The Silver Tsunami: what the data says, and why the moment is now
A generation of owners is reaching retirement at the same time. The age data is certain; the flood of sales is not, because most owner exits end in a closure. The numbers in one place, from the primary sources, with what they mean for an owner thinking about the next ten years.
Yevhen BorovoiFounderThe short answer. The Silver Tsunami is the name for a generation of business owners reaching retirement at the same time. In the United States, owners aged 55 and over run more than half of all businesses with employees, and most of them have no formal plan for what happens next. The demographic part is certain. The part about a flood of sales is not: most owner exits end in a closure, not a sale. That gap, between the owners who will leave and the businesses that are ready to be bought, is where the real story is.
This note puts the numbers in one place, from the primary sources, and says plainly where they disagree. It is written for owners who are starting to think about what comes after them, and for the buyers and advisors who meet them.
What the Silver Tsunami is
The phrase describes an age wave. The generation born after the Second World War built a large share of the companies that exist today, and it is now reaching the age when people step back. In business it has come to mean one thing in particular: a very large number of owner-run companies that will change hands, close or pass to someone else over the next ten years.
The age data is solid. In the latest Federal Reserve survey of employer firms, 29 percent have a primary owner aged 55 to 64 and 24 percent are run by someone aged 65 or over. The Census Bureau's own count of owners points the same way: 51 percent of the owners of employer businesses were 55 or older in its survey.
Age of the primary owner, US employer firms
The pressure behind it is steady rather than sudden. According to LIMRA, more than 4.1 million Americans turn 65 every year through 2027. Not all of them own a business, and many owners keep working well past 65. But every year another group of founders reaches the point where the question is no longer whether to plan an exit, but when.
The numbers behind the headlines
Two large estimates are quoted most often, and they do not agree.
The McKinsey Institute for Economic Mobility, The Great Ownership Transfer counts about six million small and mid-sized businesses facing an ownership change by 2035, with up to five trillion dollars of enterprise value. It also notes that nearly 80 percent of the projected exits are businesses valued under two million dollars.
The Exit Planning Institute, 2025 State of Owner Readiness says that 75 percent of owners intend to transition within ten years, which it translates into about 4.5 million businesses and fourteen trillion dollars by 2033.
The difference comes from method. One models the value of businesses likely to change hands; the other scales up what owners say they intend to do. Neither is wrong, and neither is a forecast of sales. They describe the size of the question, not the number of deals.
What actually happens when owners leave
This is the number that changes the conversation. In McKinsey's analysis, 92 percent of small business exits end in closure. Five percent end in a sale and three percent in a transfer to family, employees or someone else.
How small business exits end
Most of those closures are very small businesses that were never going to be sold. But not all of them. Some are good companies with loyal customers and a real place in their market that simply were not ready when the owner was. They had no one who could run them without the founder, no records a buyer or a lender could trust, or nothing a buyer could take over cleanly. Those businesses do not fail. They just end.
The other exits are small, too. Employee ownership is growing but remains a narrow path: the National Center for Employee Ownership counts 6,609 employee stock ownership plans at 6,411 companies, with about three hundred new ones a year.
A wave, or a slow tide?
If you expected the market to be flooded with businesses for sale, the data so far is calm. BizBuySell, the largest marketplace for small businesses, recorded 9,586 closed sales in 2025, almost the same as the year before, at a median price of 350,000 dollars (BizBuySell, 2025 year in review). In the third quarter of 2026 it counted 2,132 sales, seven percent fewer than a year earlier, and both buyer and seller confidence sat just below 50 on its index (BizBuySell Insight Report, Q3 2026).
Baby boomers are also a smaller share of sellers than they were. On the same marketplace their share fell from 41 percent of sellers in 2020 to 29 percent in 2024. Owners are working longer, and younger owners now account for most of the market.
Baby boomers among sellers on the largest marketplace
So anyone who says the wave has broken is overstating it. But the motive is unmistakable. In the latest survey of brokers and M&A advisors, retirement was the leading reason to sell in every deal size: 45 percent of sellers under 500,000 dollars and 72 percent of sellers between one and two million.
Retirement as the reason to sell, by deal size
The same survey points to the real weakness. Between 60 and 90 percent of sellers, depending on deal size, had less than a year of exit planning, or none at all. The tide is coming in slowly, and most owners are walking into it unprepared.
Why the moment is now
A slow tide still has a right time. Several things line up in 2026 that make the next two or three years matter more than the averages suggest.
There is money looking for good businesses
The US Small Business Administration delivered a record 44.8 billion dollars in its two main loan programs in fiscal 2025: 37 billion in 7(a) loans and 7.8 billion in 504 loans. Search funds, where an investor-backed entrepreneur looks for one company to buy and run, have passed 850 since 1996, with a median purchase price of 16 million dollars in recent years, according to Stanford Graduate School of Business. In the larger deals, between five and fifty million dollars, multiples reached 5.8 times earnings in the second quarter of 2026, the highest since early 2022, and 87 percent of deals over five million dollars drew three or more offers.
Buyers are pickier at the small end
Below a million dollars the picture is different. Deals there often draw one or two offers, and buyers, as the IBBA's chair put it, are more sensitive to financing, margins and operating risk. A lender finances an acquisition on the numbers a business has already produced. A business that depends on its owner, keeps its records loosely or cannot show what it owns is harder to finance, and therefore harder to sell, whatever its quality.
Intent is high and preparation is low
Three quarters of owners intend to transition within ten years, and 58 percent of baby boomer owners plan to exit within five. Only 13 percent of owners have a formal exit plan.
