By: Lauren Heist, Daily Herald Staff Writer

September 13, 2005, Chicago Daily Herald

After 40 years of running a 200-employee trucking company in Lake in the Hills, Bob Boncosky was looking forward to retirement and some leisurely days on the golf links.

"At 62, I didn't feel like doing it anymore," he said.

But like many small business owners, Boncosky couldn't just call it quits.

He had a lot to think about. Should he hand the company over to his sons? Should he sell it to an outside company? What would happen to his employees?

"There's an awful lot that goes into the process until you get to that point," said Boncosky, now 65.

Experts believe the questions Boncosky wrestled with will become more common as younger business owners - those in the massive baby boom generation - reach retirement age.

According to Richard Jackim, president of The Christman Group LLC, a Palatine investment banking firm, one out of every two businesses will go up for sale in the next 10-15 years as baby boomers reach retirement age, and he said a total of $10 trillion could change hands as a result.

There are 77.7 million baby boomers in the United States - who are now between 41 and 59 years old - and they comprise 27.5 percent of the U.S. population.

Not surprisingly, that age group also makes up the largest pool of self-employed business owners. In 2002, about 28.3 percent of all businesses were owned by people age 45-54, according to data from the Small Business Administration.

And with 297,624 business with 500 or fewer employees in Cook, DuPage, Kane, Lake and McHenry counties as of 2004, according to the Illinois Department of Commerce and Economic Opportunity, that could mean thousands of businesses will soon come up for sale.

Jackim said very few businesses will be handed down to children.

"In the old days, it was the American dream for dads to start a business and have their sons or daughters take it over," Jackim said. "Now, an entire generation has been raised thinking that owning a business is not the glamorous thing it used to be."

Only one-third of all businesses go through a successful transition, whether the founder hands off the business to a son or daughter or sells it to an outside buyer, according to Lloyd Shefsky, founder of the Center for Family Enterprises at the Kellogg School of Management at Northwestern University.

Boncosky sold his company to a Texas company and two of his sons got jobs with the company.

But many businesses won't be as lucky, and as more baby boomers retire, that could also mean more businesses will close. Shefsky said that could cause more jobs to transfer overseas.

"This transition from prior ownership to next generation is happening at the same time we're going through all that global competition," Shefsky said.

Still, Shefsky isn't too worried about the effect of a mass baby boomer retirement.

"If our economy is solid it won't have any impact," he said.

To make sure businesses survive, experts say owners first need to develop an exit strategy and decide whether to hand the company over to family members or sell it.

If they decide to sell, they have to determine how much their business is worth.

Don Wilson, president of the Association of Small Business Development Centers in Virginia, said business owners should have their companies evaluated by an outside consultant.

"An awful lot of small business owners often have an inflated idea of what their business is worth," he said.

Wilson said owners should also try to boost sales and reduce debt before putting the business on the market.

"Try to make that business as successful as possible ... so when someone looks at their balance sheet they say, 'This is a good business,'" Wilson said.

Experts say it takes about two to five years to successfully hand over or sell a business.

So even though baby boomers are still in their prime working years, Jackim said it's not too early to start planning.

"Our message to business owners is if you thought about selling a few years ago, now is a good time to do it," he said.