America’s Small Business Succession Challenge in 250

As America approaches its 250th anniversary, discussions about economic competitiveness often focus on emerging technologies, workforce development and global competitiveness. Yet one of the most consequential economic challenges shaping the country’s future is happening much closer to home: the transfer of millions of privately owned businesses from one generation of owners to the next. How effectively those changes are managed impacts employment, local investment and community resilience in the coming decades.

A major transfer of ownership is already underway

Across the country, business owners who have spent decades building companies, creating jobs and supporting local communities are retiring. While much attention has been paid to the transfer of large wealth, a similar trend is underway: the Large Transfer of Ownership.

Family-owned manufacturers are being passed down to second-generation leaders, workers are acquiring companies through ESOPs, and small business owners are buying Main Street businesses rather than starting from scratch.

Unlike financial assets, privately held businesses cannot simply be inherited or transferred by pen. They depend on leadership, relationships, continuity and access to funds. For many owners, the business is not just what they built; it’s how they’ve lived for decades. Planning for change can easily be pushed back between the day-to-day demands of running a company. But if those conversations happen too late, owners lose flexibility and changes are often driven by circumstance rather than choice.

What makes this moment so important is the scale. Small businesses are building 99.9 percent of all companies in the US and employ almost half of the workforce. These businesses, from family manufacturers and retailers to professional companies, construction firms and healthcare providers, are essential to economic mobility, strong communities and long-term growth.

The next generation of owners

Meeting this time requires more than succession planning—it depends on finding successors. The next generation of entrepreneurs has an important role to play in sustaining existing businesses, not just creating new ones.

For many budding entrepreneurs, finding a solid business offers a compelling opportunity. Unlike starting at the beginning and spending years searching for product market fit or building a customer base, buyers enter organizations with experienced staff, operating systems, trusted brands and established customer relationships. The opportunity is not just to preserve these businesses—to modernize them, grow them and position them for the future.

Supporting this change will take a change in mindset. Entrepreneurship should not be seen as creation, but also as continuity. There is a call to build on what has been established to continue the entrepreneurial spirit that has helped America’s businesses grow and strengthen communities for the past 250 years.

Success is more than choosing a successor

Successful changes almost never happen by accident. They require early planning, clear goals and focus from both the business and the owner. Oftentimes, owners focus more on who will take over than what they want the transition to accomplish. Whether the goal is to keep the business in the family, reward employees or increase value through sales, each approach requires a thoughtful and deliberate approach.

Businesses are like families—no two are alike. For others, the right answer may pass ownership to the next generation. For others, it could be a management buyout, employee ownership or strategic sales. The most important thing is to start early, explore options and make decisions clearly and purposefully.

Equally important is building the right advisory team. Changes often involve appraisals, financing, tax planning, estate planning and long-term wealth planning. When it’s all said and done, succession is both a business strategy and a personal financial plan—helping owners prepare for the future while positioning their companies for success.

Why the result is important

Succession planning is not just about the future. Having a long-term strategy strengthens businesses here and now. Companies that can operate independently of their founders tend to be stronger, attract stronger talent and manage greater long-term value. This is more important than ever, as nearly half (42 percent) of all small businesses in the US expect a change of ownership in the next five years, according to data from Barlow Research.

If changes are handled well, the benefits extend beyond the owner. Employees have clarity about the future. Customers maintain a loyal relationship. Families are in a better position to preserve both wealth and inheritance. Communities maintain businesses that are integrated into their local economies. These businesses include local supply chains, support community organizations and create opportunities that large employers cannot easily replace. Their progress has implications that go beyond the balance sheet. In many cases, the next chapter of growth is possible because the transition was approached with the same care and discipline that started building the business.

We look forward to the next chapter of America

The story of American entrepreneurship has been defined by one generation creating opportunity for the next. As we celebrate the nation’s 250th anniversary, this time represents a great opportunity to extend that legacy to the next generation and beyond.

The question is not just who will take over these businesses, but how we intentionally prepare the next wave of entrepreneurs to lead them forward. If America gets this transition right, it will preserve what has been built and ensure that it continues to foster growth, innovation and opportunity in all communities for the next 250 years.