Do you realize a major wealth transition is happening right now?

Codie Sanchez
25 Oct 202405:50

TLDRA significant wealth transfer is occurring as small business owners, predominantly Baby Boomers, retire and seek to sell their businesses. With approximately $1 trillion in small businesses expected to change hands over the next decade, opportunities abound for individuals to acquire these assets. The speaker advocates for everyday people to purchase these businesses rather than let them be absorbed by large corporations, suggesting personal engagement with local business owners as a potential path to ownership. The demographic shift and the desire for a different path among younger generations are driving this transfer, presenting a chance for community preservation and individual wealth creation.

Takeaways

  • 💼 A major wealth transition is currently underway in the form of small businesses changing hands.
  • 🏪 Main Street businesses are the backbone of local economies and many are up for sale.
  • 💡 This presents a significant opportunity for individuals to own and operate businesses.
  • 📉 The average age of small business owners is over 50, and many are ready to retire.
  • 👨‍👧‍👦 Few children of these owners are interested in taking over the family business.
  • 📈 Over the next decade, about 1 trillion dollars in small businesses will change hands.
  • 🏢 Small businesses are better off being sold to everyday people rather than being bought by large corporations or investment firms.
  • 💸 Many business owners are looking for a trustworthy buyer rather than a high bidder.
  • 🔍 Business buying sites like BizScout and BizBuySell can help find businesses for sale.
  • 💡 Direct interaction with local business owners can lead to deals and business takeovers.
  • 💼 The wealth transfer happening now offers a chance for individuals to become business owners and potentially millionaires.

Q & A

  • What is happening in the country's history that is considered a major wealth transition?

    -One of the biggest wealth transfers in the country's history is occurring as small businesses are changing hands due to the demographic shift with the average small business owner being over 50 years old and ready to retire.

  • Over the next 10 years, how much wealth is expected to change hands in small businesses?

    -Approximately 1 trillion dollars in small businesses are expected to change hands over the next 10 years.

  • Why are many small business owners looking to sell their businesses?

    -Many small business owners are tired after spending their lives building their companies and are now ready to retire and pass on their businesses.

  • What is the demographic reason behind this wealth transition?

    -The demographic reason is that the average small business owner in the US is now over 50 years old, and they are looking to retire.

  • Why is it better for everyday people to buy these small businesses instead of large corporations?

    -It's better for everyday people to buy these businesses to prevent them from being swallowed up by large corporations or investment firms, which can lead to changes that aren't great for the community.

  • What is the role of demographics in this wealth transition?

    -Demographics play a significant role as the aging small business owners are ready to retire, and many younger generations are not interested in taking over their parents' businesses.

  • How can interested buyers find small businesses for sale?

    -Buyers can find small businesses for sale by visiting business buying sites that have listings, or by directly speaking with local business owners to see if they are open to selling.

  • What are some of the creative arrangements that can be made when buying a small business?

    -Creative arrangements can include long-term payment plans, seller financing, leasing the business, or using SBA or third-party financing.

  • Why is now considered the perfect time to start exploring opportunities to own a business?

    -Now is considered the perfect time because businesses are available everywhere, and many small business owners are open to selling but have not yet put their businesses up for sale.

  • What is the relationship between small business ownership and wealth creation?

    -Being a small business owner is one of the fastest ways to become a millionaire, as 60% of all millionaires are business owners.

  • Why is it important for everyday people to consider buying small businesses instead of private equity firms?

    -It's important because if private equity firms buy these businesses, it can lead to a loss of local control and community impact, whereas everyday people are more likely to maintain the business's local ties and contribute to the community's well-being.

Outlines

00:00

💼 Wealth Transfer Opportunity in Small Businesses

The speaker discusses an ongoing significant wealth transfer in the country, where small businesses are becoming available for purchase. These businesses, which form the backbone of local economies, are often up for grabs due to the aging demographic of their owners who are ready to retire. The speaker emphasizes the opportunity for everyday people to buy these businesses instead of them being acquired by large corporations or investment firms. The script also mentions various ways to finance such purchases, including long-term payment plans, seller financing, and creative arrangements like SBA loans. The speaker encourages the audience to explore these opportunities and provides examples of how to approach local business owners about potential purchases.

