Boomer Business Handover Gets Zestimate Equivalent
· outdoors
The Unlisted Economy: A New Era for Small Business Valuations?
The great boomer business handover has finally gotten its own Zestimate equivalent. Baton, a marketplace built by a former Zillow executive, has launched Business Profiles, a public valuation platform that promises to revolutionize the way small businesses are bought and sold.
Business Profiles lists two million small businesses across the country, with estimated revenue, team size, customer satisfaction, and comparable sales data folded into public valuations and local competitive stack ranks. This is particularly significant for owners who have never considered selling or have no idea what their business is worth. As Baton’s CEO Chat Joglekar noted in an interview, awareness is the biggest competition when it comes to selling small businesses. By making these valuations public, Baton is essentially saying that a previously unknown value exists.
The stakes behind this framing are enormous. With 41% of the country’s small businesses owned by baby boomers, employing over 25 million people and holding an estimated $10 trillion in assets, the need for a transparent and accessible valuation platform is pressing. McKinsey projects that up to six million small-business transitions will occur by 2035, representing up to $5 trillion in enterprise value. The firm’s data also reveals that fewer than one in three owners has an exit plan, and fewer than one in ten can name their company’s value within 10% of its actual worth.
Baton’s approach is built on the idea that a rough number beats no number. By leveraging inputs like PPP loan data and public records, the company’s valuations may not be as accurate as traditional appraisals but are better than nothing. As Joglekar put it, “If every small business in America understood their valuation, I believe the U.S. would be a better place.” This is a tantalizing prospect, especially when considering that millions of small businesses operate without any clear plan for what happens next.
However, there’s also a risk that Business Profiles will become just another iteration of online marketplaces and valuations tools. Will Baton’s data-driven approach hold up under scrutiny? Or will the company end up relitigating the same accuracy debate that Zillow has fought for years? Time will tell.
The launch of Business Profiles raises questions about the nature of ownership and entrepreneurship in America. As Joglekar pointed out, “The competition is kind of the 92% of people that just shut their business down.” What does this say about our cultural values and priorities? Are we willing to acknowledge the value of small businesses and support owners as they navigate the complexities of succession planning?
Ultimately, Business Profiles represents a new era for small business valuations. While it’s too early to tell whether Baton will succeed in its mission, one thing is certain: the stakes are high, and the consequences of failure could be far-reaching.
Reader Views
- TTThe Trail Desk · editorial
The Baton platform's rough valuations may be a necessary evil for the unlisted economy, but they also create a new kind of risk: over-valuation. By making estimated worth transparent and comparable to similar businesses, small owners may become complacent about their numbers, failing to address underlying financial issues that could tank their valuation. A more nuanced approach would pair public valuations with education on how to improve or challenge them – after all, what happens when the "zestimate" for a business is wildly inflated?
- JHJess H. · thru-hiker
While Baton's Business Profiles may provide a rough estimate of small business value, its reliance on public records and PPP loan data raises red flags about accuracy and bias. For example, businesses in affluent areas or those that received larger PPP loans will likely have inflated valuations, skewing the market perception of their worth. Moreover, how will Baton account for intangible assets like brand reputation, intellectual property, and social impact? A more nuanced approach to valuation is needed to avoid perpetuating flawed assumptions about small business value.
- MTMarko T. · expedition guide
The elephant in the room here is that valuations like these are only as good as their inputs. PPP loan data and public records might give you a rough idea of a business's worth, but what about intangibles? Employee loyalty, proprietary technology, and market trends all play a significant role in a company's true value. Baton's approach may be better than nothing, but it's still a blunt instrument. I'd love to see more nuance in their methodology – after all, small business owners are putting their livelihoods on the line when they sell.