America is facing a small business succession challenge. Millions of business owners are approaching retirement age, yet most have no formal succession plan in place. At the same time, a growing number of entrepreneurs are choosing to buy existing businesses rather than start their own.

According to the 2026 State of Main Street report from Contrarian Thinking, nearly one-third of business owners expect to transition ownership within the next five years, while 70% lack a formal succession plan. The result is a massive transfer of opportunity and a new generation of business buyers stepping in to fill the gap.

The Silver Tsunami Is No Longer Coming

For years, experts have warned about the "Silver Tsunami,” the wave of aging business owners expected to retire. But according to entrepreneur and investor Codie Sanchez , that transition is already underway.

"We have a five to seven to maybe ten-year window to get these companies transferred," Sanchez said. "If they don't, they just go away."

Retirement is only part of the story. Events such as distress, disease, divorce, and disagreement often trigger a business sale. After years of building and operating a company, many owners are simply ready for their next chapter.

The concern is that many of these businesses are unprepared for transition, creating risk for employees, communities and owners themselves.

Why More Entrepreneurs Are Choosing to Buy

At the same time, acquisition entrepreneurship is gaining momentum.

Rather than spending years building a company from scratch, buyers are purchasing established businesses with customers, employees, systems and cash flow already in place.

"If what you're trying to do is live a nice life, enjoy your time with your family, make a nice income, and have an asset that you can sell at the end as opposed to a job you can't, it's going to be more important that you buy a business than start one," Sanchez said.

Much of the demand is coming from what Sanchez calls "corporate escapees,” professionals concerned about layoffs, economic uncertainty and the long-term impact of artificial intelligence on white-collar jobs.

Women are increasingly joining the movement as well. Sanchez noted that women represented roughly 30% of her community several years ago. Today, participation is approaching 40%. Couples are also becoming active buyers, often with one spouse maintaining employment while the other takes over the business.

How Buyers Are Funding These Acquisitions

One of the biggest misconceptions about buying a business is that buyers need significant personal wealth.

According to Sanchez, capital is often not the primary obstacle.

"The capital is not the hardest part," she said. "The hardest part is knowing what a good deal looks like."

Many acquisitions are funded through a combination of buyer equity, SBA financing and seller financing. Seller financing allows the owner to receive a portion of the purchase price over time, reducing the buyer's upfront cash requirements while helping align incentives after closing.

Sanchez believes first-time buyers should focus less on how much money they currently have and more on understanding deal structure, financing options and working capital requirements. She also encourages buyers to work with professionals who understand acquisition lending and can help them evaluate financing alternatives.

The Real Challenge: Businesses That Aren't Ready to Sell

Despite growing buyer demand, Sanchez believes the bigger problem is on the seller side.

"Most business owners think because they've put in 10 or 20 years, they should get 10 or 20 years’ worth of valuation at the end," she said.

Many businesses remain heavily dependent on their founders, with key customer relationships, operational knowledge and decision-making concentrated in one person. Others lack consistent financial reporting, strategic planning or documented systems.

The result is that owners often discover their business is worth far less than expected.

According to Sanchez, improving financial visibility, reducing owner dependence and strengthening operations can dramatically improve transferability. In many cases, she says, business value can increase substantially without any meaningful increase in revenue.

America's succession crisis is creating a rare moment in the small business economy. Millions of owners are preparing to exit, while a growing number of entrepreneurs are choosing acquisition over startup creation.

The opportunity is significant for buyers. But for sellers, the lesson is equally important: buyers may be ready, but that does not mean every business is ready to be bought.

The small business owners that achieve the strongest outcomes in the coming wave of ownership transfers will be the ones whose owners begin preparing long before they are ready to leave.

Melissa Houston, CPA, CEPA , is a Business Value & Financial Strategy Advisor and a Forbes.com contributor who writes about building profitable, sellable businesses.

With more than 25 years of experience in finance and accounting, she helps entrepreneurs increase profit, improve cash flow, and build companies that create long-term wealth. Her work focuses on financial leadership, profit optimization, and increasing business valuation through strategic decision-making.

Melissa is a Certified Exit Planning Advisor (CEPA), specializing in helping founders understand and close the gap between their current business value and its full potential. She works with business owners to strengthen financial performance, reduce risk, and position their companies for successful exits.

A published author of Cash Confident: An Entrepreneur’s Guide to Creating a Profitable Business , Melissa is a recognized voice in financial strategy and entrepreneurial wealth-building.

The opinions expressed in this article are not intended to replace professional accounting or tax advice.