|
By: Lauren Heist, Daily Herald Staff Writer, September
13, 2005, Chicago Daily Herald
After 40 years of running a 200-employee trucking company in Lake
in the Hills, Bob Boncosky was looking forward to retirement and
some leisurely days on the golf links.
"At 62, I didn't feel like doing it anymore," he said.
But like many small business owners, Boncosky couldn't just call it quits.
He had a lot to think about. Should he hand the company over to his sons? Should
he sell it to an outside company? What would happen to his employees?
"There's an awful lot that goes into the process until you get to that point," said
Boncosky, now 65.
Experts believe the questions Boncosky wrestled with will become more common
as younger business owners - those in the massive baby boom generation - reach
retirement age.
According to Richard Jackim, president of The Christman Group LLC, a Palatine
investment banking firm, one out of every two businesses will go up for sale
in the next 10-15 years as baby boomers reach retirement age, and he said a
total of $10 trillion could change hands as a result.
There are 77.7 million baby boomers in the United States - who are now between
41 and 59 years old - and they comprise 27.5 percent of the U.S. population.
Not surprisingly, that age group also makes up the largest pool of self-employed
business owners. In 2002, about 28.3 percent of all businesses were owned by
people age 45-54, according to data from the Small Business Administration.
And with 297,624 business with 500 or fewer employees in Cook, DuPage, Kane,
Lake and McHenry counties as of 2004, according to the Illinois Department
of Commerce and Economic Opportunity, that could mean thousands of businesses
will soon come up for sale.
Jackim said very few businesses will be handed down to children.
"In the old days, it was the American dream for dads to start a business
and have their sons or daughters take it over," Jackim said. "Now,
an entire generation has been raised thinking that owning a business is not the
glamorous thing it used to be."
Only one-third of all businesses go through a successful transition, whether
the founder hands off the business to a son or daughter or sells it to an outside
buyer, according to Lloyd Shefsky, founder of the Center for Family
Enterprises at the Kellogg School of Management at Northwestern University.
Boncosky sold his company to a Texas company and two of his sons got jobs with
the company.
But many businesses won't be as lucky, and as more baby boomers retire, that
could also mean more businesses will close. Shefsky said that could cause more
jobs to transfer overseas.
"This transition from prior ownership to next generation is happening at
the same time we're going through all that global competition," Shefsky
said.
Still, Shefsky isn't too worried about the effect of a mass baby boomer retirement.
"If our economy is solid it won't have any impact," he said.
To make sure businesses survive, experts say owners first need to develop an
exit strategy and decide whether to hand the company over to family members
or sell it.
If they decide to sell, they have to determine how much their business is worth.
Don Wilson, president of the Association of Small Business Development Centers
in Virginia, said business owners should have their companies evaluated by
an outside consultant.
"An awful lot of small business owners often have an inflated idea of what
their business is worth," he said.
Wilson said owners should also try to boost sales and reduce debt before putting
the business on the market.
"Try to make that business as successful as possible ... so when someone
looks at their balance sheet they say, 'This is a good business,'" Wilson
said.
Experts say it takes about two to five years to successfully hand over or sell
a business.
So even though baby boomers are still in their prime working years, Jackim
said it's not too early to start planning.
"Our message to business owners is if you thought about selling a few years
ago, now is a good time to do it," he said.
|
