The Business Exit Strategy Crisis: Why 70% of Small Businesses Fail to Sell (And How to Beat the Odds)

The Coming Wave of Business Transitions

Here’s the thing: we’re staring down the biggest business ownership transition in American history, and most people aren’t ready for it.

With 51% of privately held businesses owned by Baby Boomers, we’re looking at a massive wave of transitions. By the end of 2024, the youngest boomers turned 60, pushing more owners into traditional retirement age. In fact, 75% of business owners are looking to exit their business in the next decade, representing $14 trillion of business wealth in motion.

But here’s where it gets concerning: only 20 to 30% of businesses that go to market actually sell.

Let that sink in. Nearly half (49%) of business owners plan to exit within the next five years, yet most will fail to complete a sale. That’s not just a statistic, it’s potential retirements derailed, legacies lost, and employees left uncertain about their futures.

Why Most Business Sales Fail: Common Pitfalls

After working with 300+ businesses and supporting over $1B in capital transactions at Bridge, we’ve identified the deal-killers:

Messy or incomplete financials. Think of your financials as the business’s report card. Buyers and banks won’t move forward without clean, organized records that tell a compelling story.

Heavy owner dependency. If the business can’t run without you, buyers see risk, not opportunity. They need systems and processes, not a one-person show.

The urgency gap. Here’s a shocking stat: 63% of business owners say it’s “too early” to plan their exit, and 45% are “too busy”. This procrastination kills deals before they start. Even more concerning, one-third of owners either don’t have a long-term plan or are unsure what will happen after they leave.

Missing the right team. While 68% of owners sought transition advice in 2023, 78% still lacked a formal transition team. Getting advice and actually assembling the right advisors are two very different things.

Building a Successful Exit Strategy

Let’s be real, planning your exit isn’t something you do six months before retirement. The most successful business sales start years in advance.

Professional guidance matters. Financial advisors have become the most trusted advisors for business owners, jumping from fifth place in 2013 to first place in 2023, ahead of accountants, attorneys, spouses, and bankers. This trust translates into results: 58% of business owners now have a documented exit strategy prepared or reviewed by a financial advisor.

Education is driving change. According to the Exit Planning Institute, 70% of business owners now understand their exit options. Formal exit planning education has nearly doubled, from 35% of business owners receiving it in 2013 to 68% in 2023. Business valuations tell a similar story: 60% of owners have had their business formally valued within the last two years, up dramatically from just 18% in 2013.

Timeline is everything. An effective business exit strategy typically takes three to five years to execute. You need time to strengthen financials, reduce owner dependency, document processes, and build a management team that can operate independently.

Pro Tip: Start with a business valuation at least 2-3 years before you plan to sell. This gives you time to address weaknesses and maximize value, and it might reveal your business is worth more than you thought.

The Bridge Solution

At Bridge, we’ve lived this journey, both as small business owners and through years of M&A experience. As a founding team, we’ve served 300+ businesses and supported over $1B in capital transactions.

We saw the gaps in the lower middle market, and 18 months ago, we launched Bridge with a simple mission: increase the success rate of business sales.

Since then, we’ve built an end-to-end M&A platform that supports every step of buying and selling a business. From preparing your business and getting it valued to creating deal materials and securely sharing data with buyers—we handle it all on one platform.

Our goal is to streamline the entire process so buyers and sellers can move forward with clarity, confidence, and ease.

It’s been an honor to work with dozens of business owners since starting Bridge. We’re truly grateful for the trust, partnerships, and momentum we’re building together.

Taking Action: Next Steps for Business Owners

If you’re thinking about your exit, whether that’s next year or in a decade, here’s what to do now:

Address the fundamentals. Only 14% of Baby Boomers list exit strategy planning as a top priority, citing lack of time as the primary reason. Don’t let “too busy” become the reason your business doesn’t sell. And if you’re among the 70% of owners without a formal estate plan, now’s the time to fix that.

Choose your path intentionally. 70% of business owners prefer internal transfers, 17% opt for external sales, and 13% remain undecided. Understanding your options early, including the fact that 54% aim to pass their business to family, helps you plan accordingly.

Focus on profitability. 54% of owners believe ensuring their business remains profitable is key to a successful exit, and for good reason. Employers planning to sell or transfer report significantly higher median profits than those planning to shut down. 

Friendly Tip: Don’t wait until you’re ready to sell to start preparing. The business owners who successfully exit start the process years in advance, and they sleep better at night because of it.

Start Your Exit Planning Today

The wave of Baby Boomer business transitions is here. With 12 million boomer-owned businesses up for grabs and $14 trillion of business wealth in motion, this represents the single biggest M&A opportunity of our time.

The question isn’t whether businesses will change hands, it’s whether they’ll change hands successfully, preserving legacies and creating opportunities for the next generation.

Bridge Financial provides free business valuations, health scores, and seller readiness evaluations to help owners get ahead of this crisis. Whether you’re ready to sell or just starting to think about your exit, we can help you understand your options and build a clear path forward.Get in touch for a free consultation with a Bridge advisor and take the first step toward a successful exit.