🏈 THE SIDELINE

Kinza here.

McKinsey published a landmark study on the economic crisis small business America is facing.

Here’s what I’m covering this week:

1. The McKinsey statistics that should terrify every American

2. Why America is about to lose its economic backbone

3. The four specific steps to make an unsellable business sellable

4. And more...

🌎 Expand Your Thinking

As millions of baby boomers retire, the United States is on the brink of an unprecedented wave of small-business ownership transitions—posing challenges for communities but also opening the door to economic renewal. Here’s the landmark study (Link)

The DealStats Value Index summarizes private-company transaction multiples and margins through Q4 2025 (Link)

Who’s Buying in the Lower Middle Market in 2026? (Link)

The Statistics Nobody Wants to Face

McKinsey just released a study with two numbers that tell a devastating story:

2.9 million Baby Boomer-owned businesses will attempt ownership transfer in the next decade…

92% of small businesses that try to sell actually shut down instead.

Do the math. That's 2.7 million businesses that will simply close their doors. Not because they're unprofitable or because their markets collapsed. But because nobody will buy them.

32 million American jobs hang in the balance. Trillions in potential wealth will evaporate. And the backbone of Main Street commerce will crack.

The Real Economic Crisis

This isn't just about individual business owners losing their retirement plans. It's about entire communities losing their economic foundations.

Think about the hardware store that's been on Main Street for 40 years.

The regional manufacturer employing 75 people in a town of 5,000.

The family-owned HVAC company serving three counties.

The local distributor that sponsors every youth sports team.

When the 68-year-old owner discovers nobody will buy the business, the doors close. Jobs disappear in communities with no alternatives. Buildings will sit empty, tax revenue will vanish, and the fabric of local commerce will unravel.

Rural and small-town America will be hit hardest. These communities don't have the buyer pools or capital access that urban markets do. Their anchor businesses are often the least transferable because they're built entirely on local relationships and owner reputation.

And in urban America, many buyers exist, but businesses aren’t as transferable as buyer or sell hopes to be.

What I See Every Single Day

As an exit advisor, I have the same conversation over and over with business owners in their 60s:

They've spent 30 years building something they're proud of: strong income, loyal customers and good people. They assume someone will want to buy what they've built.

Then I ask simple questions:

"What happens to revenue if you're not here?" Silence.

"Could someone else maintain your customer relationships?" Uncomfortable shifting.

"If I walked in tomorrow, could I run this business?" Nervous laughter.

The brutal truth emerges…they haven't built a business. They've built a well-paying job that only works because of them.

Remove the owner and revenue collapses within months. Customer relationships erode and operational knowledge vanishes. What looked like a million-dollar asset becomes worthless.

This is the reality for the vast majority of those 2.9 million businesses heading toward ownership transfer.

What Makes a Business Unsellable

Customer concentration. The top 3 customers represent 50-70% of revenue.

Owner dependency. Every major decision flows through the owner. Customer relationships exist because of personal reputation.

No documentation. Critical processes live entirely in people's heads.

Stagnant markets. The business serves a declining industry or geographic area.

Financial chaos. The books mix personal and business expenses. Cash flow is unpredictable.

Most small business owners have optimized for personal income, not business value. And that decision will cost them everything when they try to exit…which is why we do the work together ahead of time.

The Four Steps to Sellability

Step 1: Eliminate Customer Concentration (18-24 months)

No single customer can represent more than 15% of revenue. Calculate current concentration, develop new customer acquisition plans, and set hard caps on business from any single customer.

Step 2: Clean Up Financials & Document Everything (3-6 months)

Everything in your head needs to be written down. Create process documentation, record decision-making criteria, map all relationships, and build training materials that could onboard someone with no industry experience. Your books need to be clean, you need to understand your profit margins, and tax returns should match your books.

Step 3: Build Management Depth (3-6 months)

Hire or develop independent decision-makers, establish clear authority levels, and gradually step back from daily operations. Test the team's ability to function without you. Taking a fine-tooth comb to your P&L often allows businesses to afford such a team.

Step 4: Create Visible Growth Potential (Ongoing)

Identify 3-5 realistic growth opportunities a new owner could pursue. Document why these opportunities exist and what resources would unlock them.

The Timeline Reality

This transformation takes 1-3 years of focused effort.

If you're 65 and planning to retire at 70, and you’ve got a customer concentration issue…you might be too late or forced to sell at a discount.

The only thing you can do is start now. Even if you're not planning to exit for a decade. Because waiting until you're ready to retire means you've spent your career building something with no exit value.

The Choice

Start building sellability today, knowing it will take years and require uncomfortable changes.

Or accept that your business will likely close when you're ready to exit, destroying any hope of retirement wealth.

The great ownership transfer crisis isn't coming. It's already here. The only question is whether you'll be ready when it reaches you.

How I Can Help

If you need honest feedback on whether your business is sellable and what it would take to fix it, reply to this email.

I'll tell you the truth about what buyers would see in your business and the specific work required to make it transferable.

Until next week,

Kinza,

P.S. If you know a business owner in their 50s or 60s planning to "retire someday," forward this newsletter. They need to hear this before it's too late.