In recent years, a significant shift has been occurring in the business world: younger generations, particularly millennials, are increasingly purchasing businesses previously owned by Baby Boomers. This trend is expected to intensify in 2025 as a large portion of Boomer business owners prepare to retire. Rather than starting businesses from scratch, millennials are recognising the value of acquiring existing operations, and this shift presents unique opportunities both in Australia and overseas.
The Boomer Business Exodus
As Baby Boomers (born between 1946 and 1964) age, many are looking to retire or reduce their business commitments. In Australia alone, it’s estimated that over 50% of businesses are owned by people aged 50 or older, with many of these owners planning to exit within the next few years. According to the Australian Small Business and Family Enterprise Ombudsman, around 70% of small businesses will likely change hands in the next 10 to 15 years, either through sale or succession.
This wave of business retirements is creating a unique opportunity for millennials and younger generations who are looking to step into established businesses rather than navigating the risks and uncertainties of starting from scratch. Globally, it’s projected that USD 10 trillion worth of businesses will change hands over the next decade as Baby Boomers retire, with younger entrepreneurs keen to take the reins.
Why Millennials Are Buying Instead of Starting Their Own Businesses
For many millennials, the traditional route of starting a business from the ground up can seem daunting. The financial risks, administrative hurdles, and steep learning curves involved in launching a new venture can be overwhelming. Instead, purchasing an existing business offers several advantages, including established customer bases, brand recognition, and operational systems already in place.
Research from Xero indicates that millennials are more inclined to buy businesses because they provide a quicker route to profitability. Unlike startups, which often take years to become profitable, existing businesses offer the potential for immediate cash flow and scalability. Many millennials are also looking to reduce risk, and purchasing a business that already has a proven track record provides more stability than creating something entirely new. Additionally, businesses in sectors like technology, healthcare, e-commerce, and green industries are attracting younger buyers who are eager to capitalise on growing markets.
The Financial Landscape and Opportunities
The increasing availability of financing options has also played a role in this trend. In Australia, lenders have become more willing to offer business loans to younger buyers, particularly when the business has a proven financial history. The Australian government has also introduced various initiatives to support first-time business buyers, including grants and tax incentives.
In terms of opportunities, younger generations are particularly interested in acquiring businesses that align with their values. Sustainability, social impact, and technology innovation are driving factors for many buyers in the millennial and Gen Z cohorts. For instance, businesses focused on eco-friendly products, tech solutions, and social enterprises are seen as attractive investments. The demand for such businesses is also rising globally, with the millennial generation increasingly steering away from traditional industries in favour of those that have a positive societal impact.
Challenges and Considerations
While purchasing an existing business can be an attractive option, it’s not without challenges. Millennials need to ensure they have the right skills to manage and grow the business they acquire. This includes understanding financials, managing employees, and maintaining existing customer relationships. Furthermore, acquiring an existing business may involve inheriting liabilities or outdated business models that need updating to remain competitive.
Nevertheless, as 2025 approaches, the trend of millennials buying boomer-owned businesses is likely to continue growing, driven by a combination of shifting generational priorities, financial advantages, and access to better support systems. For many younger entrepreneurs, this trend is not just about acquiring a business—it’s about carrying forward the legacy of an existing operation while simultaneously modernising it for the future.
Conclusion
The trend of millennials and younger generations buying Baby Boomer-owned businesses presents a unique opportunity to bridge generational gaps in the business world. With more Baby Boomers looking to retire and millennials seeking established, low-risk opportunities, this movement is likely to shape the future of business in Australia and abroad. It’s a win-win situation for both sellers looking to retire and buyers eager to step into a ready-made business with fresh, innovative ideas.
