From Beneficial State Bank:
Linda and Gregory Coles founded their preschool, A Child’s Place, in their Queens, NY basement in 1983. Over the years it grew steadily and developed a deeply loyal community. Now they own a large building, employ more than 50 people and serve hundreds of families. Former students bring their own kids to A Child’s Place. The Coles have a similar generational commitment: their children now manage the school. As they looked to retire, they couldn’t imagine selling the business to an outside buyer who would change it or, more likely, tear it down to build condos in a hot housing market. So they asked an unusual question: could they sell the business they had built to the employees who had built it with them?
With support from The Working World, a technical assistance provider and lender in New York City, this is exactly what the Coles are doing. They are preserving community access to affordable and high-quality preschool in a city where preschool, especially for low-income families, is at crisis-level scarcity. They are also creating a new generation of local small business owners: their employees.
In communities across the country, more and more small business owners will begin asking: How can I preserve the legacy that I have built? Almost half of all business owners are now 55 years of age or older and every day 10,000 baby boomers retire in the U.S. More than 85% of all business owners do not have a succession plan in place and only 15% of businesses are passed along to children. Baby boomer retirements will cause more than $10 trillion in business assets to change hands over the next 5-20 years. As a result of those retiring without exit plans, in what is often called the “silver tsunami”, an estimated 70% of privately held businesses will be sold or closed. Additionally, Democracy at Work Institute’s research with the National Urban League shows that an estimated 284,000 business owners of color are nearing retirement nationally, including 40,000 African American business owners.