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Cornelius Today
By the People, for the People
Retiring Small Business Owners Struggle to Find Successors
New research shows 92% of small businesses may close when owners retire, but structured ownership transitions could preserve millions of jobs.
Published on Mar. 2, 2026
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A new report from the McKinsey Institute for Economic Mobility reveals that over the next decade, roughly six million small business owners in the United States will reach retirement age. One million of those own viable businesses that could be sold, representing up to $5 trillion in enterprise value. However, current trends suggest that as many as 92% of these small businesses will close rather than be sold, as they are too small to attract institutional buyers but too complex for informal handoffs. Broadening the pool of potential buyers through structured ownership transition models like employee stock ownership plans (ESOPs) and seller-financed buyouts could help preserve millions of jobs.
Why it matters
Small businesses are the backbone of the U.S. economy, employing nearly half the country's workforce. The impending wave of small business owner retirements threatens to shutter many viable firms and cost millions of jobs, unless new ownership models emerge to facilitate smoother transitions.
The details
The report found that over the next decade, roughly six million small business owners in the U.S. will reach retirement age, with one million of those owning viable businesses that could be sold. However, current trends suggest that as many as 92% of these small businesses will close rather than be sold, as they are too small to attract institutional buyers but too complex for informal handoffs. Structured ownership transition models like ESOPs and seller-financed buyouts can help broaden the pool of potential buyers and preserve these businesses.
- Over the next decade, roughly six million small business owners in the U.S. will reach retirement age.
The players
McKinsey Institute for Economic Mobility
A research organization that produced a new report on the impending wave of small business owner retirements.
Grace Dinsdale
The owner of Blooming Nursery, a wholesale plant business in Cornelius, Oregon, who sold her company to her employees through an ESOP.
What’s next
The report suggests that structured ownership transition models like ESOPs and seller-financed buyouts can help broaden the pool of potential buyers and preserve these small businesses.
The takeaway
As millions of small business owners approach retirement, finding viable successors is crucial to preserving these firms and the millions of jobs they provide. Innovative ownership models that lower barriers to entry can help ensure these small businesses survive the coming wave of retirements.
