More than a third of SMEs are planning to sell next year as inflation concerns and tariff pressures leave the gap in combined planning plans.
The number of small and medium-sized business owners is increasing, according to the latest survey of small and medium-sized businesses released by the US Bank.
A national survey of 1,000 SME owners supplemented by a follow-up in May found that many people were experiencing the stress associated with inflation, tariffs and funding shortages despite reporting recent business growth.
The US Bank's report also highlighted the growing gap between owner succession intentions and actual plans, particularly among older entrepreneurs.
Currently, more than half of small business owners are over 55 and have them in the past ten years of retirement, but only 54% have official succession plans.
Meanwhile, three-fifths (62%) have accelerated their retirement timelines over the past five years, with 37% planning to sell their businesses within the next 12 months.
Despite strong motivation to leave legacy, 85% said they became owners to create what they could convey – many say they lack the tools and clarity to move forward. 53% of respondents reported that they had no resources or guidance to plan succession, while 56% are worried that they won't get a fair price when the time comes for sale.
“There is a real opportunity for financial institutions to emerge as strategic partners to help small businesses navigate the following,” said Shruti Patel, chief product officer for business banking at US banks in a statement summarizing the findings.
Young entrepreneurs appear ready to intervene. 36% of GenZ and millennial respondents say they plan to acquire businesses from retired owners.
The report also found near-unanimous concerns with wider economic situations among all respondents (98%), rising inflation and costs (92%), competition (92%), and how much consumers can maintain their spending among top stressors (86%).
In a related memo, bank follow-up surveys show that at least 58% of business leaders are concerned that tariffs could put pressure on business operations, with 57% expecting an increase in input costs as a result.
Nevertheless, 88% have reported business growth over the past year. Additionally, in response to these pressures, 48% of owners are prioritizing revenue growth next year, while others are focusing on staffing (33%) and improving operational efficiency (32%).
Generating AI and digital tools are also attracting attention among small business leaders, with 57% already using or planning on using AI. Most users apply tools to create content, marketing and data analysis.
The whole path to AI implementation is not smooth sailing. 81% are causing stress to keep up with technological changes, and 56% are worried that AI or automation will be replaced by.
“From embracing generative AI to positively thinking about inheritance, owners are seriously thinking about the future of their business,” Patel said.
Despite the challenges, optimism remains high. 80% of owners say they will start their business again today if they are given the option to start again.
