November 10, 2015 | Claire Hall

As Connecticut Baby Boomers Prepare to Retire in Droves, Who Will Buy Their Prospering Businesses?

The UConn School of Business, in conjunction with business-advisory firm BlumShapiro, has released the first installment of a report called, “The Baby Boomer Effect,” which examines the impact an aging generation is having on Connecticut’s business landscape.

David Souder, professor of management in the School of Business. (Nathan Oldham/UConn Photo)

David Souder in the School of Business. (Nathan Odham/UConn Photo)

The UConn School of Business, in conjunction with business-advisory firm BlumShapiro, has released the first installment of a report called, “The Baby Boomer Effect,” which examines the impact an aging generation is having on Connecticut’s business landscape.

The first installment of the report examines the current and future demographics of business ownership in Connecticut, and highlights the dramatic change that Connecticut will experience during the next 10 to 15 years as a large number of business owners reach retirement age.

One critical finding is that 47 percent of all Connecticut business owners are expected to be 55 or older by 2025, which is a substantial increase from today. Additionally, the rate of younger business “buyers” to older business “sellers,” which 15 years ago was 2-1 in favor of buyers, has now dropped to a ratio of nearly 1-1.

UConn Professor David Souder, of the management department, said small businesses represent 87 percent of all businesses in Connecticut, and with so many owners nearing retirement age, the implications run deep.

“Baby Boomers have caused businesses to change throughout their lives and will keep doing so as they retire. Our report offers insights into indirect effects this will have, particularly with the likelihood that business owners will have fewer potential buyers for their companies than in the past,” Souder said.

“The declining ratio of buyers to sellers may not only encourage sellers to work longer in the hope of getting a better price, but ultimately could lead to them selling their companies at a discounted rate without their desired outcome.”

Thomas DeVitto, chief marketing officer for BlumShapiro, said the size and scope of the generational shift the state is experiencing with the Baby Boomers right now is unlike any seen before, and the study will examine the ramifications of that shift in a number of areas.

“This report focuses on quantifying the significant rise of business transfers that will be associated with the aging of business owners over the next several years and the direct and indirect effect it will have on business,” DeVitto said.

The Baby Boomer Effect survey can be found in full here.

Listen to Souder and DeVitto’s interview on WTIC’s “Mornings with Ray Dunaway:”