Intent and preparation
Who will take the business over
The numbers miss something I hear in person, and hear more and more often: at training sessions, at conferences, on long flights and on holiday. The people who started companies in the late 1990s and early 2000s were thirty or forty then. They are sixty or seventy now, and the question they ask has changed. Their children studied in other countries and built their lives and careers there. There is no one in the family to take the business over, and often no one inside the company who could buy it. It is not a statistic when you hear it across a table. It is a real question without an obvious answer, and it is becoming common.
That is why the next few years matter. The owners who start preparing now have time to make the business transferable while there is still money and appetite for good companies. The ones who wait risk joining the 92 percent.
Where good businesses lose value
Most of what decides a sale is financial and operational: earnings, customers, the team, how much depends on the owner. There is one more layer that owners rarely think about, and that we see often.
In the companies I have worked with through PERETZ, our technology and creative partner, the problem is rarely a bad product. It is a website or a system built in the early 2000s and never properly updated, often because one of the owners was a programmer and kept it running personally. The code is old, sometimes an early version of Drupal. Links are broken, passwords are simple, pages are slow, and there are security holes any scanner finds in minutes. The design and the experience stopped where the owner stopped following them. The result is a good business wrapped in packaging that undersells it, with digital assets nobody has looked after.
A buyer reads this differently from the owner. A dated website is a cost they can price. A domain registered to a former employee, a customer list that lives on one phone, an email account on a personal address or software only one person can run is a question they cannot price. Questions like these slow a deal down, add conditions or cut the price. Our note on ownership gaps in an acquisition shows how they reach the final number, and key-person risk explains why a business that runs through one person is read as a risk. The guide to digital assets a buyer will ask about lists each of them and the order to fix them in.
What an owner can do in the next twelve months
None of this needs a decision to sell. It is the same work that makes a business easier to run.
- Write down what depends on you. Customers who only call you, prices that live in your head, suppliers who deal only with you. Start moving each one to someone else or into a system.
- Put the records in order. Financial statements a lender can trust, contracts in one place, licenses and permits current. Your CPA and attorney lead this part.
- List every digital asset and who holds it. Domains, website and hosting, email, phone numbers, Google Business Profile and reviews, social and ad accounts, payment and accounting systems. Move each one into the company's name.
- Look at the systems through a stranger's eyes. Could someone new run the accounting, the scheduling or the customer records without you? Can the data be exported? Is there a backup that has actually been restored?
- Fix what a buyer sees first. Broken links, an insecure website and simple passwords are cheap to fix and expensive to leave.
- Decide who helps with the sale. A broker, an M&A advisor or a direct buyer each fit different businesses. Choose before someone else chooses for you.
Our sale preparation work covers these six areas for owners of any business, one to three years before a sale. Owners of technology companies can start with a strategic options review or exit readiness. Technology deadlines that can surprise a buyer are on our page of notes for owners.
How we read these numbers
We use primary sources wherever they exist and say when a figure comes from a survey or a marketplace. Three cautions apply.
- Firms and owners are different counts. The Federal Reserve counts firms by their primary owner; the Census Bureau counts individual owners. Both show that more than half are 55 or older, but the percentages are not interchangeable.
- Marketplace data is reported voluntarily. BizBuySell and the IBBA survey reflect the deals brokers report, which leaves out many private and family transfers.
- Large estimates measure the question, not the deals. The five and fourteen trillion dollar figures describe the value of businesses facing a change of owner, not sales that will happen.
We do not value businesses, and nothing here is tax, legal or investment advice. For a number, talk to a qualified appraiser or your advisor; for tax and estate questions, your CPA and attorney.
Sources
- Federal Reserve Small Business Credit Survey, 2026 Report on Employer Firms, published 2026.
- US Census Bureau, Annual Business Survey, owners of employer businesses by age.
- McKinsey Institute for Economic Mobility, The Great Ownership Transfer, February 2026, and the summary reported by Fortune.
- Exit Planning Institute, 2025 State of Owner Readiness.
- BizBuySell, 2025 year in review and BizBuySell Insight Report, Q3 2026.
- IBBA and M&A Source Market Pulse, Q2 2026.
- US Small Business Administration, fiscal 2025 lending.
Questions
What is the Silver Tsunami?
It is the name for a generation of business owners reaching retirement at the same time. In the United States, owners aged 55 and over run more than half of all businesses with employees, and most of them have no formal plan for what happens to the business when they step back.
How many businesses will change hands?
Estimates differ by method. McKinsey counts about six million small and mid-sized businesses facing an ownership change by 2035; the Exit Planning Institute scales owners' stated intentions to about 4.5 million by 2033. Both describe the size of the question, not the number of sales that will happen.
Is the market being flooded with businesses for sale?
Not so far. BizBuySell recorded 9,586 closed sales in 2025, almost the same as the year before, and fewer in the third quarter of 2026 than a year earlier. Retirement is the leading reason owners sell, but most exits still end in a closure rather than a sale.
Why do good businesses sell for less than they are worth?
Usually because a buyer cannot check what it is buying: the business depends on the owner, the records are loose, or key assets such as the domain, customer data or software sit with one person. Each question a buyer cannot price slows the deal, adds conditions or lowers the price.
When should an owner start preparing for a sale?
One to three years before. That leaves time to move what depends on the owner, put the records in order and bring every asset into the company's name while there is still money and appetite for good businesses.
Founder of PERETZ, DeZZign, The Structure and NEX, partner at SCHOEFFEL. An engineer by training who reads a business as one system: strategy, product, technology, processes and economics.