Six million small businesses may change hands as owners retire by 2035

If you own a small business, or work for one, a big handoff is coming. Rep. Roger Williams, who chairs the House Committee on Small Business, says about six million small businesses are expected to change ownership by 2035 as their aging owners retire. He calls it the "silver tsunami." Without a plan, he warns, many will simply close.

What is happening

The warning comes from an op-ed by Williams, so it reflects his view as a lawmaker. His point is simple. When an owner retires with no successor, the business may shut down. That affects employees and the local economy, not just the owner.

Williams gave one local example. In Texas, nearly one in six workers are employed by businesses mainly owned by Baby Boomers heading toward retirement.

Why family handoffs fall short

Many owners assume a son or daughter will take over. Williams says that rarely happens. In his words, "Fewer than 15% of businesses are passed down within the family." That leaves most owners needing another answer, and many have not started looking for one.

A possible opening for younger buyers

There is a bright side. Williams says more than a third of Gen Z and millennial business owners want to buy a business from a retiring owner. That could pair sellers who want their work to continue with buyers who want to skip starting from scratch.

Money is the hurdle. Williams points to two bills meant to help buyers finance purchases:

• The Made in America Manufacturing Finance Act
• The Main Street Parity Act

The material does not say whether either bill will become law.

The estate tax change

The estate tax is a tax on what a person leaves behind after death. Williams says the Working Families Tax Cuts permanently raised the exemption to $15 million per individual. That means more family farms, ranches and businesses can stay in the family without heirs having to sell land or equipment to pay the IRS.

What to do

The advice is to start early. Owners can talk with family members, possible successors and financial advisors to work out the path forward. Williams described moving his own family's Chevrolet dealership to the next generation. He said that with the right planning, more Texas families can do the same.

What happens next

The 2035 figure is a projection, and the op-ed does not say how many of the six million businesses will close. The bills are still proposals. For owners, the clearest step does not depend on Washington: decide who takes over, and start the conversation now.