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No country for old business owners: Economic shifts create a growing challenge for America’s aging entrepreneurs
Nancy Forster-Holt, University of Rhode Island Americans love small businesses. We dedicate a week each year to applauding them, and spend Small Business Saturday shopping locally. Yet hiding in plain sight is an enormous challenge facing small business owners as they age: retiring with dignity and foresight. The current economic climate is making this even more difficult. As a professor who studies aging and business, I’ve long viewed small business owners’ retirement challenges as a looming crisis. The issue is now front and center for millions of entrepreneurs approaching retirement. Small enterprises make up more than half of all privately held U.S. companies, and for many of their owners, the business is their retirement plan. But while owners often hope to finance their golden years by selling their companies, only 20% of small businesses are ready for sale even in good times, according to the Exit Planning Institute. And right now, conditions are far from ideal. An economic stew of inflation, supply chain instability and high borrowing costs means that interest from potential buyers is cooling. For many business owners, retirement isn’t a distant concern. In the U.S., baby boomers – who are currently 61 to 79 years old – own about 2.3 million businesses. Altogether, they generate about US$5 billion in revenue and employ almost 25 million people. These entrepreneurs have spent decades building businesses that often are deeply rooted in their communities. They don’t have time to ride out economic chaos, and their optimism is at a 50-year low.
New policies, new challenges
You can’t blame them for being gloomy. Recent policy shifts have only made life harder for business owners nearing retirement. Trade instability, whipsawing tariff announcements and disrupted supply chains have eroded already thin margins. Some businesses – generally larger ones with more negotiating power – are absorbing extra costs rather than passing them on to shoppers. Others have no choice but to raise prices, to customers’ dismay. Inflation has further squeezed profits. At the same time, with a few notableexceptions, buyers and capital have grown scarce. Acquirers and liquidity have dried up across many sectors. The secondary market – a barometer of broader investor appetite – now sees more sellers than buyers. These are textbook symptoms of a “flight to safety,” a market shift that drags out sale timelines and depresses valuations – all while Main Street business owners age out. These entrepreneurs typically have one shot at retirement – if any. Adding to these woes, many small businesses are part of what economists call regional “clusters,” providing services to nearby universities, hospitals and local governments. When those anchor institutions face budget cuts – as is happening now – small business vendors are often the first to feel the impact. Research shows that many aging owners actually double down in weak economic times, sinking increasing amounts of time and money in a psychological pattern known as “escalating commitment.” The result is a troubling phenomenon scholars refer to as “benign entrapment.” Aging entrepreneurs can remain attached to their businesses not because they want to, but because they see no viable exit. This growing crisis isn’t about bad personal planning — it’s a systemic failure.
Rewriting the playbook on small business policy
A key mistake that policymakers make is to lump all small business owners together into one group. That causes them to overlook important differences. After all, a 68-year-old carpenter trying to retire doesn’t have much in common with a 28-year-old tech founder pitching a startup. Policymakers may cheer for high-growth “unicorns,” but they often overlook the “cows and horses” that keep local economies running. Even among older business owners, circumstances vary based on local conditions. Two retiring carpenters in different towns may face vastly different prospects based on the strength of their local economies. No business, and no business owner, exists in a vacuum.A small business owner in Rochester, Vt., discusses the challenges of retirement in a news segment from WCAX-TV. Relatedly, when small businesses fail to transition, it can have consequences for the local economy. Without a buyer, many enterprises will simply shut down. And while closures can be long-planned and thoughtful, when a business closes suddenly, it’s not just the owner who loses. Employees are left scrambling for work. Suppliers lose contracts. Communities lose essential services.
