Sell, Close, or Continue? The Transfer of US Businesses Is at a Crossroads

Why It Matters

Ensuring a smooth ownership transition safeguards millions of jobs and local economies while unlocking unprecedented wealth creation for underrepresented entrepreneurs.

Key Takeaways

• 6 million US small businesses face ownership transfer in next decade.
• Up to $5 trillion enterprise value at risk without smooth succession.
• Financing gaps hinder diverse buyers, perpetuating racial and gender gaps.
• Early succession planning and financial health boost sale attractiveness.
• Creative capital models—seller financing, community funds, search funds—can bridge gaps.

Summary

The McKinsey podcast spotlights a looming "great ownership transfer" as baby‑boomers retire, projecting that roughly six million small and mid‑size firms will change hands over the next ten years. Of those, about one million are deemed viable sale candidates, representing up to $5 trillion in enterprise value and affecting more than 60 million workers—nearly half the U.S. workforce.

The discussion highlights three core challenges: a thin financing pipeline for deals under $25 million, a limited pool of qualified buyers, and systemic barriers that keep underrepresented entrepreneurs from accessing capital. Without intervention, the transition could exacerbate existing wealth gaps—currently 70% of owners are white and 60% male—leaving only a quarter of the value for women, Black, and Latino buyers.

Ken Yearwood and Shelley Stewart stress early succession planning, tightening financial statements, and leveraging partners such as CPAs, brokers, and community lenders. They also cite emerging financing tools—seller‑financed loans, community capital pools, search‑fund models, and blended structures—to expand the buyer base and reduce transaction friction.

If successful, the transfer could preserve over 10 million jobs, sustain hundreds of billions in local spending, and generate new household wealth, while also narrowing long‑standing equity gaps. Conversely, failure risks widespread closures, lost tax revenue, and deepened economic inequality, underscoring the urgency for a coordinated infrastructure that connects sellers, buyers, and capital providers.

Original Description

A historic wave of ownership transitions is set to reshape the backbone of the US economy. The fate of jobs, local spending, and wealth creation all hinge on whether enough qualified—and diverse—buyers can step in to continue to pave the way for small business ownership. In this episode, Shelley Stewart III, McKinsey senior partner and Roberta Fusaro, editorial director, talk about the scale and stakes of the "Great Ownership transfer". After, Ken Yearwood, McKinsey partner, joins to talk about the risks of inaction and the practical pathways to making these transitions work. 

The McKinsey Podcast: https://www.mckinsey.com/featured-insights/mckinsey-podcast

Shelley Stewart III: https://www.mckinsey.com/our-people/shelley-stewart

The Great Ownership Transfer report: https://www.mckinsey.com/institute-for-economic-mobility/our-insights/the-great-ownership-transfer-a-new-era-of-business-stewardship

McKinsey Institute for Economic Mobility: https://www.mckinsey.com/institute-for-economic-mobility/overview

Theme music composed, performed, and produced by Joy Ngiaw.

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