The “Silver Tsunami” Facing Small Business Owners

A major transition is coming for small businesses across the country - and most communities aren’t talking about it enough.

In this episode of Chamber Amplified from the Findlay-Hancock County Chamber of Commerce, Doug Jenkins sits down with Josh Robb from Hixon Zuercher Capital Management to discuss the growing wave of business owner retirements expected over the next decade and what it could mean for local communities.

They discuss:

•  why succession planning matters, 
•  how retiring owners can prepare their businesses for transition, 
•  why local ownership matters to a community, 
•  how entrepreneurs can position themselves to buy existing businesses, 
•  and the emotional side of stepping away from a company you spent decades building. 

The conversation also explores how this “silver tsunami” could impact local leadership, charitable giving, workforce stability, and the future character of communities like Findlay.

If you’re a business owner, future entrepreneur, investor, or simply someone who cares about the future of local business, this episode is for you.

Music and sound effects obtained from https://www.zapsplat.com

Transcript

Why Succession Planning Matters

Doug Jenkins 0:04

Hello everyone and welcome to another edition of Chamber Amplified, brought to you by the Findlay Hancock County Chamber of Commerce. I'm your host, Doug Jenkins. Each week on the podcast, we're talking about the things that matter the most to local businesses and organizations, from workforce and leadership development to marketing, IT issues, and just the everyday realities of running something that serves our community. Today we're talking about something you might not have thought of, although we have covered it a few times here on the podcast. There's a big shift quietly happening in the local business community right now, and that's longtime business owners who are approaching retirement. It's not just something happening in Findlay and Hancock County, it's happening all across the country. And it's not just a financial planning issue for those business owners either. It's also a community issue. We'll get into that. So over the next five to ten years, many locally owned businesses are going to do one of the following. They'll transition into new local ownership, they'll sell to outside interests, or they'll close entirely. Those are the three big things that can happen. So if communities don't develop the next generation of local business owners and investors, the makeup of the local business community could look drastically different in just a decade. A lot of people don't realize just how many businesses are owned by baby boomers who are now reaching that retirement age or have blown past it in some regards. So business succession planning affects a lot of things like jobs, local leadership, charitable giving in nonprofits, downtown areas, and just the overall character of a community. And one of the most important points from this interview with Josh Robb of Hixon Zuercher Capital Management is that business owners deserve to get good value for what they've spent decades building. And we're going to get into how they go about that and the things you need to be doing now. Another key point: communities need local people ready to step in and continue those businesses, which means there are opportunities. Future entrepreneurs may not have to start from scratch. You might have an idea and there might be a business who's in that space where you can just step into it as the new owner. And they might also be able to buy that existing business with customers, systems, and infrastructure already in place. So this episode is really about preparing both sides: the owners preparing to exit and the next generation preparing to lead. That's a long-winded intro, but we're covering a lot. It's an issue that I feel very, very passionate about and want to make sure we're setting the table properly for it. If you enjoy the podcast, don't forget to leave us a rating and review and make sure to share it with others. We're also on YouTube now. So if you really want to share the message, it's as easy as sharing a YouTube link in your Facebook feed. Now, let's get into it. So this is a topic that uh really kind of came in front of us, I don't know, a year or two years ago or so. Uh and the number is staggering when you look at business owners who are contemplating retirement over the next five to ten years. Uh, I know that you help people with their exit planning when it comes to that, but when you look at just the overall statistics of this, what does that look like?

Speaker 3:00

Yeah, you're seeing that not just for business owners, but the baby boomer generation is entering that age where you do see a lot of them exiting full-time work. And as a result of that, a lot of those baby boomers are business owners. And so as they're looking to make that transition, the for the average worker who is just an employee, it's just I'm gonna be done and I'm gonna retire to the next spot. But for business owners, the key aspect is what's gonna happen with this business I created and build up. What's the next phase for that? Is it someone taking it over? Is it selling it to someone that's going to merge it into theirs? What happened? So there's a little bit more complexity for a business owner when they're looking to exit out of the workforce. Is they have created this business that you have to plan for that, not just their own retirement, but the next phase of that business as well.

Doug Jenkins 3:59

So I want to talk about the what the business owners should be doing if they're considering retirement. But before we get into that, I just want to talk about this on the community side and what this means for the the larger business community. When you have uh the number of people who are looking to retire out of their business over the next decade or so coming, they either one have someone in mind to sell it to, or maybe they have a family member who's going to take over, or that's that's the plus side, but there are two negative sides to that. One, they can sell it to an outside interest who isn't really as focused on the community as maybe the original business owner or even the second generation of that business would be, or they just close their doors. And while this first option, you know, you can deal with that. Having businesses just close their doors, that can be very tough on a community.

