Small Business Owner Retirements Hitting Rural American Especially Hard

An increasing number of small business owners are retiring. And in many communities – particularly rural ones – there aren’t enough young entrepreneurs looking to replace them.

According to the 2022 U.S. Census Bureau Small Business Survey, about 52 percent of U.S. employer firms are owned by people over 55. So as those in the Baby Boomer generation retire over the next several years, many more existing businesses are likely to close.

Renee Wiatt, research specialist with the North Central Regional Center for Rural Development at Purdue University, told KCUR NPR in Kansas City, “There’s a silver tsunami coming. There’s basically going to be this mass exodus of that baby boomer age who are going to all be retiring in the next five to 10 years.”

Of course, there are also many young people starting or considering starting their own businesses. But many of them are focused more on online businesses and starting their own ventures, rather than purchasing existing businesses. This trend seems to be hitting rural America especially hard since the closure of many small shops, restaurants, and service businesses may leave many residents of these communities without essential goods and services nearby.

Denis League was the owner of League Builders Supply in western Nebraska. Currently in his 60s, League spent a year trying to find a buyer before closing the shop. However, no one was interested given the financial realities of owning a small town business. Now, those who used to shop in his store have to drive an hour and a half to get to the next closest lumberyard.

League told KCUR, “You’re dealing with a pretty small base and we’re just not getting enough business here to make it interesting to anybody else, as far as anybody else wanting to buy it.”

Many older business owners in rural communities ran their operations for years, prioritizing their own lifestyle preferences and the needs of their communities over profits. But as younger generations start to take over, many have different needs and preferences that don’t align with those realities. Unfortunately, these changes seem to affect rural America in an especially negative way.

Though it’s unlikely that many new entrepreneurs will find it worthwhile to take over all of the existing businesses that are likely to close in the coming years, this shift does provide plenty of opportunities for those who are looking for this type of lifestyle or a way to serve their communities. However, entrepreneurs who go this route have to value in-person interactions and service more than the excitement or notoriety that comes with starting an online business or jumping into emerging fields.

Image: Envato

This article, "Small Business Owner Retirements Hitting Rural American Especially Hard" was first published on Small Business Trends