country where the loss of even a single business can be devastating. In rural America, this is the most common outcome; when a rural business closes, those jobs disappear, and are rarely replaced.15 With an uneven road to a post-COVID recovery compounded by the Silver Tsunami, cities, towns and villages are at risk of losing many of their small businesses. Thirty-five percent of small business owners plan to exit within the next 5-10 years and 21 percent intend to leave in less than five years.16 However, about 80 percent of business owners have not created or shared succession plans.17 While many owners do not have formal exit plans, many have given it some thought, with 48 percent considering an outside buyer and 39 percent interested in transferring ownership to a family member.18 But this also presents a dilemma: Nationally, only 12 percent of secondgeneration businesses successfully transition to the next generation in the family, and only 20-30 percent of commercial listings actually sell.19 Some of these businesses, even those that are profitable, will simply close their doors due to lacking a succession plan. Many other successful businesses will be sold to out-of-state companies or private equity firms whose interests lead them to reduce local staff or relocate entirely. Meanwhile the wealth developed in these companies, which once stayed local, now moves elsewhere. While not all businesses can be saved by employee ownership because of the business model, capital needs, or market challenges, some can be: Business owners need an alternative to selling to an outside buyer, or worse, closing their doors.
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NAT ION A L LEAG UE OF C ITIES
56% More than half of business owners plan to leave their businesses in the next 10 years.