Speaker 4:49

Yeah, and you're right. And that um, you know, a lot of times that original owner, they have their passions, and when their business is doing well, they're gonna funnel some of that success towards those passions. So if it's you know the community they live in, um, maybe some organizations within their nonprofits, you you see that passion flow through. And then when there's a change in ownership, you mentioned it, that next generation may not have the same passions. They may not be from the same area. So you do see kind of a shift within the community when you have that exchange of ownership where sometimes the people you could count on or rely on to support those nonprofits and community events, that next group may not be as passionate or see the value yet and why they should continue doing that. So that is always one of those concerns that you know no one thinks through when you're business planning and what are those organizations you're supporting that may lose some of that support, and how do we connect them with that new owner along the way?

Start Planning Five To Ten Years

Doug Jenkins 5:47

We'll talk a little bit about new owners later in the podcast, but right now let's focus on that person who's hey, I've been running this business 20, 30 years. It's uh it's time for me to enjoy life after work. But I've got this business. What are the things that they need to be thinking about ahead of time? And before we even get into that, how far ahead of time do they need to be starting to think about these types of things?

Letting Go Of Founder Identity

Speaker 6:10

I guess part of that really depends on what their transition plan is. You know, if it's a transition to people currently in the business, there's you know, some kind of synergy that happens already. They're already familiar with the ins and outs. And if you kind of ease them into some of those ownership roles, it's a lot smoother transaction. But you know, five to ten years out of that retirement is a good time to start those plans of how that transition will happen. Because what you don't want with your clients or your vendors is to have a quick disruption where there's there hasn't been communication on what's next and where it's going. And then the other side is, you know, even before that five to ten years of the business transition for yourself understanding what do I need, you know, that goes just to kind of retirement planning for anyone is what do I need once I'm done working? How much do I need to save to cover myself and my family for the rest of our life? You know, those happen 20, 30 years out. But the actual business decisions and those, you know, five to 10 years out is a good window to start that planning. Um, and then as you get closer and closer, what you do is you're gonna start giving more access to that next group of people, whether it's employees, uh, another owner, a sibling, a kid, whoever that is that's taking that over, you're gonna give them a little bit more visibility on how the operations work, how the ins and outs of the business flow, so that they can continue to ask questions with you while you're there. You don't want to just hand them the keys one day and say, figure it out and then walk away.

Doug Jenkins 7:45

Do you find that's hard for some business owners to do? Not necessarily because they don't want to, but because there is a certain finality to it that if I start letting these people take over, I'm now on my way out. And maybe I wasn't mentally ready for that.

Speaker 7:59

Oh, for sure. You know, in you know, for a lot of people, and this is something that we do at our at our firm a lot, is talk about kind of the non-financial side of retirement. And what that is, is your identity is driven by who you are, and part of who you are is what you do during your working career. You know, a lot of times when you meet somebody new, one of the questions you ask them is, what do you do for a living? Right. And when you retire, that question is a little harder to answer. And so that piece of your identity goes away. And it's even more so for a business owner because you spent a couple decades probably of nurturing and building up this business from nothing to where it is. And so that's an if even bigger piece of your identity. So to then step away from that, to release that control and leave it in the hands of somebody else is a hard thing to do. So you're right. I see a lot of business owners struggle with that last step, right? They want to have some freedom, they want to be done, but letting go of this thing that they created that they're very passionate about, that they they, you know, they they've put their blood, sweat, and tears into to then completely hand it over to somebody else. That's a hard thing to do. So, yeah, there's a lot of times where that owner maybe stays on and kind of has a hard time completely letting go during that that phase.

Doug Jenkins 9:20

A lot of times, I know, and we've talked about this on the podcast with with other guests because we've been trying to focus on this issue, is uh the owner will overvalue what the business is worth because they have all that sweat equity in it. And so when it comes time to either sell or whatever they want to do, it's hard for them to realistically gauge the worth of the business. And a lot of times it's because a lot of the worth in that business comes through them, them they themselves being tied into that business. How often do you run into that?

