The Silver Tsunami: What SME retirements mean for M&A and young entrepreneurs

The UK’s aging population of Baby Boomers are now approaching retirement age, and with many of them small business owners, this “Silver Tsunami” is likely to result in thousands of well-established businesses coming to market as owners seek exit strategies, opening up a wealth of opportunities for M&A activity and for aspiring entrepreneurs looking to get their foot in the door.

According to research, almost a third (30%) of SME owners plan to sell part or all of their business within the next two years, up from 20% just 12 months ago. But despite these intentions and the scale of the opportunity that they represent, many owners are yet to set out clear succession plans, and even for those that have, transitions of ownership are unlikely to come without challenges. Of those who were planning a full or partial sale, 20% cited retirement as a factor and a further 20% said they were seeking a sale due to an absence of succession options within their family. As a result, financial advisers are likely to play an increasingly key role in helping all parties to navigate this market shift.

The scale of the Silver Tsunami

The bulk of this wave is expected to stem from a generation of Baby Boomers who will be reaching retirement age in the coming years.

Research using BizCrunch found that 147,104 company shareholders in the UK are currently aged 60 or over, with a further 59,816 70 or above. Companies House filings revealed that in June 2025, 620,000 company directors in the UK were aged 67, the state retirement age, or older. This tallies with our own experience at Gerald Edelman, with a large proportion of the business owners that we work with aged 60 or over (43%) and 24% 65 or over. Based on these statistics, a vast swathe of UK directors will be thinking about, or actively planning their retirement, particularly in light of economic and political uncertainty and with legislation changes, such as employer National Insurance Contribution rises.

When considering their exit from a business, the route that owners may gravitate towards will be influenced by numerous factors such as the nature of the industry they are operating in, but also their personal aspirations for its future.

As of March 2025, two thirds of family business owners (66%) for example, intend to pass their business on to a family member, according to research, but this doesn’t mean that they are prepared to do so, only a third (34%) have formal succession plans in place. Family succession plans can sometimes run the risk of being based on assumptions that their children will want to carry on the mantle without having formal confirmation that they are in fact happy to do so. As a result, many owners may need to look for alternative exit routes.

Implications for the M&A market

The increasing supply of businesses will have numerous implications for the M&A market and lead to increased opportunities for advisers and for buyers looking to start or build their portfolio.

But the trend isn’t without its challenges, for example, the surge in businesses could also potentially outstrip demand and put pressure on valuations for unprepared sellers. If succession plans aren’t in place, there is also a risk of business failure and job loss, which can harm local economies.

Consequently, there’s an increased need for businesses to professionalise, reduce owner dependency, and implement resilience planning in order to become more attractive to buyers. Accountancy and advisory firms will play a huge role in increasing the chances of success and securing maximum value from the sale, such as ensuring owners are preparing for sale as early as possible.

There’s a lot to consider when selling a business, and it’s normal for owners to struggle with certain aspects and complexities involved at each stage of the process, particularly if they have little experience with business transactions. That’s why the support of specialist Deal Advisory services can ease the process whilst delivering peace of mind every step of the way.

The opportunity for young entrepreneurs

The supply of businesses for sale presents opportunities for young entrepreneurs to access established businesses which already have a solid model, customer base and stable cash flow. Acquiring a retiring founder’s business can result in a faster growth path and lower risk.

Research shows that entrepreneurs are getting younger – with the average age of starting a business in the UK now at 32 and a quarter (25%) of founders now under the age of 24.

Structures such as Entrepreneurship Through Acquisition (ETA) are making acquisitions more accessible to these young buyers. Entrepreneurial acquisitions have become a more mainstream pathway for aspiring entrepreneurs, savvy investors and business owners looking for a successor who will carry their legacy forward. The model offers owners a succession solution as well as a capital exit, often helping to ensure the long-term stability of their businesses.

A buyer will usually be looking for a business with an established management team (that is staying in the business), alongside significant opportunities for growth and expansion. As such, they will be looking to build strong relationships with the seller, in order to ensure they are seen as a trusted pair of hands to take care of their life’s work and to convince them that they are the right person to continue their legacy.

Cultural and operational challenges

When it comes to business acquisitions, it’s more than just the numbers. It’s crucial to find a cultural compatibility between the seller and buyer. Differences in leadership styles can cause friction and risk derailing a deal or transition, so it’s important to have an expert on board to navigate this side of a deal.

Being able to facilitate a smooth transition from founder-led to new leadership is crucial for the financial health of the company but also for the wellbeing of the workforce. At Gerald Edelman facilitating positive relationships between likeminded young, intelligent, and ambitious entrepreneurs and seasoned, passionate veteran businesspeople is one of the most rewarding parts of advising on deals and achieving a successful outcome for all sides.

Conclusion

The Silver Tsunami represents one of the biggest shifts in SME ownership in decades and has the potential to give young businesspeople a chance to reshape industries and fuel UK economic growth with a modern outlook and different perspective.

Selling a business venture is a complex process, and putting a foot wrong at any stage can easily lead you to face costly charges and legal repercussions. Gerald Edelman is well-placed to support both retiring founders and new entrepreneurs in navigating this market shift.

Contact our team of experts today if you need support with selling your business, identifying acquisition opportunities and navigating succession planning.