Ownership Transitions: Impacts on US Firms and Their Domestic and International Networks

More than 11,200 Americans reportedly will turn 65 each day from 2024 through 2027, according to Retirement Income Institute data cited by CNBC as of 2024. This period marks the peak of the silver tsunami of baby boomer retirements, a demographic shift with direct implications for business continuity and ownership.

Boomers own roughly 2.3–2.34 million U.S. companies with employees, employing about 25 million workers, based on U.S. Census figures analyzed by Project Equity in a 2020 report. As owners exit, the customer, supplier, and capital relationships they manage are exposed to disruption if clear successors are not in place.

The Demographics of Transition

From 2024 to 2027, more than 4.1 million Americans reportedly will reach 65 each year, according to Retirement Income Institute estimates cited by CNBC in 2024. This cohort built businesses during decades of expansion, and many still lead day-to-day operations.

A 2020 report from Project Equity notes that ten thousand baby boomers are retiring every day and that millions of them own businesses that employ nearly one in six workers in the United States.

Retirement therefore removes not only labor but also institutional memory and tacit knowledge that are difficult to replace quickly.

Project Equity states in its 2020 analysis that this combination of aging owners and high employment exposure creates a structural risk for local economies. Concentrated exits could reverberate through sectors ranging from precision manufacturing to neighborhood services, particularly where firms are key employers or core suppliers.

The Succession Planning Gap

A 2017 Wilmington Trust survey found that nearly 60 percent of business owners have no transition plan, according to Wilmington Trust. Separate reporting by USA Today in 2018 placed the share for small-business owners at 58 percent, underscoring a systemic shortfall in preparedness.

Project Equity reports that many owners expect to sell or pass on their businesses but have not developed formal succession plans or documented processes. The same analysis notes that only a minority of family-owned firms transfer successfully to the next generation, and that many owners instead close or sell when retirement approaches.

When planning is incomplete, even financially viable firms can face abrupt decisions driven by health events, personal circumstances, or shifting markets. In such cases, the absence of identified successors can push owners toward closures or opportunistic sales that do not prioritize local employment or long-term relationships.

Institutional Churn Inside U.S. Markets

When founders or long-tenured leaders depart without structured hand-offs, client lists, regulatory know-how, and informal supply-chain agreements can dissipate. Lost coordination can raise bankruptcy risks and reduce bargaining power for remaining regional employers.

A 2024 overview from the Olin Business School describes the silver tsunami as a wave of business ownership transitions with economy-wide effects. Its research highlights how ownership changes can alter job quality, firm survival, and the retention of local capital, depending on how transitions are structured.

Many of the firms owned by boomers participate in regional or national supply chains, so the loss of experienced relationship managers can affect contract stability and delivery reliability.

Institutional churn in this context refers to the reordering of roles and relationships across markets when long-serving owners step back and new decision-makers enter.

Dimensions of Ownership Change

Some boomer-led firms have built key supplier and customer relationships over decades. These ties often rest on personal trust rather than detailed contracts, which makes them vulnerable when founders step back or when ownership passes to buyers with limited knowledge of local conditions.

Without structured hand-offs, successor owners can lose key relationships if terms, expectations, and histories are not documented. That erosion can weaken a firm's competitive position, limit access to favorable trade credit, or reduce its role in collaborative projects with other firms.

Olin Business School research on the silver tsunami notes that transitions can involve family transfers, sales to employees, acquisitions by competitors, or purchases by financial buyers. Each path allocates control, cash flows, and decision rights differently, which in turn shapes how existing relationships are maintained or reconfigured.

Domestic Consequences

A factory that shuts after an unplanned exit cuts local payrolls and disrupts feeder suppliers; similar closures can sever long-standing partnerships in services and logistics. The dual impact on workers and vendors illustrates how retirement-driven churn can propagate through local economies.

Project Equity documents cases in which profitable small and mid-sized firms close because owners cannot find buyers that meet their price, timing, or legacy goals. In other instances, out-of-area buyers acquire firms and later consolidate operations, shifting jobs and decision centers away from the communities where the businesses were built.

These outcomes influence more than immediate employment levels. They can alter wage dynamics, municipal tax bases, and the availability of specialized suppliers that anchor regional manufacturing or service clusters, especially when multiple ownership transitions occur in the same area over a short period.

Strategic Responses

Structured succession plans typically combine early valuation, phased management hand-offs, and explicit knowledge-transfer checklists. These plans help identify future leaders, clarify roles, and record operational details that might otherwise remain informal or reside with a single owner.

Employee-stock-ownership trusts and other employee-ownership models preserve workforce expertise by aligning control with those who work in the firm. Project Equity presents examples in which such transitions keep businesses open in their communities while providing liquidity for retiring owners.

Research from Olin Business School examines how different transition structures affect firm outcomes, including bankruptcy rates and job quality.

Responsibly managed private-equity buyers can inject capital for modernization when local capital is scarce, but debt loads and cost-cutting targets can also reshape employment and supplier relationships.

What Happens Next

Retirements are expected to remain elevated through the decade, although the cited Retirement Income Institute projections provide specific figures only through 2027. Firms that document processes, groom managers early, and select buyers committed to relationship continuity are more likely to keep jobs, maintain supplier reliability, and sustain revenue.

The scale of the silver tsunami suggests that ownership transition is a national economic policy issue rather than only a private scheduling matter. Outcomes could shape wage growth, regional manufacturing capacity, and the role of U.S. firms in global supply chains that depend on predictable partners.

As baby boomer owners retire, the degree of institutional churn will depend on whether successors are prepared to manage not just assets and staff but also dense networks of relationships.

The choices made in the coming years about succession planning, employee ownership, and acquisition structures will influence how much of today's relationship capital is preserved for the next generation.

Sources

• Retirement Income Institute at the Alliance for Lifetime Income. "Baby boomers hit "peak 65" in 2024." CNBC, 2024.
• Project Equity. "The Case for Employee Ownership." Project Equity, 2020.
• Wilmington Trust. "New Research from Wilmington Trust Finds Nearly 60 Percent of Business Owners Lack a Transition Plan." Wilmington Trust, 2017.
• USA Today. "Most small business owners lack succession plan." USA Today, 2018.
• Olin Business School. "The Silver Tsunami." Washington University in St. Louis, 2024.