A Tale of Two Transitions - boomer bulge, transactions & results

Ed Marsh | Sep 4, 2013
This is the first of a pair of related blog posts that will explore the implications of boomer bulge, increased SMB transaction flow and critical business strategy elements.

SME research published a report in late 2012 that has received wide distribution.  The synopsis and conclusion are that demographics dictate that 1.5 to 2 MILLION American businesses will be sold between 2017 and 2020.

That statistic has huge implications....as PWC has found that 83% of owners want their companies to remain in business; and sales are predicted to be 51%, 18% & 14% respectively to other companies, family members and employees.

It was the best of times

(You knew from the title that had to be coming!) For many businesses this represents a great opportunity- particularly for sales within families.  

Companies develop characters - which often mirror owners' and senior executives' personalities.  That supports important core values. But as companies age it also tends to limit the embrace of new approaches - particularly those that seem more radical.  "Radical" is of course a function of perspective - and companies that still publish fax numbers on business cards tend to have conservative characters.

SMB transaction boomer generation business salesAnd....companies with conservative characters are more likely to miss the two greatest opportunities for profitable business growth that they have today.  The opportunity to #SellMoreHere through awesome B2B inbound marketing is one - and the vast opportunities to #SellMoreThere into emerging markets is the other.

In contrast to departing management, the new generation of leadership positioned to buy these businesses is often well suited to intuitively pursue these avenues for growth.  Here's why.

Global & digital

Compared to the current owners for whom a Carribbean cruise or Army tour in Germany represented most of the global exposure, the upcoming owners have a different perception of 'international.'  They very likely spent a semester abroad during college; they view FX as a factor that impacts the cash they withdraw from a foreign ATM (and probably don't even know about American Express Travelers checks); and they juggle a global network of friends across borders, time zones and continents - seamlessly with Facebook, email and other social networks.  Further, for them the fact that "we've never sold outside the US" is merely a data point, not a relevent precedent.

And because social networks are so intuitive and natural to them, they "get the power" of inbound marketing and it's various tools - including content & social media.  They are prolific producers and consumers of content.  It's natural to them to quickly search something and to seek authoritative online resources.

They're often the ones behind that embarrassing 1 or 2 update Twitter handles and lame Facebook pages that many companies have.  They instinctively know that it's required but don't have the business experience to justify it.  During their "apprenticeship" they've been mollified and told to go ahead and create some online presence.  Unsupported and unappreciated they've then been the subject of "we told you so"s when nothing materializes immediately.

But with a leadership transition they finally get their chance.

Build it and they will come....not

People with experience in the fields of inbound marketing and global business development know that both require long-term commitment.  They are neither panacea for ailing businesses nor overnight solutions to falling revenues.  Both are incredibly effective tools for building sustainable, profitable diversified revenue, but both take time.

The upcoming generation has some luxury in that regard, however, with an established franchise, existing customers and a going concern.  Their role is to be stewards of the legacy and vigorous, effective innovative leaders going forward.

While the business remains strong it provides a platform upon which to build these progressive strategies for ongoing profitable growth in hypercompetitive global markets.  Unencumbered by stultifying 'tradition' they can implement international sales and global business development efforts AND inbound marketing initiatives.  

They can truly build on what their family has created, and make it better.  They can position the business for ongoing success and profitability.

In short, for companies transitioning leadership and ownership, the next generation of leaders is probably riding to the rescue at just the right moment with some critical skills and perspectives for today's complicated, competitive and globalized markets.

And for others it may be the worst of times

Tomorrow we'll look at the likely outcome for companies that just try to hang in there long enough until they can sell to another business.  Here's a preview.  It's not pretty.  BUT, there are some important proactive steps which can be taken to preempt some of the problems and simultaneously enhance the opportunities.  

business growth, international business development, SMB marketing,