Four ways to help aging entrepreneurs
That’s why I think policymakers should reimagine how they support small businesses, especially owners nearing the end of their careers. First, small business policy should be tailored to age. A retirement-ready business shouldn’t be judged solely by its growth potential. Rather, policies should recognize stability and community value as markers of success. The U.S. Small Business Administration and regional agencies can provide resources specifically for retirement planning that starts early in a business’s life, to include how to increase the value of the business and a plan to attract acquirers in later stages. Second, exit infrastructure should be built into local entrepreneurial ecosystems. Entrepreneurial ecosystems are built to support business entry – think incubators and accelerators – but not for exit. In other words, just like there are accelerators for launching businesses, there should be programs to support winding them down. These could include confidential peer forums, retirement-readiness clinics, succession matchmaking platforms and flexible financing options for acquisition. Third, chaos isn’t good for anybody. Fluctuations in capital gains taxes, estate tax thresholds and tariffs make planning difficult and reduce business value in the eyes of potential buyers. Stability encourages confidence on both sides of a transaction. And finally, policymakers should include ripple-effect analysis in budget decisions. When universities, hospitals or governments cut spending, small business vendors often absorb much of the shock. Policymakers should account for these downstream impacts when shaping local and federal budgets. If we want to truly support small businesses and their owners, it’s important to honor the lifetime arc of entrepreneurship – not just the launch and growth, but the retirement, too. Nancy Forster-Holt, Clinical Associate Professor of Innovation and Entrepreneurship, University of Rhode Island This article is republished from The Conversation under a Creative Commons license. Read the original article.
Small Business Saturday is a celebration of the vibrant shopping opportunities within our own communities. This annual event, held on the Saturday after Thanksgiving, encourages us to support local businesses that contribute to our economy and employ a significant portion of the workforce. By shopping at small businesses, we not only find unique and high-quality gifts but also nurture our neighborhoods, tax base, schools, and infrastructure. These businesses take pride in their craftsmanship, offering handcrafted items that make for thoughtful presents. So, when shopping this holiday season, remember to explore local stores, ask for assistance, and discover hidden gems while supporting your community.
Helping Kids Make Money Lessons Real in a Digital Age
(Family Features) In today’s world, it’s rare for kids to hand over a few crumpled dollar bills for a purchase. Most transactions happen online or with a tap of a card, which can make money feel less tangible to the next generation. However, that shift doesn’t mean financial lessons have to get lost – it just means they should be taught differently. From budgeting for a favorite purchase to learning about investing, the digital landscape provides ample opportunities to help kids build smart habits. Teach Real-World Money Management with Digital Tools One way to start is with a kid-friendly debit card connected to an app. These accounts allow children to manage their own spending while parents monitor activity. Being able to check balances in real time – and seeing the impact of a purchase immediately – helps kids understand budgeting in a hands-on way. When the balance gets low, the lesson is clear. Parents can also use digital purchases as teachable moments. A $10 virtual item in a game might sound appealing, but comparing it to something tangible, like a trip to the movies or a special snack, can help kids think about trade-offs and decide what’s worth the money. Use Saving Goals and Compound Interest to Encourage Smart Habits Saving is another concept technology can make more tangible. Setting a goal such as a new bike, a sports jersey or a piece of tech becomes more engaging when children can track their progress visually. Some apps even offer interest on savings, giving kids a first glimpse of how money can grow over time. As children grow into teens, their curiosity about money often expands into investing. This can be an ideal time to open a custodial brokerage account and explore concepts like diversification, risk and long-term strategy. Purchasing fractional shares of companies they recognize can make the learning process relatable. Teach Credit, Debt and Security Early It’s also important to cover topics like credit, debt and security before kids start managing money on their own. Teens should understand how borrowing works, why paying bills on time matters and how to protect themselves from identity theft. In some cases, freezing a minor’s credit until they are older can be a smart precaution. Keep the Conversation Going Above all, money lessons should be an ongoing conversation. Asking kids what they’re hearing from friends, teachers or online sources can lead to meaningful discussions and create teachable moments. The tools may have changed, but the goal remains the same: helping kids develop the skills and confidence to manage money wisely. By meeting them where they are in the digital world, parents can make financial lessons real, relevant and lasting. Visit schwabmoneywise.com for more ideas on how to help kids start saving, investing and more with videos, quizzes and articles designed especially for teens. Photo courtesy of Shutterstock SOURCE:Charles Schwab
(Family Features) Businesses that run efficiently often find continued, long-term success. However, running a small business comes with a multitude of challenges that can hinder productivity.
