3 Ways AI Will Have Exponential Impacts on SMBs (A $10 Trillion Transfer of Business value)
TL;DR
An estimated $10 trillion worth of businesses will change hands over the next decade as Baby Boomers retire, creating an unprecedented opportunity for new buyers.
AI implementation in acquired businesses can increase EBITDA by 31-57%, dramatically improving ROI for acquirers.
Modern acquisition strategies paired with AI automation offer a faster path to business ownership with higher upside potential than traditional entrepreneurship.
The Great Business Transition: A Once-in-a-Generation Opportunity
We are standing at the precipice of the largest transfer of business ownership in history. Globally, an estimated $10 trillion worth of businesses will change hands over the next decade as Baby Boomers exit their companies and head into retirement.
Approximately 4.5 million businesses will transition over the next 10 years. This is a seismic shift, creating unprecedented opportunities for aspiring business owners, especially those interested in technology and modernization.
Traditionally, entrepreneurship meant building from scratch—an approach filled with risk, long timelines, and uncertainty.
Today, savvy entrepreneurs are recognizing that acquiring an existing business offers a dramatically different equation: established cash flow, existing customers, proven business models, and, most importantly, opportunities for value creation through modernization and optimization.
For the tech-empowered . . operations competent buyer . .
this isn't just about maintaining the status quo—it's about application of artificial intelligence and automation to dramatically enhance profitability . . . capacity . . and thus—scalability.
Why AI Is the Secret Weapon for SMB Acquirers
In 2025, artificial intelligence has evolved from a buzzword into a critical business lever, especially for small-to-medium sized businesses.
The impact on operational performance and profitability can be staggering—recent studies show that GenAI implementation can increase EBITDA by 31-57% for typical service providers.
This isn't incremental improvement;
it's transformational change that can turn a good acquisition into a great one.
Customer Experience Personalization
Today's businesses compete primarily on customer experience. AI enables even small businesses to offer enterprise-grade personalization by analyzing customer behavior, purchase history, and engagement patterns.
AI Customer Support Assistants: Chat Interfaces
AI-powered chatbots provide 24/7 customer support, answering inquiries and resolving issues without additional staffing costs, while recommendation engines enhance cross-selling and upselling opportunities.
For a business acquirer, this means the ability to immediately enhance customer relationships and revenue without significant headcount increases—a direct path to improving margins from day one.
Operational Efficiency Through Automation
The most immediate impact of AI implementation often comes through operational streamlining.
Notably, AI tools can:
Optimize inventory management using predictive analytics to forecast demand
Automate staff scheduling to ensure coverage during peak times while minimizing labor costs
Extract, organize, and process data from invoices, contracts, and forms, reducing manual workload
These efficiencies directly impact the bottom line, often providing returns that far exceed the investment in AI implementation.
For business acquirers . . . this means the ability to increase profitability without necessarily increasing prices or sales volume . . which is a massively powerful lever for enhancing business valuation post-acquisition.
Sales Enablement and Revenue Growth
Beyond cost savings, AI tools provide significant revenue enhancement capabilities.
Current AI-powered sales enablement tools can perform the following with expert-level competence:
Score leads to determine which prospects are most likely to convert
Forecast sales with greater accuracy to improve planning and decision-making
Automate customer relationship management tasks like follow-ups and data entry
For business buyers, this means the ability to accelerate revenue growth without proportional increases in sales headcount—a critical factor in scaling an acquired business quickly and efficiently.
The Demographic Shift: Who's Selling and Who's Buying
Sellers (The Supply side)
The supply side of this equation is largely driven by demographic inevitability.
For instance, in Australia . . over 50% of businesses are owned by people over the age of 50 . . . with many of them planning to exit within the next few years.
Around 70% of small businesses will likely change hands in the next 10-15 years through sale or succession.
Buyers (The Buy side)
On the buying side . . a new breed of entrepreneurs is emerging: millennials and Gen Z individuals who are choosing to buy established businesses rather than starting from scratch.
