Boomers are selling off their businesses. Millennials are swooping in.

When George Coulam decided to retire, he had a problem. He owned the Texas Renaissance Festival — which bills itself as the largest such gathering in America, drawing over 500,000 annual visitors — and he needed to find a successor. Several longtime associates were eager to take over, but Coulam had run the fair for decades; he wanted his pride and joy to land in the right hands. Suitor after suitor put in bids to buy the business, but none felt like the right fit.

Across the US, older business owners are arriving at the same juncture. Over half of small businesses — those with a single owner and fewer than 500 employees — are owned by people over 50. The wealth-management firm NewEdge Wealth has estimated that boomer-owned businesses in the US are worth about $10 trillion. Those boomers can't retire and enjoy their sunset years until they figure out what to do with their businesses. Can a relative or longtime employee take over? Should they shut down? Or can they sell?

For millennials with the entrepreneurial bug, this boomer retirement bomb could be a boon. As they enter their prime wealth-building years, many are anxious about how they'll save up for retirement; in a turbulent housing market, buying an existing business offers a tantalizing opportunity. The market-research firm Forrester found in a survey it conducted last year that 64% of people buying businesses were millennials or younger. Sure, many small businesses aren't glamorous — think dental practices or accounting firms — and they involve long hours and unpredictable market forces. But they might just be a better pathway to retirement than building a business from scratch.

Private-equity firms have long seen the wisdom in acquiring small businesses. Why should they be the only ones reaping the fruits of boomer labor?

In the late 1990s, Nancy Forster-Holt, an accountant at Ernst & Young, was transferred from Sacramento, California, to Maine. She fell in love with the state and her now-husband, Steve Holt. They decided to buy a business together. Since she had experience as a chief financial officer and he was an engineer, they focused on manufacturing companies. They soon found Shaw & Tenney, a century-and-a-half-old manufacturer of wooden paddles and oars in Orono. Before the Holts bought it in 2003, Shaw & Tenney had had only two other owners: the Tenney family, which operated it until 1978, and Paul and Helen Reagan.

When they decided to retire two years ago, the Holts thought their children might want to take over. But no one showed any interest. "They all grew up in it and worked in it," Forster-Holt, who's also a clinical associate professor at the University of Rhode Island's business school, told me. "Our last one graduated in 2022, and he's a food scientist, and we're a manufacturer of oars and paddles." The couple realized they had to sell, and they started marketing the company while planning the graduation party.

That's when Jennifer and Neil Gutekunst came along. When they acquired Shaw & Tenney in 2023, they had two other small businesses under their belt. They took what the Holts built — a recognized brand, equipment, a highly skilled workforce, and customer relationships — and ran with it.

"The businesses we purchased all had cash day one," Neil Gutekunst said. Neither of the Gutekunsts had a sales background, but the three companies they purchased had strong customer bases and solid reputations. All they had to do was keep things running.

The US Small Business Administration said in July that there were nearly 35 million small businesses in the US. The vast majority of those, 82%, had no employees other than the owner, meaning they probably wouldn't make sense to sell. But each year, about 65,000 of the remaining chunk of businesses are listed on BizBuySell, an online listing service of businesses for sale.

Edie Ellis, who runs a consulting firm in Chicago and has advised industrial companies on acquisitions, said the peak of small-business sales began when baby boomers started to turn 60, in about 2006. Many owners found that their children didn't want to take over, so they looked for buyers. The kids of small-business owners "run the opposite direction, because they saw the lifestyle," Ellis said. "They saw that mom and dad worked 24/7, they didn't have a weekend off, you know? They don't want to do that."

Data from BizBuySell indicates that sales of small businesses have been lower since the 2006 peak and dipped during the pandemic, but quarterly transaction volume has largely recovered from 2020 and has held steady. In the second quarter of this year, BizBuySell had listings for over 35,000 businesses with a median asking price of $395,000 and a median revenue of over $700,000 — meanwhile, in the housing market, the median home price recently hit $412,000. Demand for these businesses is growing, pushing the median sales price up 25% over last year. While not all of these companies will be a good investment, the right venture could offer an edge over more traditional wealth-building routes.

The upside of buying an existing small business, besides inheriting foundational elements — a brand, suppliers, systems, and customers — is that financing an acquisition is often easier than financing a brand-new business. You don't need to have hundreds of thousands in cash on hand to take advantage. In some cases, sellers are willing to assist in financing because they want the business out of their hands. Some will accept deferred compensation or a share of future earnings as a way to lessen the up-front cost. Buyers with good credit can also borrow money through the Small Business Administration.

