Retiring baby boomer business owners are facing a critical crossroads, with many failing to establish proper acquisition or succession plans for their companies. Over the next decade, these business owners must hand over approximately 12 million enterprises, representing an estimated $10 trillion in assets, to new owners.
The Looming Small Business Succession Crisis
According to a report released last month by JPMorgan Chase titled ‘Powering 10 Million Small Businesses,’ a survey of 1,000 business owners revealed that 70% are only in the initial stages of business succession planning. Meanwhile, a mere 8% stated that their plans had reached a significantly advanced stage.
Experts note that despite this widespread lack of preparation, the massive generational shift in small businesses is already underway. JPMorgan Chase projects that roughly 12 million companies will undergo ownership transitions over the next 10 years, shifting approximately $10 trillion in assets. In industries deemed critical to national security, the aging trend is even more pronounced, with over half of business owners aged 55 or older.
While some critics argue that the proportion of small businesses owned by baby boomers is excessively large, an even greater issue is that a substantial portion of these owners are approaching retirement without deciding whether to sell their businesses, pass them down to family members, or transfer them to employees.
Why Proper Planning Matters for Economic Stability
In a February report titled ‘Great Wealth Transfer,’ the McKinsey Global Institute analyzed that 6% to 13% of small business closures expected over the next decade could be prevented if owners properly established succession plans. These businesses often shut down not necessarily due to poor business performance, but because profitable owners fail to find suitable buyers or successors before retirement.
A 2025 Gallup survey highlighted similar vulnerabilities, showing that 27% of businesses owned by individuals aged 55 or older had yet to determine a long-term business strategy, or intended to close down rather than sell or transfer their operations. A concurrent small business study by U.S. Bank revealed that while many owners started their businesses to build something for future generations, a majority lacked formal transition plans. Furthermore, many found the process of determining a succession strategy overwhelmingly complex.
This succession dilemma extends beyond local shops and small manufacturers. Recent analyses of S&P 500 corporations show that in over a third of the surveyed companies, both the CEO and CFO were simultaneously approaching retirement age without publicizing clear succession plans. This demonstrates that transition challenges are permeating the entire economy, from local hardware stores to massive corporations.
Solutions and Support from Financial Institutions
Estimates regarding the scale of the issue vary by methodology. Project Equity estimates that about 2.3 million businesses owned by retiring baby boomers will face ownership transition challenges, employing roughly one-sixth of the total workforce. Other analyses suggest the number of affected companies could reach 3 million, with some projections forecasting up to 6 million ownership transitions by 2035. Regardless of the exact figure, JPMorgan Chase emphasizes that baby boomers are failing to adequately prepare the business ecosystem for the next generation’s American dream.
JPMorgan Chase argues that the Small Business Administration (SBA) must establish a nationwide business succession support network. In March, the institution launched the ‘American Dream Initiative,’ committing $80 billion in small business loans over the next decade alongside expanded advisory services for business ownership transitions. They are also deploying an $11.5 million philanthropic fund to support ownership transitions.
If baby boomer-owned businesses fail to plan for sales or ownership transfers, the likelihood of closures rises significantly. This issue extends far beyond individual retirement concerns, transforming into a massive generational shift that will determine the survival of millions of companies, jobs, local economies, and future business opportunities.
