What will happen when nearly half of America’s small business owners retire at the same time? That’s the question many communities face as baby boomers—who make up about 20 percent of the US population and own 40 percent of small businesses—reach retirement age by 2030. This demographic shift is predicted to involve about $14 trillion in business assets over the next decade, creating one of the largest economic transitions in modern history.

This phenomenon, commonly referred to as the silver tsunami, marks the moment when baby boomers outnumber children under 18. Though a quarter of small business owners express an interest in transferring their company, fewer than a third have an exit plan for when they retire. Without a plan, thousands of small businesses could shut down, taking away jobs, community wealth, and cultural legacy with them. This moment also presents a promising opportunity, especially for Black entrepreneurs looking to acquire established businesses and build generational wealth.

As baby boomers continue to retire at accelerating rate, many hope their children will take over the family business. However, the next generation have shown little interest in running these companies and prefer to sell. This creates a critical gap in ownership.

This transition will be huge. Baby boomers own 2.9 million U.S. businesses, employing around 32.1 million workers, paying about $1.3 trillion in annual payroll and earning $3.5 trillion in revenue yearly. These small businesses are more than numbers, they’re community anchors. Therefore, for most small business owners, selling to local entrepreneurs is the ideal choice, but for the transition to be successful, this option requires intentional actions from interested buyers and a robust support system.

Though Black Americans make up 14.4 percent of the population, only 3.3 percent of all employer businesses are owned by them. Overall, Black entrepreneurs continue to face barriers to launching and keeping small businesses, including a lack of access to resources, intergenerational wealth, and networking opportunities. But the silver tsunami offers a rare chance to beat the system and create a less risky option that allows Black entrepreneurs to bypass some of these obstacles, benefit from an existing client base with experienced staff, and take advantage of a proven business model to build generational wealth.

For Black entrepreneurs to thrive, it’s imperative that local stakeholders and business support organizations facilitate these business transitions through providing programs for improved access to capital for buyers, offering technical assistance, and advocating for supportive policy—all within the next five years, before the silver tsunami hits.

How local leaders can help Black entrepreneurs achieve economic success

Local leaders, including city officials, philanthropic organizations, and community leaders, have an important role in helping Black entrepreneurs take advantage of the silver tsunami. To help inform their decisionmaking, the Urban Institute developed a forthcoming guide that outlines policies and programs across four key areas: access to capital, networks, real estate, and policy support. These strategies are designed to support all entrepreneurs, but they’re likely to disproportionately benefit Black entrepreneurs, who often face high barriers to entry. Here are three ways the guide suggests local stakeholders can help ensure transitions unlock economic growth:

1. Provide access to capital: Business support organizations can create programs that help entrepreneurs and small businesses grow by offering financial support through grants and partnering with community development financial institutions to provide flexible lending options.
2. Offer technical expertise, mentoring, and networking: Chambers of commerce, business incubators, universities, and small business development centers can create programs that provide access to mentoring and networking opportunities, in recognition that social capital can be an important contributor to small business success.
3. Create policy support: Public policies can create supportive ecosystems with the conditions necessary for small businesses to thrive. Policies supportive of small businesses may include tax policies and incentives that encourage investment or reduce the tax burden, procurement policies that prioritize small businesses, and fewer barriers in business licensing and permitting processes.

With the help of local stakeholders, Black entrepreneurs have a unique chance to act now and turn these looming retirements into a pathway for economic opportunity. With the right planning and support, the retirement of one generation can become the launchpad for another.