For smart buyers like these . . acquiring an existing business offers several advantages:
Established customer bases and brand recognition
Operational systems already in place (best case scenario)
Quicker route to profitability compared to startups
The intersection of these demographic trends creates a uniquely favorable market for buyers with tech skills . .
operational competence . .
and an understanding of how to leverage AI and automation to give traditional businesses capabilities they’ve never had before.
The New M&A Playbook: Identify, Acquire, Transform
For aspiring business owners looking to capitalize on this opportunity . .
a new playbook is emerging—one that focuses not just on acquisition . .
but on post-acquisition transformation through technology.
Step 1: Target Selection
Look beyond traditional valuation metrics to identify businesses with high potential for AI-driven improvement.
Key indicators include:
Labor-intensive operations (that could benefit from automation)
Rich customer data (that isn't being fully leveraged)
Manual sales processes (ripe for AI enhancement)
Industries traditionally slow to adopt modern technology (Examples: Legal services, real estate, construction etc)
These businesses often represent hidden gems—solid operations with good fundamentals that can be dramatically improved through technological modernization.
Step 2: Due Diligence (with a Technology Lens)
Traditional due diligence focuses on financials . . legal compliance . . and operational fundamentals.
The modern acquirer adds another layer: technology readiness assessment.
This includes evaluating:
Existing tech infrastructure (and its adaptability)
Data quality and accessibility
Potential quick wins through simple automation (What’s the low hanging fruit?)
Estimated ROI on specific AI implementations (Can it be quantified? Measured?)
This tech-focused due diligence helps buyers precisely quantify the upside potential of technological transformation, allowing for more accurate valuation and stronger negotiating positions.
Step 3: Implement the AI Transformation
Post-acquisition . .
Successful buyers implement with a roadmap:
Start with high-impact, low-complexity applications—often in customer service or basic operational automation
Capture and analyze performance data (demonstrate quick wins)
Reinvest savings (Add more sophisticated AI implementations)
Gradually build an integrated, AI-enhanced operational ecosystem
This graduated approach delivers continuous improvement while managing change effectively—a critical consideration when transforming established businesses with long-standing practices.
Real-World Success: AI Transformation in Action
Consider the following case study of a traditional family-owned retail business—acquired by a tech-savvy buyer:
Before acquisition, the business had steady but flat earnings, with profit margins (EBITDA) approximately 12%.
Within 18 months of implementing AI-driven inventory management . . . customer personalization . . . and automated marketing . .
Margins increased to 19% (a 58% improvement in profitability).
But this transformation story isn't unique.
Across various industries . .
from professional services to hospitality . . new owners are leveraging AI to dramatically improve the performance of acquired businesses:
Professional Services Example: A small accounting firm automates data entry and tax preparation so they can focus on strategic client advice and scale operations without increasing headcount.
Hospitality Example: A family-owned hotel chain uses AI to implement dynamic pricing by analyzing booking trends and high occupancy rates.
Conclusion: The Window of Opportunity
In short . .
The convergence of mass business ownership transition + AI technology advancement creates a unique opportunity for aspiring business owners.
Those who can identify suitable acquisition targets and implement effective AI transformation strategies stand to benefit enormously over the next decade.
However, this window won't remain open indefinitely.
As awareness of AI's transformative potential grows . .
Competition for acquisitions will increase . .
and valuation models will begin to price in automation potential. The greatest opportunities exist for early movers who can acquire businesses before this valuation shift occurs fully.
For those positioning themselves at this cross-roads of business acquisition and tech transformation . .
The next decade should offer a once in a generation opportunity for wealth creation and business success.
The $10 trillion transfer of business assets represents not just businesses changing hands . . . but the modernization of an entire segment of the economy.
Want to be part of the transformation?
Apply to our AI Operator Incubator today to learn how to identify, acquire, and transform businesses using cutting-edge AI technology.
You’ll get a playbook, tools, and support network. hope to see you in there.