05:01

💼 The Importance of Small Business Ownership for Wealth Creation

The second paragraph focuses on the importance of small business ownership as a pathway to wealth creation. The speaker points out that 60% of all millionaires are business owners, yet only 6% of Americans own a business, indicating a significant gap that needs to be addressed. The speaker suggests that buying small businesses on Main Street is a practical way to bridge this gap. The speaker encourages the audience to visit local businesses such as laundromats, dry cleaners, and grocery stores, as these owners might be looking for someone to take over their business. The speaker also touches on the potential for an apprenticeship model where younger generations can learn the business and eventually take it over, providing a solution for the retiring business owners who may not have a retirement plan.

Mindmap

Keywords

💡Wealth Transfer

Wealth transfer refers to the process where assets or capital change hands from one generation to another or from one group to another. In the context of the video, it highlights the significant shift happening as small business owners, many of whom are aging, are looking to retire and sell their businesses, potentially leading to a transfer of wealth to new owners.

💡Main Street Businesses

Main Street businesses are small, locally owned enterprises that contribute to the economic vitality of a community. They include shops, restaurants, and service providers found in local neighborhoods. The video emphasizes the opportunity for individuals to purchase these businesses, which are now 'up for grabs' as their owners look to retire.

💡Demographics

Demographics involve the statistical study of populations based on factors such as age, race, and income. The video mentions that the average age of small business owners in the US is now over 50, indicating a demographic shift where many are reaching retirement age and considering selling their businesses.

💡Private Equity

Private equity refers to funds invested in companies that are not publicly traded on a stock exchange. The script discusses how private equity firms are increasingly buying up small businesses, which can lead to businesses being consolidated under large corporations, potentially impacting local communities negatively.

💡Seller Financing

Seller financing is a method of payment where the seller of an asset provides financing to the buyer. In the video, it's mentioned as a common arrangement where the business owner becomes the bank, allowing the buyer to pay them back over time with future revenue and profits.

💡On and Off-Market Deals

On-market deals are those that are publicly listed for sale, while off-market deals are私下 transactions that are not publicly advertised. The video encourages viewers to look for both types of deals when considering the purchase of a small business.

💡Millennials and Gen Z

Millennials and Gen Z are the younger generations following Generation X. The video discusses a potential mismatch between the retiring Baby Boomer business owners and the younger generations who may not be interested in taking over their parents' businesses, creating an opportunity for others to step in.

💡Inflation

Inflation is the rate at which the general level of prices for goods and services is rising, and subsequently, the purchasing power of currency is falling. The script mentions that younger generations are facing inflation and stagnant wages, which might make owning a business an attractive alternative.

💡SBA Financing

SBA financing refers to loans guaranteed by the Small Business Administration,旨在帮助small businesses obtain financing. The video suggests looking into SBA or third-party financing as creative ways to finance the purchase of a business.

💡Business Owners as Millionaires

The video states that 60% of all millionaires are business owners, highlighting the potential for wealth creation through business ownership. It underscores the importance of small business ownership as a pathway to wealth积累 and financial independence.

💡Apprenticeship

An apprenticeship is a system of training a new generation of practitioners of a skill through a combination of on-the-job training and often some level of classroom instruction. The video proposes the idea of an apprenticeship where younger generations can learn the business and eventually take it over, providing a transition plan for the current owners.

Highlights

A major wealth transfer is currently happening in the US, with many people unaware.

Main Street businesses are the backbone of local economies and are increasingly available for purchase.

Over the next decade, approximately $1 trillion in small businesses will change hands.

The average small business owner in the US is now over 50 years old and ready to retire.

Many small business owners' children are not interested in taking over the family business.

Private equity firms are increasingly buying up small businesses, affecting local communities.

It's better for everyday people to buy these businesses rather than large corporations.

Now is the time for individuals to consider owning a business, with many opportunities available.

Businesses for sale can be found through various online platforms or by directly approaching owners.

Many business owners are open to creative payment arrangements, such as long-term payment plans or seller financing.

The fastest way to become a millionaire is often through small business ownership.

Currently, only 6% of Americans own a business, despite 60% of millionaires being business owners.

An apprenticeship model could bridge the gap between retiring business owners and younger generations.

Small businesses represent 90% of the net worth for many owners, making the sale crucial for their retirement.

The current demographic shift presents a unique opportunity for wealth transfer through small business ownership.

The speaker encourages exploring local businesses as potential opportunities for ownership.

The speaker's book 'Main Street Millionaire' provides more insights and strategies for buying small businesses.

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