Why the next generation of entrepreneurs may find their greatest opportunity in buying an established business

Millions of Small Businesses Are Approaching an Ownership Transition. Who Will Take Over?

Why the next generation of entrepreneurs may find new opportunities in buying an established business rather than starting one from scratch.

Imagine spending 35 years building a successful business.

You’ve developed loyal customers, hired employees, established relationships with suppliers, and created something that has become part of your community.

Now you’re ready to retire.

Your children have chosen different careers. Your employees enjoy their jobs but aren’t interested in taking ownership. You don’t want to close the doors, but you can’t keep running the company forever.

Who takes over?

This is a question facing business owners across America, and it could create a significant opportunity for the next generation of entrepreneurs.

For decades, the traditional path to entrepreneurship has been relatively straightforward: develop an idea, establish a company, find customers, and build the business from the ground up.

But what if your next business opportunity isn’t something you need to create?

What if it’s a company that already exists, with customers, employees, equipment, and an owner who is ready to hand over the keys?

A growing number of ownership transitions could make buying an established business an increasingly important path to entrepreneurship over the next decade.

At a Glance: The Opportunity Behind America’s Ownership Transition

• Approximately six million U.S. small and medium-sized businesses are projected to face ownership transitions by 2035.
• More than one million are estimated to be viable candidates for sale or employee ownership, representing up to $5 trillion in enterprise value.
• Buying an existing business may provide an established customer base, operating history, equipment, and experienced employees.
• Business acquisitions can be financed through several arrangements, including conventional lending, seller financing, and qualifying SBA-backed loans.
• Entrepreneurs must evaluate a company’s financial condition, liabilities, and future operating requirements before completing a purchase.

These ownership-transition estimates come from McKinsey’s February 2026 report, The Great Ownership Transfer: A New Era of Business Stewardship. They represent projected transitions over the coming decade, not businesses currently listed for sale.

The Great Ownership Transfer: Why Millions of Businesses Are Approaching a Turning Point

America’s small-business economy is approaching a generational transition.

According to McKinsey, approximately 52% of U.S. small and medium-sized businesses are owned by individuals who are within ten years of retirement, compared with 35% in 2005.

The report estimates that approximately six million businesses with fewer than 500 employees will face ownership transitions by 2035. More than one million are considered viable candidates for sale or employee ownership.

These businesses represent much more than storefronts and company names.

They include local manufacturers, construction companies, professional-service firms, restaurants, retailers, distributors, and countless other enterprises that support communities throughout the country.

Many have spent decades developing customer relationships and building reputations that would be difficult for a new competitor to replicate.

Yet when their owners retire, someone must decide what happens next.

Some businesses will remain within their founding families. Others may be transferred to employees or sold to competitors. Some will attract first-time entrepreneurs looking for an established company to operate.

And others may close because a suitable successor cannot be found.

The opportunity isn’t simply that millions of businesses could change hands. It’s that existing customer relationships, equipment, operating systems, and institutional knowledge could be transferred to new owners rather than disappearing.

For aspiring entrepreneurs, that introduces a question worth considering:

Why build every part of a new business from scratch when an established company might already provide the foundation you’re looking for?

Buying a Business Instead of Starting One: A Different Path to Entrepreneurship

Starting a new business requires more than filing formation documents and opening a bank account.

An entrepreneur must develop a product or service, attract customers, establish supplier relationships, create operating procedures, and determine whether the business can generate enough revenue to survive.

Those challenges can take years to overcome.

Buying an established business changes the starting point.

Rather than creating every component of the company, the buyer acquires an existing operation with a history that can be evaluated.

Consider the differences:

Starting a new business	Buying an established business
Build a customer base	May acquire existing customers
Establish brand recognition	May acquire an established reputation
Develop operating procedures	May inherit existing systems
Recruit and train employees	May retain an experienced workforce
Establish supplier relationships	May continue existing relationships
Develop a revenue history	Can review historical financial performance
Requires startup capital	Requires acquisition capital and ongoing operating funds

Of course, an existing business doesn’t guarantee success.

Customers may leave after an ownership change. Employees may choose not to stay. Equipment may require replacement, and historical profitability may depend heavily on the departing owner’s personal relationships.

The advantage is not the elimination of business risk. It is the opportunity to evaluate an existing operation before deciding whether to invest in it.

What Is Actually Happening in the Business-for-Sale Market in 2026?

The anticipated ownership transition is a long-term trend, but there are already signs that business acquisition is attracting a changing group of entrepreneurs.

According to BizBuySell’s first-quarter 2026 Insight Report, 49% of surveyed small-business buyers identified themselves as people transitioning away from corporate careers, up from 44% in the previous quarter.

