In today's rapidly changing economic landscape, small business succession planning has become a critical issue. With a significant portion of small business owners approaching retirement age, the market is facing an unprecedented shift. This blog post aims to highlight the importance of succession planning and encourage a new generation of business owners to step up and carry forward the legacies built over decades.
A Personal Journey: From Entrepreneurship to Succession
Seven years ago, one of our partners, Barrett Young, faced a pivotal decision. After founding and successfully running a company for nearly six years, Barrett decided to close it down and join GWCPA, a firm with an impressive nearly eight-decade-long succession plan. This transition wasn't easy. It meant giving up the comfort and autonomy of a 4-hour workweek lifestyle for a more traditional business environment. However, it also meant becoming part of something bigger, joining a team with a shared vision for the future.
The Current Landscape: A Generational Shift
The small business market is on the brink of a generational shift. Currently, 50% of small business owners in the U.S. are over 55 years old, and nearly half of business owners (48%) say they plan to retire within the next five years. Alarmingly, two-thirds of these owners lack a formal succession plan. At the same time, the entry side of the workforce faces a talent shortage and the looming impact of AI on entry-level jobs.
Millennials (currently 29-44) are uniquely positioned to bridge this gap. This generation can show retiring business owners that their legacies are worth more than a mere buyout value. They can also demonstrate to the incoming generation the importance of human connection in business, beyond what technology can offer.
The Personal Connection: Small Business is Personal
Small business is not just about maximizing profits or leveraging technology. It's about people. When acquiring a small business, one inherits a team of individuals with their own hopes, dreams, and goals. It's crucial to see these businesses for what they are, and their potential: legacies built on blood, sweat, and tears, with employees who work hard and want to know their work counts for something.
Succession is not an easy path. It requires selflessness, dedication, and a commitment to continuous growth. As one steps into leadership, there will always be doubts and challenges. But with commitment from the top, to inspiring and training the next generation of leaders, you can ensure the legacy of your company continues.
Encouragement and Community
Our firm, GWCPA, has successfully navigated succession planning for over 75 years. We have never lost a partner to contention or split, and many of our clients are now in their third and fourth generations of business. This journey is possible, and you are not alone. We encourage you to join us, follow our YouTube channel, and grow with us into the leaders our businesses need.
