"By 2035, roughly six million small and medium-size businesses (SMBs) will face ownership transitions, representing up to $5 trillion in enterprise value, according to a new report by the McKinsey Institute for Economic Mobility. This 'Great Ownership Transfer' poses a critical structural test for the U.S. economy. Small businesses account for 99% of all U.S. companies and employ nearly half of the nation's workforce."
"Today, an alarming 92% of small business market exits occur through closure, while only 5% are completed as sales and 3% are transferred to new owners. This is set to become a bigger and bigger issue because of the massive wave of boomer retirements that is under way."
"The root of the problem lies in a mismatched support system. Buying and selling a small business is often harder than starting one because the systems that support entrepreneurship in the startup phase do not adequately support the transition and transfer of established businesses."
The United States faces a critical economic transition as baby boomer business owners retire. By 2035, approximately six million small and medium-size businesses will undergo ownership changes, representing up to $5 trillion in enterprise value. Small businesses comprise 99% of U.S. companies and employ nearly half the workforce, making this transition economically significant. Currently, 92% of small business exits occur through closure, while only 5% are completed as sales and 3% transfer to new owners. This demographic shift coincides with the broader wealth transfer to Gen X and millennials, with estimates suggesting $1.4 trillion annually transfers to Gen X over the next decade. Without systemic changes, this Great Ownership Transfer could cause widespread economic erosion rather than renewal.
#small-business-ownership-transition #baby-boomer-retirement #wealth-transfer #economic-impact #business-succession-planning
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