The report also recorded a median sale price of $350,000 and median annual cash flow of $165,256 among the transactions it tracked during the quarter.

These figures describe transactions reported through BizBuySell’s marketplace and broker network, not every small business sold in the United States.

The reported cash-flow figure should also not be confused with the amount a new owner can expect to take home. Actual earnings depend on financing costs, taxes, reinvestment needs, owner compensation, and the business’s future performance.

Nevertheless, the data illustrates that purchasing an operating business is not exclusively an activity for large corporations or private equity firms.

Individual entrepreneurs are participating in this market, too.

Are more businesses actually changing hands?

Not every indicator points toward an immediate increase in completed acquisitions.

BizBuySell reported that 2,117 businesses changed hands through its tracked market during the second quarter of 2026, a 10% decline from the previous year.

Its report also described buyers becoming more selective as financing conditions and scrutiny of business performance affected transactions.

This is an important distinction.

A growing number of owners approaching retirement does not automatically mean that every business will be available, affordable, or financially attractive.

Finding the right opportunity still requires research, preparation, and patience.

What Types of Established Businesses Could Be Worth Exploring?

The ownership-transition story extends far beyond restaurants and retail stores.

For an entrepreneur considering an acquisition, the important question is not simply which industries are growing.

It is which types of businesses match the buyer’s experience, available capital, and willingness to manage day-to-day operations.

1. Local service businesses

HVAC companies, plumbing businesses, landscaping services, commercial cleaning companies, and property-maintenance firms may have recurring customers and established local reputations.

An entrepreneur with relevant experience might consider purchasing a company whose owner is preparing to retire.

However, buyers should examine licensing requirements, employee retention, service contracts, and the company’s dependence on the departing owner.

2. Small manufacturing and distribution companies

An established manufacturer may have specialized equipment, trained employees, supplier relationships, and long-standing commercial customers.

Acquiring such a company could provide an opportunity to enter an industry without developing an entire manufacturing operation from the ground up.

Buyers should investigate equipment condition, capital requirements, customer concentration, inventory, and whether specialized technical expertise is essential to operating the company.

3. Professional-service businesses

Bookkeeping firms, marketing agencies, IT service providers, and other specialized companies may offer opportunities for entrepreneurs with relevant professional experience.

The central consideration is whether clients are loyal to the business itself or primarily to the departing owner.

Professional licensing and client-contract transfer requirements may also affect a transaction.

4. Established retail and community businesses

Independent hardware stores, specialty retailers, neighborhood shops, and other local businesses may have valuable locations, recognizable brands, and established customer relationships.

Buyers need to evaluate inventory, lease terms, competition, operating margins, and how consumer purchasing habits are changing.

The right acquisition is not necessarily the business with the highest revenue or the most recognizable name.

A smaller company with dependable customers, manageable expenses, and operations that match the buyer’s capabilities may offer a very different ownership experience from a larger business that requires substantial additional investment.

Where Do You Find Established Businesses Whose Owners Are Ready to Sell?

Not every business approaching an ownership transition has a public listing.

Some owners work with business brokers. Others explore a sale privately through accountants, attorneys, industry contacts, or existing business relationships.

For prospective buyers, there are several avenues worth investigating.

Business-for-sale marketplaces

Platforms such as BizBuySell  and BizQuest  provide listings across industries and geographic markets.

These marketplaces can help prospective buyers understand asking prices, available business categories, and the financial information sellers are willing to disclose.

Business brokers

Business brokers represent owners who are considering selling their companies and help coordinate potential transactions.

They may provide access to businesses that are not widely advertised, although buyers should understand whom the broker represents and how the broker is compensated.

Industry and professional networks

Trade associations, local chambers of commerce, accountants, and attorneys may be familiar with owners exploring succession options.

These relationships can be particularly useful for entrepreneurs interested in a specific industry or geographic market.

Direct conversations with business owners

An entrepreneur interested in a particular industry may approach an owner to explore whether a future ownership transition is being considered.

A business owner who is not actively advertising a company for sale may still be interested in discussing succession planning.

However, approaching an owner is only the beginning. Both parties must determine whether the business, purchase price, financing, and proposed transition make sense.

Can You Buy an Established Business Without Paying the Entire Purchase Price Upfront?

One of the biggest barriers to buying an established business is financing.

A company with equipment, inventory, employees, customers, and consistent revenue may require a substantial initial investment.

But buyers do not necessarily need to pay the entire purchase price from personal savings.

Depending on the transaction, financing may involve a combination of personal capital, conventional lending, seller financing, and SBA-backed loans.

