MINNEAPOLIS—There would appear to be numerous opportunities for credit unions in America’s small businesses, with owners reporting they are looking for guidance in areas where many CUs have expertise, including an issue that will sound familiar—succession planning.

That’s according to U.S. Bank’s third Small Business Perspective survey report, whichsurveyed 1,000 small business owners and explored how they are navigating challenges ranging from economic stressors to the rise of generative AI, all while remaining focused on long-term growth, succession planning, and leaving a lasting legacy.

‘A Real Opportunity’

“This year’s survey makes it clear that small business owners are committed to future-proofing their businesses in response to today’s economic climate and rapid technological change,” Shruti Patel, U.S. Bank’s chief product officer for business banking, said in a statement. “From embracing generative AI to responding to shifting economic conditions like tariffs and thinking proactively about succession, owners are serious about the future of their businesses. There is a real opportunity – and responsibility – for financial institutions to show up as strategic partners in helping small businesses navigate what’s next.”

Handing Over the Reins

According to the U.S. Bank analysis, with more than half of U.S. small business owners now over age 55, succession planning is becoming increasingly urgent.

“While many owners are not yet ready to step away – with only 54% having created a succession plan – new generations are preparing to take their place: more than one-third (36%) of Gen Z and Millennial owners say they plan to acquire a business from a retiring owner,” U.S. Bank said in releasing its findings.

The Findings

Among the findings, the report reveals a striking gap between intention and action. “While 85% of surveyed participants say they originally became an owner to create something they could pass on, and 84% wanted to create generational wealth for their family, only 54% have a formal succession plan in place,” U.S. Bank said.

In addition, the survey found a growing number of owners (62%) have seen their retirement timelines accelerate in the past five years. 

“But for many, navigating succession is a challenge,” the report’s authors noted, pointing out the survey found:

• 62% find the process overwhelming
• 56% worry they won’t get a reasonable price for their business when it’s time to sell
• 53% lack the proper resources or guidance to plan for the future of their business
• Owners with strong business performance were more likely to have a succession plan in place: 64% of those with a plan reported significant growth over the past year, compared to 50% of those without a plan.

Future Plans

For credit unions looking for potential lending opportunities, the survey found 37% of small business owners say they plan to sell their business in the next 12 months, “suggesting how quickly transitions of ownership may be approaching for some businesses.”

“However, retiring business owners are not the only ones looking to sell, with a higher number of Gen Z and Millennial owners (41%) than Boomers and Gen X (33%) saying they plan to sell their business,” the survey found.

The Motivation

U.S. Bank said it found that while the small business landscape has changed dramatically over the years, the motivations that originally inspired owners still drive them today. 

“Most remain deeply committed to their work: 86% want to continue running their business as long as possible, and 87% are hopeful they’ll leave behind a positive legacy when they eventually step away,” according to the survey’s findings.

Economic Pressures

The need for small business owners to make long-term plans is reinforced by the day-to-day worries they are facing, the analysis found, with respondents reporting their top macroeconomic stressors as:

• The economic environment (98%)
• Inflation or increased costs of materials / supplies (92%)
• Competition (92%)
• The ability of consumers to maintain their spending (86%)
• Fraud or cybersecurity threats (85%)
• Obtaining enough funding to support my business (84%)
• 81% of owners felt at least somewhat stressed about tariffs.

Looking Forward

“Despite these stressors, 96% of owners reported their business as currently successful and 88% saw growth in the past year,” U.S. Bank said in its analysis. “To manage pressures and position their businesses for the future, many owners are prioritizing key steps in the year ahead, including focusing on revenue (48%), ensuring enough staff (33%), improving company efficiency and cost-effectiveness (32%), and reacting to the general economic landscape such as inflation and recession risk (29%).