In recent years, a surprising development has emerged: Generation Z, our youngest working demographic, is increasingly turning to trades as a career path. What may have originally seemed like a TikTok trend (the hashtag #bluecollar drew 500k posts in the first four months of 2024, up 64% over the same period in 2023, with similarly high increases seen for hashtags like #electrician, #constructionworker and #mechanic) has driven real-world impact. For some it is a “side hustle” (second job or side project), but the number of students enrolled in vocational-focused community colleges rose 16% last year – its highest level since the National Student Clearinghouse began tracking enrollments in 2018 – with many only discovering the high wages and good lifestyle provided by these jobs through the real-world practice of them on social media.
This influx of interest should be seen as good news for trade business owners, especially those who are contemplating their exit strategy. Let’s explore why this trend is such good news for those looking to sell their businesses.
Increased Business Valuation
The growing interest in trades is likely to boost the valuation of your business. It’s evidence of future growth potential. Remember, buyers are not just purchasing your current revenue stream; they’re investing in future potential. A key concern for any business buyer is the availability of skilled workers. Hiring in the trades has, in the past, sometimes been challenging; now, with more young people eagerly entering the field, the outlook for long-term growth in trades is strong, making your business more attractive.
Additionally, Gen Z brings tech-savviness and fresh perspectives. They are likely to be interested in ways to use new technology and may have innovative approaches to marketing, advertising and customer service. Buyers may see opportunities to modernize and grow the business by implementing technologies your Gen Z workforce enthusiastically embraces, increasing its value.
A Larger Pool of Potential Buyers
Yes, the influx of Gen Z into trades is expanding the pool of potential buyers for your business. These young tradespeople aren’t just looking for jobs; many aspire to business ownership. They bring fresh energy, innovative ideas, and a long-term perspective to the industry. As they gain experience and accumulate capital, they could become ideal candidates to take over established businesses.
This increased demand can work in your favor when it’s time to sell. More potential buyers mean more competition, which can drive up the price of your business and give you more options to find the right successor.
Long-Term Sustainability and Growth of Trades
Perhaps the most significant implication of Gen Z’s interest in trades is what it says about the industry’s future as a whole. It signals a shift in perception. The trades are increasingly seen as viable, rewarding career paths.
This trend is important for fulfilling sustained demand. As infrastructure ages and new technologies emerge, the demand for skilled tradespeople is likely to grow, ensuring a steady stream of business. The industry is also benefiting from an image overhaul. As more young people enter trades and showcase their personalities that are outside of any stereotypes people may have formed about blue-collar workers, the public perception of these careers is likely to improve, potentially attracting more customers and investment.
Implications for Selling Your Business
Given these trends, if you’re considering selling your trade business, now might be an opportune time. Here are some steps to consider:
- Highlight Growth Potential: When valuing your business, emphasize the growth and expansion opportunities that will result from these demographic trends.
- Invest in Training: Consider establishing or expanding training and mentoring programs. A business with a strong pipeline of enthusiastic and skilled workers will be more attractive to buyers.
- Embrace Technology: Start integrating modern technology into your operations. This can appeal to tech-savvy Gen Z buyers and increase your business’s value.
- Network with Young Tradespeople: Build relationships with the next generation in your industry. They may know someone interested in acquiring a business like yours or may even be your future buyers or someone you can merge with.
The growing interest of Gen Z in trades is proving to be much more than a TikTok trend. It’s very much a signal of a bright future for these industries. For trade business owners looking to sell, this shift presents a unique opportunity that potentially increases your business’s value and underscores the long-term sustainability of your industry. As you prepare your exit strategy, keep these trends in mind. The next generation of tradespeople isn’t just the future of the industry – they might also be the key to maximizing the value of your life’s work.
Want to learn more about trends affecting the trades or interested in sharing stories from your own trade business? Align now sponsors the “Blue Collars Making Green” podcast (listen on Spotify or Apple Music, iHeart, or audible/Amazon Music). If you’re the owner of a trade business and would like to tell your story and talk about industry trends with us, please reach out!