SBA 7(a) loans: Financing a business acquisition

The U.S. Small Business Administration’s 7(a) loan program can support complete or partial changes of business ownership.

The program has a maximum loan amount of $5 million, although individual loan approval depends on eligibility, lender underwriting, repayment ability, and applicable SBA requirements.

An SBA loan is not a government grant or a guarantee that a particular acquisition will be approved.

The buyer must demonstrate that the proposed transaction meets the program’s requirements and that the business can reasonably support repayment.

For current eligibility requirements and financing information, visit the SBA’s official 7(a) loan program page .

Seller financing: When the departing owner helps finance the purchase

Another possible arrangement is seller financing.

Instead of receiving the entire purchase price at closing, the seller agrees to accept a portion of the payment over time under negotiated terms.

For example, a business owner might sell a company for $400,000, receive $300,000 at closing, and finance the remaining $100,000 through a promissory note.

The buyer would then make payments according to the agreement.

This is an illustrative example, not a typical or guaranteed financing arrangement.

Seller financing can help bridge a funding gap, but both parties must carefully evaluate repayment terms, security interests, default provisions, and the financial risks involved.

When an SBA-backed loan is also part of the transaction, seller financing must comply with applicable lender and SBA requirements. It should not be assumed that a seller-financed amount will automatically satisfy the buyer’s required equity contribution.

Before Buying a Business, Find Out What You’re Really Purchasing

An established business may look attractive from the outside.

It has employees, customers, equipment, and a history of generating revenue.

But what happens when you examine the financial records?

A company reporting $1 million in annual sales might appear successful, yet its operating expenses, debt obligations, and capital requirements could leave very little cash available to its owner.

A business might also depend on one major customer, an aging piece of equipment, or the personal relationships of the owner who is preparing to retire.

This is why due diligence is essential.

The SBA recommends reviewing financial information, contracts, leases, inventory, licensing requirements, and other operational details when evaluating an existing business.

Business Acquisition Due Diligence: A Quick-Reference Checklist

What to review	Why it matters
Financial statements and tax returns	Verify historical revenue, expenses, and profitability.
Bank records and cash flow	Determine whether the company generates sufficient cash to support operations and acquisition financing.
Outstanding debts and liabilities	Identify financial obligations that may affect the purchase.
Customer relationships	Determine whether revenue depends heavily on a few customers or the departing owner.
Employees and management	Evaluate staffing needs and the company’s ability to operate after the ownership transition.
Equipment and inventory	Identify potential replacement costs, obsolete inventory, and future capital requirements.
Contracts, leases, and licenses	Determine which agreements and authorizations can continue after the sale.
Legal and tax obligations	Investigate pending litigation, liens, unpaid taxes, and other potential liabilities.
Owner transition arrangements	Determine whether the seller will provide training, introductions, or other transition assistance.

A qualified accountant and business acquisition attorney can help a buyer evaluate the transaction and identify issues that might not be obvious from the seller’s financial summary.

The objective is to understand not only what the business earned in the past, but also what it may cost to operate after ownership changes.

Do You Need to Form a New LLC When Buying an Existing Business?

This is an important consideration for entrepreneurs exploring business acquisitions.

Buying a business does not automatically require forming a new limited liability company.

The appropriate structure depends on what is being purchased, the existing company’s legal structure, financing requirements, tax considerations, and the buyer’s circumstances.

Two common acquisition approaches illustrate the differences.

Asset purchase	Equity purchase
The buyer purchases specified business assets, potentially through a newly formed LLC or another entity.	The buyer acquires ownership interests in the existing company.
Assets may include equipment, inventory, intellectual property, and certain contractual rights.	The existing legal entity generally continues operating under its current structure.
Contracts, licenses, and permits may require separate assignment, consent, or new applications.	Existing contracts and licenses may remain with the entity, subject to change-of-control and other requirements.
Certain liabilities may remain with the seller, although successor-liability rules and transaction terms can create exceptions.	The acquired entity generally retains its existing obligations and liabilities.

For example, an entrepreneur purchasing the assets of a retiring business owner might establish a new LLC to complete the acquisition and operate the business going forward.

Alternatively, a buyer might acquire the membership interests of an existing LLC, allowing the legal entity to continue under new ownership.

Neither structure is automatically appropriate for every transaction.

Will you need a new EIN after purchasing a business?

The answer depends on the transaction and the legal and tax structure of the business.

A newly formed entity may need its own Employer Identification Number. In other situations, an existing entity may retain its EIN after a change in ownership.

The IRS provides specific rules for different entity types and ownership changes.

For entrepreneurs considering a new entity, MyUSACorporation offers services related to LLC formation  and obtaining an EIN .

