THE SUCCESSION CRISIS OF BABY BOOMER BUSINESSES: An Opportunity for Aspiring Entrepreneurs.

• Author: Braun, Michael
• Position: TRENDING

A crisis is brewing in Montana and across the country for business owners in their 60s and 70s. More and more baby boomers are facing a stark reality--no one wants take over their enterprises and the anticipated economic loss could reach well into the trillions of dollars.

In 2002, Joyce Previte was on the road to recovery from breast cancer when she launched Grandma Hoot Products out of Florence, Montana. She began manufacturing and selling her own unique Chow Chow relish condiment throughout the region, picking up the complexities of food product regulations and licensing along the way. Other products would soon follow, including jellies and BBQ sauces. Seeking assistance for her growing venture, she asked her husband Keith to jump on board. The family business started humming with Joyce making Grandma Hoot's products while Keith managed sales, marketing and distribution.

Fast-forward 16 years--Grandma Hoot products can be found on the shelves at Rosauers, Harvest Foods and Missoula's Good Food Store. And Chow Chow has a legion of hardcore fans who won't touch a hot dog or hamburger without the distinctive relish, even eating it straight from the jar. By any measure, Grandma Hoot is a success story.

Yet a year ago, Grandma Hoot nearly ceased operations. Joyce and Keith, now in their 60s, were feeling the physical demands of the day-to-day operations and decided it was time to quit but had no idea how to make an exit. Neither their daughter Molly, a recent Montana State University graduate, nor any of their friends expressed any interest in taking over the business. Lacking any prospects for succession, Joyce was resigned to closing its doors.

Grandma Hoot's predicament is far from unique. In fact, there is a tsunami cresting across the nation of baby boomer-owned businesses that are facing the daunting prospect of closing their businesses. The numbers are truly mind-boggling --according to the U.S. Census Bureau, baby boomers own about two-thirds of all companies (12 million businesses), with more than half deemed to be family enterprises. And this demographic group is exiting the workforce in record numbers at 10,000 individuals daily. Their challenge has been how to successfully hand off their hard-earned legacy.

The succession crisis is even more acute in Montana. The Treasure State has a significantly higher preponderance of family-owned businesses than the rest of the nation. According to the Family Firm Institute, family-owned...