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In light of the United Kingdom’s increasing number of business owners reaching the age of retirement, there is a myriad of established businesses becoming available for acquisition on Daltons Business. So, let’s explore why snagging one of these businesses from retirees is a golden opportunity for ambitious entrepreneurs and small businesses.
Rising Number of Retirees
As of 2021, 18.5% of the populace in the United Kingdom is aged 65 years or older, a figure anticipated to ascend to 20.7% by 2031, according to data from the Office for National Statistics (ONS, 2021). As a result, there is an influx of retirees, with approximately 1,000 people retiring every day in the UK (DWP, 2021). This demographic shift directly impacts the business landscape, as a significant number of SME owners are also approaching retirement age.
The Dominance of Older SME Owners
The Federation of Small Businesses (FSB) found that a noteworthy 62% of UK SME are owned by entrepreneurs aged 55 of age or older. Given the multitude of SMEs currently active in the country, this means that a substantial number of businesses are about to hit the market as the founder’s eye up retirement by looking for new ownership for their businesses
The Value of a Retiree-Owned Business
Retiree-owned businesses are often attractive acquisition targets because they typically have:
- Established businesses benefit from loyal customer bases built up over years of operation, ensuring steady revenue streams.
- Efficient and streamlined processes already in place, refined over time by the retiree owner.
- Long-standing businesses often have developed unique products, services, or proprietary knowledge, providing a competitive edge through valuable intellectual property.
Growth Opportunities and Synergies
Acquiring retiree-owned SMEs can provide several key benefits, such as:
- Access to new markets and customer segments: Acquiring an established business can help you quickly expand your reach and tap into new customer bases.
- Expansion of product and service offerings: By acquiring a business with complementary products or services, you can diversify your offerings and increase revenue streams.
- Consolidation of market share: The acquisition of a competitor can lead to increased market share and a stronger competitive position.
- Operational efficiencies and cost savings: Combining resources and streamlining operations can result in cost savings and improved profitability.
- Knowledge transfer and employee retention: Acquiring a retiree-owned business allows you to retain experienced staff, ensuring a smooth transition and continuity of operations.
The Financial Potential of Acquiring Retiree-Owned SMEs
The financial potential of acquiring retiree-owned SMEs lies not only in the individual value of the acquired businesses but also in the increased value and profitability of the group as a whole. By acquiring and consolidating multiple businesses, the group’s overall value can increase due to the inherent value of larger, more diversified businesses. For example, one business making £2 million in revenue might be worth 3x annual profits, but two identical businesses, each making £2 million in revenue, operating within the same group, might be worth 4x annual profits. In addition to the value creation through acquisition, the group can further increase its profits by realising synergies from the acquired businesses. A small increase in revenue and decrease in cost of each business can result in a large increase in group profits.
By capitalising on this trend and leveraging the benefits and synergies that come with acquiring retiree-owned businesses, ambitious entrepreneurs can unlock significant growth potential, increase profitability, and secure long-term success in their respective industries. Search for retirement sale
If you are looking to retire Daltons Business is here to help you transistion out of business by connecting you with the right buyer for your business. Click here to find out more about our retirement sale plans
