America’s small businesses may soon face a serious problem that could impact millions of people

Major corporations have succession plans in place long before founders or CEOs step down, and that is how they have been surviving for decades. Small businesses are the lifeblood of the American economy, because not only do they help keep the GDP high just as much as the big corporations, but they’re also responsible for creating millions of jobs. However, the average age of small business owners in the country is rising, and a substantial proportion of them do not have a succession plan when they step down. This leaves their enterprises with an uncertain future.

As per a report in Fox News, almost half of such business owners are 55 or older, yet just 54% have a succession plan in place. What this means is that after they retire, there is no clear plan as to who will take the business forward. This puts a lot of such businesses at risk, which in turn creates uncertainty for employees and customers who have relied on them for years.

Small businesses employ more than 62 million Americans and account for roughly 43% of U.S. GDP. Such businesses are regional in nature for the most part. They might not have as big a customer base as big corporations, but they do a lot more to take care of their customers. Not having a succession plan in place may lead to these customers facing difficulties accessing the services that they have been getting for many years.

If a solid transition plan is not put in place, communities across the country could feel its effects, as per American Operator founder William Fry. "They’re huge creators of wealth, and in my opinion, they’re the most pure version of the American Dream — you come to this country, and you can build a better life for yourself," he said. Making succession plans isn’t easy since owners have a deep personal connection to the business they have built over their lifetime.

Selling their business is an option for such owners when it is time for them to take a step back and enjoy the rest of their lives, but the decision is never an easy one. That is what the husband-and-wife team Erik and Kassie Hansen realized recently. They’re the owners of the Wyoming-based painting company Greenway Painting. By 2024, 90% of the company’s revenue came from commercial clients, and 85% came from repeat customers.

Those statistics prove the loyalty that local customers have towards small businesses in their area. "All of our clients are very important," Erik said, before adding, "Especially in a small town, they are like friends or family when you work with them for years and years. You want to make sure they get well taken care of. That's important."

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