The “Silver Tsunami” is mostly hype

Hey friends!

There’s a whole industry out there selling the dream of buying a business. And the pitch always starts with the “Silver Tsunami”:

10,000 baby boomers are retiring every day. 8 to 10% of them own businesses. You could walk into one and become a millionaire overnight.

But here’s the uncomfortable truth:

Finding a great business to buy is incredibly hard.

So why is there so much money in this space?

(By the way: I’m changing the name of my newsletter from “Small Business MBA” to “Girdley’s Letter”. No significant content changes, just a better way to label what you’re getting.)

Back in 2017, I went out looking to buy a software business. 

I spent 6 months cold emailing, calling, and talking to sellers. Most either weren’t ready to sell or wanted insane 20x earnings-type multiples.

This wasn’t some once-in-a-lifetime “silver tsunami.” It was a grind.

And that’s the typical experience. Ask anyone who’s run a search fund. Most spend 12 to 18 months just trying to land their first deal.

Examining the numbers, the gap between hype and reality is substantial.

The SBA 7(a) loan program — one of the main financing tools for small business acquisitions — only supports around 5,000 deals per year.

Not 300,000. Not 100,000. Five thousand.

So when the “buy a business” gurus talk about this tidal wave of desperate boomers… well, where is it?

Here’s rule number one of being a guru: you’re not selling a product or a book or a course. You’re selling a dream.

So when they tell you to buy a business, they’re saying “imagine your future self, where you’re a business owner… doesn’t that feel great?” It’s Marketing 101.

To be clear, I’m not against courses or info products. I’ve made some myself. Heck, I even made one about how to find a great business to buy. 

In it, we told the unsexy truth: this is hard work, here’s how to do it. 

(My team will kill me if I don’t drop the link.)

But some people are taking it way too far. The other day I saw an Instagram ad with a young guy telling people that buying a business was easy. His pitch was, “Work with us and we’ll find you the business, structure the deal, help you get financing, and even find someone to come in and run the business for you.”

What a dream! I bet he also washes your car every Sunday!

And I get why he’s saying this stuff. The offer has to be extreme to break through the noise. And people want to believe unrealistic dreams.

But it won’t result in you buying a business.

And that’s where I have a problem with all this.

Buying a business is a viable path to entrepreneurship for many people. If you’re a 1 to 10 person, and you’d rather scale a business than start one, that’s a perfectly good, healthy approach to life. 

But don’t believe people selling you impossible dreams.

There’s no such thing as a free lunch.

3 things from this week

• Whenever I start to worry about money, I remind myself: at least I’m not $34 trillion in debt.

• This business for sale is probably some people’s dream and some people’s nightmare. Would you buy a helicopter tourism business?

• Once upon a time, helpful threads like this one would do huge numbers. These days, not so much. But I’m doing them anyway — if it helps one person out of a scrape, it’s worth it. Read it here!

That’s it for today!

Got any crazy guru experiences? I’d love to hear them. Hit reply.

Thanks for reading,

Michael

P.S. I’ve got a whole summer’s worth of free events coming up. Some of them are with partners like Heather, some of them are just me. I love to teach, so I’m making these as helpful as possible. Check out the whole calendar here!

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