For a while now, there’s been concern about what will happen when baby boomer business owners retire. Known as the “silver tsunami,” this wave of retirees could bring with it a number of shuttered businesses, or companies that sell out so owners can reap the benefits of their investments. This would keep those businesses out of the hands of younger, new owners and leave employees needing to find new jobs.
According to a new study based on Census Data conducted by WorkWise, a business management software provider, these concerns are pretty well founded—but don’t lament the loss of small, boomer-owned businesses just yet. While baby boomers still own the most businesses in the U.S., Gen X members aren’t too far behind. Millennials, however, still have a lot of catching up to do.
Though just four states across the U.S.—Nevada, Utah, North Dakota, and Idaho—count more Gen X than boomer business owners, overall state-by-state percentages of owners from both generations are relatively on par. The percentage of Gen X business owners in most states is generally in the 40% range, while it’s in the high 40% or low 50% area for boomers. Utah is one exception, where 51.56% of business owners are from Gen X and just 39.98% are boomers. The lowest percentage of Gen X business owners live in New Mexico, at 38.53%, and the highest concentration of boomer business owners are in Hawaii, accounting for 57.15%.
Hawaii also happens to be home to the lowest concentration of young business owners. Just 3.65% are millennials, which this study characterizes as “aged 35 or under.” The highest concentration of millennial business owners is located in North Dakota, where they make up 9.42% of the company-owning population. (North Dakota’s numbers may have to do with the prevalence of millennials in the state in general. As of April, Prairie Business Magazine reported that North Dakota has the highest proportion of 18 to 34-year-olds in the country.)
In terms of total numbers, in heavily populated states like California, New York, and Texas, millennial business owners number in the tens of thousands, exceeding the number of young business owners in more sparsely populated states. There are 42,164 millennial-owned businesses in California, 22,851 in New York, and 22,642 in Texas. California also boasts the most business owners younger than 25, with 3,454. Still, the percentage of businesses owned by people 35 and younger is just 6.46%.
The low numbers of millennial-owned businesses shouldn’t necessarily be alarming. Multiple studies have found that the average entrepreneur’s age is 40 when they launch their first startup, while “high-growth” startups are helmed, on average, by 45-year-olds. Plus, programs have begun to launch that help boomer business owners pass their companies along to the next generation instead of selling them to larger companies. Looks like millennials may have a shot at owning their own businesses some day—especially in North Dakota.