Washington, D.C. – While policymakers cheer for startups and unicorn IPOs, a quieter, more urgent crisis is unfolding across America’s heartland: the retirement dilemma of aging small business owners. For millions of entrepreneurs — particularly baby boomers who collectively operate over 2.3 million U.S. businesses — there’s no playbook for a graceful exit. Worse, the system may be rigged against them.
The hope for many was to sell their businesses to fund retirement. But today, only 20% of small businesses are even sale-ready in normal conditions, according to the Exit Planning Institute. Add inflation, volatile interest rates, and supply chain chaos to the mix, and buyers are vanishing. Valuations are plummeting. The secondary market is flooded with sellers — and the buyers aren’t showing up.
These aren’t failed ventures. Many are community anchors — family-owned shops, service providers, and suppliers embedded in regional economies. Yet their owners are increasingly trapped in what economists call “benign entrapment”: emotionally invested, aging out, but with no viable exit route. Some double down, working longer hours and investing more capital in a last-ditch attempt to remain afloat.
This systemic breakdown is fueled by policy blind spots. Small business programs focus on launch and growth, not closure or succession. “A 68-year-old carpenter has nothing in common with a 28-year-old tech founder,” notes one researcher, yet they’re treated as one group under current frameworks.
Further compounding the problem is America’s volatile economic environment. Fluctuating estate tax thresholds, inconsistent tariffs, and unstable capital gains policies undermine long-term planning. At the local level, budget cuts to anchor institutions like hospitals or universities hit small business vendors first, often triggering closures that ripple through entire communities.
So what’s the solution? Experts recommend a radical rethink:
- Policy by stage and age: Retirement-ready businesses should be valued for stability and community impact, not just growth metrics.
- Exit-focused infrastructure: Peer forums, succession accelerators, and acquisition financing could help prepare aging founders years before retirement.
- Economic predictability: A consistent tax and regulatory environment would stabilize valuations and restore confidence.
- Downstream impact budgeting: Policymakers must assess how cuts to large institutions affect the small business ecosystems around them.
This isn’t merely an economic story — it’s a human one. The erosion of entrepreneurial retirement threatens dignity, livelihoods, and the fabric of small-town America. Until the U.S. acknowledges that entrepreneurship must be supported from start to finish, the nation risks losing not only jobs and tax revenue, but also a legacy of local resilience.
