A Wave of Retiring Business Owners 

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The United States is experiencing a significant wave of retirements as the baby boomer generation reaches retirement age. The year 2024 marks a record-breaking year for retirement in the U.S., as the number of Americans turning 65 is peaking. From 2024 through 2027, approximately 4.1 million Americans will turn 65 every year. Similar changes are seen across western countries. Large generations born at the end of 1950s and the beginning of 1960s are retiring in countries such as France, Germany, Poland, Scandinavia, the UK, and Japan.

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This phenomenon, named as “Silver Tsunami”, marks a significant demographic shift. The figure of soon-to-retiring workforce is substantial, and the trend is expected to continue for several years. However, as life expectancies are increasing, future retirement plans are in a fluctuation, and people are working beyond traditional retirement ages. In the EU, despite the average legal retirement age being 64, a significant number of people are working past 65 and even 75.

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The shift will have significant implications for the labor market, economy, and social security system. In fact, two-thirds of small business owners plan to retire in the next few years. If you are looking to acquire a company, these family-owned businesses with an owner who is about to retire are potential targets and might be more likely to sell. This creates a unique opportunity for search funds, investment banks, private equity firms, and business brokers. 

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New Supply of Potential Small- and Middle Market Businesses

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As baby boomers are preparing to step down, many family-owned businesses are in need of new ownership. Many of these are family-owned companies, where the owner has built a successful enterprise over decades but lacks a clear succession plan. These businesses are not just potential acquisition targets—they’re motivated sellers. For those looking to grow through acquisition, the timing couldn’t be better.

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The retirement of baby boomers signals a massive transfer of ownership in thousands of businesses, many of which have been staples in their industries for decades. Most of these businesses are in stable, cash-flow positive industries—HVAC, plumbing, manufacturing, and other "boring" but profitable sectors. 

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These "boring businesses” typically have steady performance and loyal customer base, but can lack the capital and vision for continued growth. This makes them attractive targets. For private equity firms, they are profitable add-on portfolio companies. Investment banks and business brokers, on the other hand, can expect a surge in deal flow as they help owners with their exits. For corporate buyers and investors, this creates the ideal environment for boosting their M&A activity. Search funds looking for a hands-on opportunity to run and grow the company can also benefit from acquiring these stable, cash-flow positive businesses, often at favorable valuations. 

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How to Find the Silver Tsunami Deals?

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Focusing on companies with soon-retiring owners is a great way to find warmer off-market deals. Finding these companies is really difficult and it takes an awful lot of time. 

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While this presents an immense opportunity, how to find these deals?

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The traditional methods—knocking on doors, scrolling through Google results, and relying on word-of-mouth—are inefficient and time-consuming. Cold calling to find out the owner’s age is hardly a recommended strategy either. 

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There is a much easier way to do it!

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Here at Inven we see the Silver Tsunami as a ‘big deal’, and we want to make finding these deals as easy as possible. Inven provides an AI-driven deal sourcing platform that drastically cuts down the time needed to find off-market deals. 

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With a simple natural language search prompt, such as “I want to find plumbing businesses,” and selecting the Intent to Sell filter, you get a list of companies whose owners are likely facing an upcoming generational handover. This AI-driven approach takes seconds and ensures you have an extensive coverage of the selected market (or niche), and a robust pipeline of off-market deals.

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Surf the Silver Tsunami

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The silver tsunami is here, and now is the time to prepare for the massive transition and opportunities that are already underway.

 

Investment banks, search funds, private equity firms, and strategic buyers stand to benefit greatly by leveraging technology like Inven’s AI-powered search capabilities. If you're ready to ride the wave, book a demo to see how Inven can help you stay ahead of the competition.

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