in life.
Why is it so vital to consider a person’s age when working with them on a business transaction? As this business broker’s blog suggested, the motivations for buying and selling may be vastly different from one generation to the next. It will impact the type of business they buy, how long they expect to own it, and how they will negotiate the terms of the sale.