The mass exodus of baby boomers from small businesses has been predicted for several years now. While the “tsunami” of boomer biz owners looking for the exit hasn’t happened, we may be in the early stages of that phenomenon. The WSJ reports that the amount of small businesses for sale is at a 6 year high, with the median sales price up 12% over last year.
This week we got to sit down with Doug and Laurie Duncan, a pair of new small business owners, fresh off a changing of the guard. 50 years ago Laurie’s dad started his heating and air business, frustrated with dishonest practices and determined to provide a better service. Over the last 2 years, Laurie and Doug have gone through the long process of taking over the company, learning both about the business and themselves in the process.
And wouldn’t ya know it, a few of the lessons they learned are solid business principles any investor could benefit from:
- Just because you can do a job, doesn’t mean you should. Does the business you’re investing in have a clear understanding of “Their Lane”? Doug says you need a willingness to walk away from revenue that doesn’t fit the business.
- Digitizing & adding a layer of technology is great but don’t expect it to happen overnight. Transition to automation takes consistent work but it’s worth it in the end.
- Focus on small changes. Sometimes slight tweaks to planning, purchasing, or scheduling can have a big impact on profit. Laurie’s example – scheduling light Mondays & Fridays allows for high-value “crisis” last-minute jobs.
- Rats and tight places don’t mix well. 😵
So maybe the last one doesn’t have an immediate investing application, but what is certain is that this new crop of owners is younger and more diverse, signaling an exciting increase in access to capital and resources for all. And like Doug and Laurie, this group is focused on efficiency and scale, a promising market outlook for hungry investors like you.