If you own a manufacturing company, or you are about to buy one, you have been shown the same four numbers. They appear in advisor slide decks, bank newsletters and trade articles, usually with no source beside them.
We write about ownership changes, so we needed to know which numbers we could stand behind. We traced each of the four back to where it started. Three of them do not say what they are quoted as saying. The fourth is a guess with a wide range.
Here is the short version.
"Only 30 percent of family businesses reach the second generation, 13 percent the third and 3 percent the fourth." This comes from one 1987 study of 200 family manufacturers in Illinois. It shows that a third of those firms were still family-owned after a full second generation, roughly sixty years.
"70 percent of family businesses fail in the handoff." This is the same 1987 study, turned upside down. It adds nothing new, because it is the 30 percent figure restated.
"A $10 trillion transfer of business wealth is coming." This comes from a trade association article with no source or method, and from an advisor trade body's survey estimate. It shows only that the total is large. Sourced estimates start at $5 trillion.
"10,000 baby boomers retire every day." This comes from a 2010 Pew Research note. It shows that about 10,000 people a day would turn 65.
30, 13 and 3
This is the oldest of the four. It comes from John Ward's 1987 book, Keeping the Family Business Healthy. Ward and his colleagues used public records to follow 200 family-owned manufacturers in Illinois. They counted a firm as a success only if majority ownership passed to the next generation of the same family.
Three things get lost when the numbers are repeated.
First, the sample is one industry in one state, studied forty years ago.
Second, a firm that was sold at a good price counted the same as a firm that closed. A founder who built a company, sold it well and retired shows up in that study as a failure.
Third, the timescale. A generation in the study is about thirty years. A third of the firms were still in the family after two of them. In 2021, Josh Baron and Rob Lachenauer made this point in Harvard Business Review, in an article titled "Do Most Family Businesses Really Fail by the Third Generation?" Their answer was no. Lasting sixty years under the same ownership is a strong record for any kind of company.
Later research that followed families across all of their ventures found something closer to the opposite of the popular reading. Families that owned businesses kept creating value across generations, often through more than one company.
70 percent fail
This one sounds like a separate finding. It is the same study.
James Grubman, a consultant to wealthy families, traced it in a 2022 paper titled "There is no 70% rule," published in the International Family Offices Journal. The figure was popularized by Roy Williams and Vic Preisser in their 2003 book Preparing Heirs, which said that MIT and The Economist had each found a 70 percent failure rate in wealth transfers around the world.
Grubman followed every citation to its original. The MIT reference turned out to be a 1983 article by two family business researchers that repeated Ward's three-in-ten figure without credit. There was no MIT study. The Economist article, from 2001, said that great family wealth rarely lasts past three generations and gave no percentage at all.
So 70 percent is 100 minus Ward's 30. It was then applied to family wealth in general, which Ward never studied.
Williams and Preisser did conduct their own interviews. By their own description, a large share of the people they spoke with were referred to them because a family handoff had already gone badly. A sample built that way cannot tell you how often handoffs fail.
The $10 trillion transfer
You will see $10 trillion, and sometimes $14 trillion, described as the value of the businesses baby boomers will hand over.
The $10 trillion figure is most often credited to the California Association of Business Brokers. Its article says retiring owners will sell or bequeath $10 trillion in assets held in more than 12 million private businesses over two decades. The article carries no date, names no source and gives no method. It describes itself as a rewrite of a memo from several years earlier.
The Exit Planning Institute, the trade body for exit advisors, has used both numbers. It says its 2013 owner survey pointed to a $10 trillion transfer and its 2023 survey to $14 trillion. Its reports pair the newer figure with an estimate that privately held companies are worth about $18.7 trillion and a finding that 73 percent of surveyed owners plan to exit within ten years. That is a survey answer about intentions multiplied by an estimate of value. It is a reasonable way to size an opportunity for advisors, and a loose way to predict what will change hands.
The most careful estimate we have found is from the McKinsey Institute for Economic Mobility. Its February 2026 report, The Great Ownership Transfer, projects that roughly 6 million small and midsize businesses in the United States will face an ownership change by 2035. Of those, it counts more than 1 million as realistic candidates for a sale, worth up to $5 trillion together.
When published estimates run from $5 trillion to $14 trillion, the honest statement is that the amount is very large and nobody knows it closely.
10,000 retiring every day
The source is a short Pew Research Center note from December 29, 2010. It said that roughly 10,000 baby boomers would turn 65 that day, and about 10,000 more would do so each day for the next 19 years.
Turning 65 and retiring are different events. Many owners work well past 65. The number is sound as a count of birthdays. It says nothing about how many people leave work, and less about how many companies change hands.
