ELY- Looking to buy a small business? According to Steve Dunnom of Sunbelt Business Advisors, now is a great time thanks to the ongoing retirements of the baby boom generation.
Dunnom, along with Emily Roose of the Entrepreneur Fund, highlighted business prospects during the monthly Ely for Ely meeting at the Community Hub on Tuesday.
“The baby boomers are set to retire completely by 2037,” said Dunnom. “If we do the math for the next 12 years, 66 percent of the 118,000 Minnesota small businesses with employees is going to be 77,808 (boomer-owned) businesses. That’s 6,490 businesses per year that are going to be making the (ownership) transition, divided by 365 is 18 business per day that baby boomers will be selling.”
Buying an existing business
“Buying a business instead of starting one has a lot of advantages,” Dunnom said, citing Small Business Administration statistics suggesting that only 10 percent of start-ups succeed but that the continued success rate for established businesses after a sale is much higher, at 98 percent.
“Of course, if you buy a failing business, that success rate is not going to be 98 percent, which is why it’s important to do your due diligence,” Dunnomn advised. The success rate was defined as five years of payments on the financing to purchase the business.
Local economy
Roose listed all of the advantages of small businesses for small towns. “Out of every $100 spent at a local small business, $68 goes back into the local economy. Only $13 stays locally if it’s a big business from out of the area. Small businesses create local jobs, support local events, provide local services for residents, and create tourist-friendly downtowns.”
Both Roose and Dunnom agreed that those looking to buy a business should work with qualified business advisors and brokers and should be prepared for a business ownership transition that would take at least two-to-three months.
Dunnom is a broker for Sunbelt Business Advisors, the largest business brokerage in the Midwest. Roose is the Ely-area business advisor for the nonprofit Entrepreneur Fund, which is a certified federal small business lender. The fund also provides no-cost business consulting for small businesses and start-ups.
Coming up
The next Ely for Ely session is tentatively scheduled for April 8. It will feature Ely Clerk-Treasurer Harold Langowski speaking on how businesses can successfully interact with local government. The time and place are currently TBA.