Existing companies often have assets that can help make financing easier. If the business owns land, buildings, or equipment, that can serve as collateral for a bank loan. Plus, with revenue already coming in the door, lenders know they won't have to wait to receive payment.

Of course, there are some logistical challenges in finding the right business — fewer than a quarter of the businesses listed on BizBuySell sell in a given year. For one thing, great small businesses aren't always in places where people want to move. Dave Specht, the director of the Drucker School Global Family Business Institute at Claremont Graduate University, told me that the situation is compounded when people in small towns don't want to talk to their neighbors about their plans for their businesses. "There's great secrecy around the timing of transitions and things like that," Specht, who lives in a small town in Washington, said. Often, potential buyers end up looking elsewhere. "They go to a larger town or a larger city because they just don't know."

Some businesses need a buyer with a combination of skills that isn't easy to find. Some have real estate that's worth more than the rest of the assets. And some are "lifestyle companies," such as bookstores, yarn stores, and other Main Street businesses, that don't generate much profit beyond the owner's small salary.

Other businesses might have hidden problems, Ellis told me. "Have they been paying their bills? Have they been paying the IRS? You don't know what you don't know," she said.

The challenges don't stop once you've made the purchase. Fewer than two-thirds of small businesses in the US in 2022 were profitable, and over a million businesses of all sizes close each year. "You get people that come up from Wall Street and they want to buy a bed-and-breakfast in Maine because they've always loved Maine," Forster-Holt said. "But guess what? They're working 24/7, 365, helping other people enjoy Maine."

She's noticed that people with experience working in corporations sometimes struggle with the flat hierarchy and ever-changing priorities of a small business. "You come to work and you've got your to-do list, and a truck has hit your building, and now your day is something completely different," she said. "Do you have the temperament for that?"

The Holts found that they did. "I loved working there," Forster-Holt told me. And those who can roll with a little bit of upheaval can reap the financial upsides.

Private-equity firms are certainly familiar with those upsides. The American Investment Council reported that 85% of private-equity investments in 2022 were small businesses. Citing the data provider Preqin, PwC recently reported that, as of the end of May, private equity firms had $1 trillion in liquid assets that were looking for investments. These companies are interested in small businesses that operate similarly in many markets and can be rolled up together, such as plumbing or HVAC companies.

"Private equity is smart in targeting family businesses," Specht told me. "Many of them are great businesses." Fortunately for millennial buyers, many family owners would prefer not to deal with Wall Street.

In 2022, Dinkel's Bakery, a beloved Chicago institution, closed after a century in business. Norm Dinkel, the third-generation owner, wanted to retire, and he couldn't find a buyer who also wanted to operate the business. Anyone fortunate enough to have had a Dinkel's chocolate doughnut or fresh strawberry paczki knows the loss.

Traditionally, small businesses were family businesses, and the eldest male child was expected to take it over when the patriarch was ready to step down. That got Dinkel's through a hundred years of operation. Many small-business owners want to keep the company in the family, said Brian Brogan, who works as a wealth advisor to family-business owners and teaches in the family-business program at Saint Joseph's University in Pennsylvania. If that isn't an option, they look for someone they can trust to carry on the business.

Coulam, the owner of the Texas Renaissance Festival, is slightly older than the average boomer business owner — he's entering his late 80s. But even he hasn't found a suitable buyer. His succession search, which was documented in the recent HBO series "Ren Faire," highlights the difficulty of passing along a business someone spent their whole life building. With small businesses especially, it's not just about the numbers — it's a very personal decision.

Still, for buyers able to find the right match, snatching up an existing business could be a smart move. For the Gutekunsts, one acquisition intended as a lifestyle change has turned into a collection of businesses built around southern Maine's deep tradition of woodcrafting. "It's fun," Jennifer Gutekunst tells me. It also beats not having a satisfying retirement plan.

Last year I wrote about the myth of the "Great Boomer Wealth Transfer" — about how most boomers don't have many assets to pass along, and those that do are likely to get eaten up by the high cost of elder care. But even if you can't plan on receiving an inheritance, you can create one for yourself (and your own children). Buying up small businesses allows people without wealthy boomer parents to cash in on the trillions of dollars of wealth the generation is sitting on.

Ann C. Logue is a writer specializing in business and finance. She lives in Chicago.