Sell, close, or continue? The transfer of US businesses is at a crossroads

The McKinsey Podcast explores the 'great ownership transfer'—a massive wave of small and medium-sized business transitions as baby boomers retire. With an estimated 6 million businesses set to change hands over the next decade, representing up to $5 trillion in enterprise value, the episode highlights the urgent need for systemic infrastructure to support smooth ownership transitions. Without intervention, viable businesses risk closure, leading to job losses, reduced tax revenue, and widened economic inequality. The report emphasizes that current barriers—especially in financing and access to capital—disproportionately affect underrepresented communities and rural areas, where the economic impact per business is highest. Experts Ken Yearwood and Shelley Stewart III stress the importance of early succession planning, improved financial tools like seller financing and community capital, and the creation of marketplaces to connect buyers and sellers. They advocate for a coordinated ecosystem involving educational institutions, financial services, and policymakers to expand participation and ensure that economic mobility and community resilience are preserved. Key takeaways include: 1) Start succession planning years in advance and ensure financial health before selling; 2) Leverage creative financing models like seller financing, search funds, and community capital; 3) Expand access to buyers through targeted outreach to underrepresented groups and rural communities; 4) Build infrastructure for the 'missing middle'—deals under $25 million that are too small for private equity but vital for economic continuity; 5) Encourage educational institutions to promote business ownership as a path to wealth, not just employment. The episode concludes with a call to action for stakeholders across sectors to treat this transition as a national economic priority.