Speaker 9:53

Yeah, and you know if I worked hard for this, what I value it as versus what the buyer values at it are usually two totally different numbers because you know there's there's this intrinsic value that I assign to it because of how much effort I put into it. But the real question is what is somebody willing to pay for that to take it over to have it? And then you got to break out, you know, what are they actually buying? And so depending on what your business is, is there tangible things that they're purchasing? That's actually a lot easier to value because you can look at what the cost is for buying that versus buying something new. If you have, you know, clients or a book of business or something that's a little bit less tangible. What am I actually getting and what am I paying for to get the access to those customers in a sense? And that's a little bit harder to value. Uh every industry is different on how they value that. But yeah, it is hard to put a number to, you know, see a lot of people using a third party and outside source to get that valuation. And that's usually the best way because you remove that emotion. You know, if you're gonna ask that business owner, what's this worth, their idea may be a little bit different than what the market's willing to pay for it.

Doug Jenkins 11:02

Actually, we've even had a broker of that type on the podcast here to talk about that. One of the things I think that they mentioned was that that's why you start, like you said, planning for this five, 10 years ahead of the fact. So that way you have all of your books put together. You can kind of start to emotionally make your peace with it. You can separate out what you think the business is worth with what someone is willing to pay. But that's a big reason why you want to give yourself a long runway for this.

Speaker 11:29

Oh, yeah. And you can make adjustments. So if you're looking for something in particular, you can work on the business over those five, 10 years to really turn it into that business that's most appealing. So if it's, you know, you know, depending on what you do, but you know, how often are you closing new clients or you know, what's your overhead cost? You can make those adjustments over time so that your book looks way better than it did before because you've improved it for the metrics that your industry is looking for for that sale.

Doug Jenkins 12:00

Have you worked with businesses who have given themselves a shorter runway? And what were some of the things that you had to do since you didn't have the the length of time to do with the deal with the things that we've been talking about?

Speaker 12:12

Yeah, you know, sometimes it's unfortunate where there's health issues or family situations that it changed that they hadn't actually planned for a short transition. But in those instances, you you let them know, you know, trading time, there's a cost to that. So if you're shortening that time frame, there is a trade-off. But in the end, you know, you got to go back to what are the most important things, which is again getting a good valuation and then understanding what are the most important things the next person needs to know to make this successful, and then focusing on that. Um, because again, if you're running a good business, it will continue to run as you have that transition. But what are the key things that that next person needs to know to make it as smooth as possible? But yeah, unfortunately, sometimes you don't have that luxury of five to ten years out, and you just have to really focus in on the most important things that you can have an impact on.

Doug Jenkins 13:02

We've talked a little bit about this at the beginning, but I am curious, just in your interaction with people who are planning this process, how important is it for them that their business stay involved in the community and whether it's through charitable donations or nonprofit donations, whatever the case may be, when you talk to that business owner who's who's getting ready to call it a day, how where does that enter into the equation for them? Is it one of the last things they think about, or is it sometimes some of the first things they think about?

Speaker 13:29

It depends on where their passions lie, but for a lot of them, it is part of that conversation. Most of them are gonna get a large influx of cash during this transition, this sale. So some of it comes down to tax planning. You know, is this a good time to make charitable contributions into some sort of donor vice fund account or the community foundation, or use some sort of tax strategy? Because if you're gonna have a large income that year, do you want to offset that with charitable giving? Um, and then along the way is what are those organizations that you want to be involved in even post-your work that would be, you know, making those connections that at that point, you may have more time. Maybe part of that is more volunteering. So, yeah, there's a lot that have that conversation because again, they're usually very passionate people and they're driven and they're looking for something new to fill that spot in. And charitable work is usually where they end up.

Doug Jenkins 14:23

So I want to flip it around and look at from look at it from the opposite perspective is I don't know how many times a month I talk to someone who's just interested in starting their own business uh in the area. And one of the things that I try to tell them is if you have an idea for a business, but you're not really sure which way to go, there might be businesses for sale that you're not aware of. Uh, and it's starting to become, we need to start we need to start developing that next class of people who invest in local businesses. So for someone who's thinking, maybe I want to own buildings, or maybe I would like to, I really like that restaurant and I would hate to see it close. Maybe I want to take over when when they're ready to call it a day, what are the preparations they need to start being doing or need to start doing now and for that day when maybe that opportunity opens up?

Speaker 15:14

Yeah. You know, preparation-wise is getting your own, because if you're gonna, you know, need a loan or whatever to make that purchase, getting your own personal finances in order so that just like the business sailing, you know kind of what limits you have, how much can I afford? What would that financing look like? So getting that organized and structured and then saving up for a down payment. Most businesses and most banks are gonna want some sort of down payment for that transaction. So that's something you know you can do on the front end to get organized and get set up for the actual purchase. And then the other side is having those conversations with the people who know. So realtors, especially those that do business sales, having those conversations saying, Hey, what do you know that's out there or what have you heard? And then if you're, you know, like for instance, that you say, I'm really interested in restaurants, you talk to them and say, Hey, if you know of any, I'd love to just have an open dialogue and conversation for people who may be thinking of selling. And so, you know, getting that connecting point, because you're right, is a lot of times there might be a seller who's trying but can't get in front of the right people who are wanting to buy, and just making yourself available and out there is always a great way of getting started.

