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

According to a recent report from the McKinsey Institute for Economic Mobility, trillions of dollars in assets are at stake as a wave of small business owners in the US retire. The risks are massive, right? First, there's the potential for just viable businesses to close, right? These are perfectly healthy businesses. These businesses drive tax revenue, they drive jobs, they are the underpinning of communities across the country.

That's McKinsey partner Ken Yearwood, a co-author of the report. He joins me and McKinsey senior partner Shelly Stewart III, another co-author, to talk about specific pathways for keeping these businesses open and what's really at stake in this great ownership transfer. This is the McKinsey Podcast, where we help you make sense out of the world's toughest business challenges. I'm Roberta Fassaro, your host for today. First up, here's Shelly to set the context.

So we're here today to talk about something that we're calling the great ownership transfer. Can you describe what exactly this great ownership transfer is and why is this moment so different from past waves of business succession? Absolutely. Over the next decade, we expect that six million small businesses are expected to transition ownership as baby boomers retire. And we estimate that around 1 million of those businesses are viable candidates for sale.

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