Between hiring employees, managing payroll, handling customer relations, delivering products, meeting with staff and other tasks, it’s important to take steps to help your business work smarter, not harder, while maintaining productivity. More efficient workdays mean more projects or tasks can be completed, giving you an advantage in a competitive marketplace.
To help improve productivity and create a more efficient work environment, consider these tips from the experts at Pitney Bowes, a global shipping and mailing company that has worked for more than 100 years to provide technology, logistics, financial services and solutions that help enterprises thrive and small business owners operate right from their homes including the PitneyShip Cube, which simplifies shipping packages and e-commerce orders while saving time and space.
Set Goals Setting goals for your operation is vital to building a productive business and ensuring your employees understand your vision and how they can actively contribute to the company’s success. Whether you’re a startup or an established business with multiple employees, set realistic, well-defined goals that are in line with your business strategy, like investing in office tools and solutions that can help you discover efficiencies. Periodically revisit those goals to ensure you’re on track to meet them and make any adjustments as necessary. For example, working from home may provide an opportunity to save on rent and enable you to allocate those savings toward upgraded office equipment.
Delegate Less Critical Responsibilities Remember, you can’t do it all by yourself. In the same way it’s important to prioritize your list of tasks, delegation is key to improving productivity. Passing on some of the work, such as designing email templates, writing blog posts, creating white papers and more, to your employees allows you to maximize your limited time. Think through additional ways for others to lessen the load, like using a cloud-based shipping solution to streamline the process and ensure alignment in task sharing. Even if you’re a solo entrepreneur, look at what tasks you may be able to outsource to a third-party vendor to free up some of your time.
Simplify Shipping If your business sells a product, shipping may be a time-consuming, expensive part of your operation. Leave the post office behind and save valuable time with an option like the PitneyShip Cube, an all-in-one, Wi-Fi-enabled thermal shipping label printer with a built-in scale. It includes companion software and can integrate with your current online store to automatically import order details then easily print the shipping labels and postage. You can weigh packages, compare discounted shipping rates and automatically share tracking notifications via email.
“One of the biggest barriers for small businesses are shipping costs,” said Shemin Nurmohamed, president, sending technology solutions, Pitney Bowes. “Our goal is to allow clients to take advantage of what larger shippers get in terms of discounts while saving them the critical time they need to work on their core businesses. With the PitneyShip Cube, the first shipping label printer of its kind with a built-in scale and companion software, users are able to ship faster and smarter. This product is ideal for both e-commerce and office shippers looking to save time and space by streamlining their processes and eliminating unnecessary equipment. Plus, it can save users money as it provides a discount of 3 cents on First Class stamps, up to 89% on USPS Priority Mail and up to 82% off UPS standard rates.”
By completing all the necessary tasks beforehand, you’ll skip the post office line and allow yourself to focus on more profitable endeavors. You can also track parcels throughout their shipping journey with data that can be shared with customers for a smooth shipping experience.
Streamline Software A quick and easy way to increase productivity and efficiency is taking advantage of technology like software as a service platforms. Particularly true in this age of hybrid and remote workers, cloud-based communications software can keep your team members on the same page, regardless of their location, to help your company keep up with important information such as ever-changing carrier rates to quickly identify the best shipping and fulfillment options. With available platforms that combine team messaging, video conferencing, task management, file sharing and storage, it can be simple to stay connected with your employees. Additional cloud-based software for everything from payroll to word processing and graphic design is also readily available to help further streamline your business’s technology. Knowledge is power and combining all this information in one place can give you greater control over your organization as a whole.
Learn from Your Customers When looking for ways to improve, start by asking your customers for honest feedback. Creating customer satisfaction surveys provides you with a fresh perspective while giving customers a voice so they can feel valued. Plus, it can help you build a rapport with customers as they know their voices are heard while you discover what’s working, what isn’t and ways you can improve the business.
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Find more solutions for improving your productivity and efficiency in the workplace at pitneybowes.com.