Doug Jenkins 16:21

And I think if you get a hold of someone, you know, a year or so before they're ready to sell the business, there's that opportunity for mentorship before you take over as a new investor or a new owner in it. And that probably goes a long way into making that transition a little more seamless. I don't think it's ever gonna be 100%, hey, we didn't miss a beat when uh we switched from one owner to another. But having that opportunity, like we said, where you can start working someone into the business a little bit more, that's gonna make for a little bit more of a seamless opportunity.

Speaker 16:53

Definitely. Yeah, any anytime you can make that connection, and even if it doesn't work out, that's probably an industry you're interested in, and you may be able to make other connections. But learning the industry, learning the job, that's a great way to get that starting point.

Doug Jenkins 17:07

I'm curious, just on your end, do you run into people who are interested in maybe putting a group together to buy a property or to get a little bit more involved in the business community?

Build Your Advisor And Mentor Team

Speaker 17:18

You see that, you see that sometimes. Um, it's funny because you know, a lot of times those same people are the ones that are maybe own a small business because they're they have that passion. They're already driven that way. And then when they see that kind of success, they're kind of expanding outward and saying, What else can I get involved in? But you're right, there's definitely a a group of people who are are willing to take that risk. And when they see those opportunities, sometimes it's collaborating with others because they can't maybe do it on their own, but they want to be involved in it. But yeah, you're there's definitely quite a few people out there in this community that are interested in doing that.

Doug Jenkins 17:52

I think the bottom line on it is do not go it alone. And I think that's a tough pill for some people to swallow because if you're an entrepreneur, you kind of want to do it your way. And so having a conversation with someone maybe is a little counterintuitive to you. But I think talking to people who already own a business, talking to a financial advisor, uh and things like that goes a long way, but you definitely have to be willing to have those conversations.

Speaker 18:20

Oh, yeah. And even if you're gonna end up doing it on your own, you mentioned the mentorship, right? Being a uh getting mentored, having some sort of even just people you can bounce ideas off of. It doesn't mean they have to maybe necessarily financially be involved, but building up that network and community is huge uh for people, especially entrepreneurs who are gonna get started in what's a very stressful uh part of the business world is getting something new up and off the ground. And so, yeah, that's definitely having people on your side to help you along the way is great.

Doug Jenkins 18:53

Josh, uh, if someone would want to talk to you about uh any of these topics, what's the best way to do that?

Speaker 18:59

Yeah, they can email me. Uh my email is J Rob, J R O B B at Hzcapital.com, or they can call our office at 419-425-2400. All right, Josh, we appreciate you being on the podcast today. Well, thank you very much. I enjoyed it.

Closing Takeaways For The Community

Doug Jenkins 19:15

Just a few thoughts before we wrap up this edition of Chamber Amplified. Succession planning, it's not something that business owners should be waiting until the last minute to think about. And I think most business owners realize that, but then you get caught up in the day-to-day of the business and you never get around to that until it's too late. So that's something to have on the radar. The earlier a business owner starts planning for these things, the more options they usually have. And transitioning a business well protects the employees, the customers, the vendors, and the broader community. Local ownership really matters here. Just think about how our local businesses are tied to the community beyond just the goods and services that they offer. And if that goes away, a lot of the character of the community goes away. For potential entrepreneurs, there could be opportunities sitting right in front of you that you haven't even considered yet, so it's good to get in the mix to learn what might be available. And buying an existing business can sometimes be less risky than building one entirely from scratch. Again, these aren't conversations you want to navigate alone. Talk to advisors, talk to lenders, look for a mentor, business brokers, other existing owners. It's a good conversation to be having right now so that we're not dealing with the implications of it 10 years from now, having not prepared. Well, that'll do it for another edition of Chamber Amplified. This is a free podcast available to the community, made possible by the investment of our members at the Findlay Hancock County Chamber of Commerce. If you're looking at ways to get your business involved in the community, a lot of times the chamber is the best place to start. If you'd like to learn more, just send me an email, Djenkins at Findlay Hancock Chamber.com, and we can talk about how an investment in the chamber not only helps your business, but the business community as a whole. Thanks again for listening, and we'll see you next time on Chamber Amplified from the Findlay Hancock County Chamber of Commerce.