The numbers that hold up
The real picture is still a large one. These are the figures we use, each with its source.
A little over half of the owners of US employer businesses are 55 or older. The Census Bureau put it at 51 percent, from its Annual Business Survey.
About 6 million small and midsize businesses will face an ownership change by 2035. McKinsey Institute for Economic Mobility, February 2026.
Most small-business exits are closures. The same report found that as of 2022, 92 percent of exits were closures, 5 percent were sales and 3 percent were transfers.
A third of owners have no plan. In a Gallup survey fielded in late 2024, 33 percent of employer-business owners said they had no plan for the business or were unsure. In the same survey, 74 percent said they plan to sell or transfer ownership at some point, so the intent often arrives well before the plan.
Among family manufacturers, fewer have named a successor than a generation ago. A 2019 University of Illinois Chicago survey of Chicago-area family manufacturers found that 62 percent of responding owners had not designated one, up from 38 percent in 1989. The survey reached 89 owners, so read it as a signal from one region.
What this means for an owner
Read together, the sourced numbers tell a different story from the folklore.
The folklore says family companies are doomed and the handoff is where they fail. The record says family companies last a long time, and that a third of them stay in the family for sixty years or more.
The real risk is quieter. A great many owners intend to sell or hand off and have nothing written down. For the smallest companies, the default outcome of having no plan is that the business closes.
A plan has a legal side and a financial side, and advisors handle those well. It also has a side that is easy to leave for the last week. The customers' trust usually sits with the founder, and somebody has to decide who hears about the change first, whose voice carries the news and what the letter to customers says. We have written about how to announce new ownership to customers, about taking over the family manufacturing business and about a new owner's first 90 days. Our guide to manufacturing branding covers the wider picture.
How we checked
For each number we went to the original publication, or to a published paper that had traced it there, and read what it said. Where we could not find a method, we say so above. Where a figure rests on a small sample, we give the sample size.
We hold our own writing to this. You will not find any of the four folklore figures on this site used as a fact.
If you are an advisor and want a plain one-page guide for a client facing a handoff, get in touch and we will send it. If you are an owner or a buyer working out what your customers should hear, book a call.
Sources
John L. Ward, Keeping the Family Business Healthy. Jossey-Bass, 1987.
Josh Baron and Rob Lachenauer, "Do Most Family Businesses Really Fail by the Third Generation?" Harvard Business Review, July 19, 2021.
James Grubman, "There is no 70% rule." International Family Offices Journal, June 2022.
Thomas Zellweger, Robert Nason and Mattias Nordqvist, Family Business Review, 2012. The study Grubman describes as following business families across ventures.
Roy Williams and Vic Preisser, Preparing Heirs. 2003.
California Association of Business Brokers, "Baby Boomers: Incredible Numbers are Buying and Selling Businesses (Part 1 of 2)." Undated.
Exit Planning Institute, "A Decade of Development: 10 Findings in 10 Years of SOOR."
Pew Research Center, "Baby Boomers Retire," December 29, 2010.
McKinsey Institute for Economic Mobility, "The Great Ownership Transfer: A new era of business stewardship," February 26, 2026.
US Census Bureau, business owners' ages, from the Annual Business Survey.
Gallup, small business succession survey, fielded September 20 to October 28, 2024.
Great Cities Institute, University of Illinois Chicago, succession survey of Chicago-area family manufacturers, February 2019.
FAQ’s
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The figure comes from one 1987 study of 200 family manufacturers in Illinois. It found that about a third were still family-owned after a full second generation, which is roughly sixty years. Firms that were sold at a profit were counted the same as firms that closed. It does not describe family businesses in general.
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It is the 30 percent figure from the 1987 Illinois study, inverted. A 2003 book credited it to MIT and The Economist. A 2022 paper by James Grubman traced those citations and found that neither source contains it. There is no independent study behind the 70 percent figure.
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Nobody knows closely. The McKinsey Institute for Economic Mobility estimates that more than 1 million US businesses are realistic candidates for a sale by 2035, worth up to $5 trillion. Figures of $10 trillion and $14 trillion come from trade groups. One gives no source or method, and the other multiplies owners' stated intentions by an estimate of total company value.
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The original 2010 Pew Research Center note said that about 10,000 baby boomers would turn 65 each day for 19 years. Turning 65 is a birthday. Many people, and many business owners in particular, keep working well past it.
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The Census Bureau found 51 percent of US employer-business owners are 55 or older. McKinsey projects about 6 million small and midsize businesses facing an ownership change by 2035. Gallup found in 2024 that a third of employer-business owners have no plan or are unsure.