The appropriate formation and registration steps should be determined before completing the acquisition, with guidance from qualified legal and tax professionals.

What Does This Ownership Transition Mean for Existing Small-Business Owners?

The opportunity is not limited to first-time entrepreneurs.

An existing small-business owner might consider acquiring another company to expand into a new geographic market, add complementary services, obtain specialized equipment, or establish relationships with additional customers.

Imagine a successful local landscaping company purchasing a retiring competitor.

The acquisition could provide additional service routes, equipment, experienced employees, and an established customer base.

Or consider a bookkeeping company acquiring a retiring owner’s client portfolio, subject to client consent and the terms of the transaction.

Rather than developing every new customer relationship individually, the acquiring company may be able to expand through an established operation.

However, growth through acquisition can also introduce financial strain, employee-management challenges, and operational complexity.

A buyer must determine whether the combined businesses can operate effectively and whether the acquisition price is justified by the value being acquired.

For existing business owners, acquisition is another possible growth strategy—not a substitute for evaluating the economics of the transaction.

What If You’re the Business Owner Preparing to Retire?

The other side of this story deserves equal attention.

For an entrepreneur who has spent decades building a company, selling the business may represent one of the most significant financial decisions of a lifetime.

But preparing for a successful ownership transition involves more than finding someone willing to purchase the company.

A prospective buyer will want to understand how the business operates, whether its financial records are reliable, and whether it can continue functioning without the current owner.

Business owners considering retirement can begin by examining several important questions:

• Are the company’s financial records organized and current?
• Can the business operate without the owner’s daily involvement?
• Are customer and supplier relationships documented?
• Are key employees prepared to remain after a sale?
• Is there an established succession plan?
• Has the owner obtained an independent business valuation?
• Would a family member, employee, outside entrepreneur, or existing competitor be a potential successor?

The earlier an owner begins preparing, the more time there may be to address issues that could complicate a future sale.

A successful ownership transition can preserve an existing business while providing the departing owner with an opportunity to realize the value of years of work.

Frequently Asked Questions About Buying an Established Business

Is buying an existing business less risky than starting a new one?

Not necessarily. An established company may provide historical financial information, customers, and operating systems that a new business does not have. However, it may also carry existing liabilities, outdated equipment, declining demand, or other problems. The risk depends on the specific business and transaction.

How much money do you need to buy a small business?

There is no universal minimum. Purchase prices vary widely depending on the industry, profitability, assets, location, and other factors. Buyers should budget for the purchase itself, professional fees, working capital, and potential improvements after closing.

Can you use an SBA loan to buy an existing business?

Yes. Qualifying business acquisitions can be financed through the SBA 7(a) loan program. Approval depends on applicable program requirements and the participating lender’s evaluation of the borrower and transaction.

Can you buy a business from someone who is retiring?

Yes. A retiring owner may sell a business to an individual entrepreneur, an existing company, family members, or employees. The transaction can involve business assets or ownership interests, depending on the circumstances.

Do you need an LLC to buy an existing business?

Not always. A buyer may acquire an existing entity or use a newly formed or existing entity to purchase business assets or ownership interests. The appropriate approach depends on the transaction, liability considerations, financing, and applicable legal and tax requirements.

Can you buy a business and keep its existing employees?

Potentially. Employee retention depends on the transaction structure, employment agreements, applicable law, and whether employees choose to remain. Buyers should evaluate staffing and transition plans before closing.

Final Thoughts: America’s Next Generation of Entrepreneurs May Inherit What the Last Generation Built

The next decade could bring a significant change in how Americans become business owners.

For some entrepreneurs, the opportunity will still begin with a new idea, a business plan, and the decision to build a company from the ground up.

For others, the opportunity may already exist.

It could be the local manufacturer whose owner is approaching retirement. The service company with loyal customers but no family successor. The neighborhood business that has operated successfully for decades but needs someone new to lead it forward.

These companies represent years of investment, experience, relationships, and hard work.

Their future will depend on whether the next generation sees value in continuing what previous entrepreneurs created.

Buying an established business is not necessarily easier or less expensive than starting one. It requires capital, research, careful financial evaluation, and a willingness to take responsibility for an existing operation.

But for an entrepreneur with the right experience, resources, and vision, it may provide a different path to business ownership.

The next great American business opportunity may not begin with a groundbreaking idea.

It may begin with a conversation between an owner who is ready to retire and an entrepreneur who is ready to take the company into its next chapter.

Considering Buying or Starting a Business?

Whether you’re building a company from the ground up or establishing a new entity to acquire an existing business, understanding your formation and registration requirements is an important early step.

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