Dana Cornell flags exit planning gap for business owners

Former Morgan Stanley executive Dana Cornell says many business owners are heading into sales without a tax plan or a strategy to replace lost income. His warning comes as McKinsey projects 6 million U.S. businesses will change hands by 2035, creating a major wealth transfer challenge.

Why it matters: - Millions of U.S. businesses are expected to change hands by 2035, creating one of the largest ownership transitions in years. - Cornell says many owners risk selling a business without planning for the tax bill or the income the business used to provide. - The gap matters most for owners who have spent years building value but have not built a personal transition plan.

What happened: - Dana Cornell, founder of Cornell Capital Holdings and a former Morgan Stanley executive director, raised the warning in an interview on the Capability Amplifier podcast. - The podcast is hosted by Mike Koenigs and Dan Sullivan of Strategic Coach®. - Cornell said business owners often reach a sale without a plan for taxes or post-sale income replacement.

The details: - A February 2026 McKinsey Institute for Economic Mobility analysis projects 6 million small and medium-sized businesses will face ownership transitions by 2035. - McKinsey estimates those transitions represent about $5 trillion in enterprise value. - More than half of small-business owners are over age 55, and one in four is 65 or older. - The Exit Planning Institute says fewer than one in three owners have a documented exit plan. - A 2025 Gallup survey found 27% of employer firms with owners 55 and older are unsure of their long-term plan or intend to close permanently. - Cornell said he built his practice by knocking on doors in western New York in late 2007 and working through the 2008 financial crisis. - Cornell later rose to executive director at Morgan Stanley and moved into the firm’s advanced planning division. - Morgan Stanley’s advanced planning division served families with $50 million or more in liquid net worth. - Cornell left Morgan Stanley in 2021 and founded Cornell Capital Holdings in Olean, New York. - Cornell said the planning approach for ultra-wealthy clients is structurally different from what the firm delivered to clients below that threshold. - Cornell Capital Holdings works with owners and executives between $3 million and $50 million in liquid net worth. - The firm’s process has four stages: reducing tax exposure, structuring investments to produce current income, protecting against long-term care and longevity risk, and transferring the estate. - Cornell said the firm coordinates with a client’s accountant, attorney and insurance professionals instead of replacing them. - Cornell said a client selling a $6 million business told him he did not know how he would replace his income after taxes. - Cornell said a different family selling for $125 million was walked through tax mitigation and an income-first approach by a team of eight advisors.

Between the lines: - Cornell’s critique points to a divide between selling a business and fully exiting a personal financial life tied to that business. - The issue is not only tax minimization. It is also preserving cash flow, protecting against long-term care risk and organizing estate transfer. - Cornell’s comment suggests many owners may have enough transaction expertise to close a deal but not enough personal planning support to manage what comes after. - Mike Koenigs said founders can make expensive investment mistakes by assuming business judgment automatically translates to personal balance-sheet decisions.

What’s next: - Cornell Capital Holdings offers a financial diagnostic that reviews tax position, investment structure, protection coverage and estate documents. - The firm also offers an abbreviated online version called the Wealth Freedom Index at cchquiz.com. - More information is available at Cornell Capital Holdings. - Cornell Capital Holdings and the Capability Amplifier podcast each point to more owner education around exit readiness and post-sale planning.

The bottom line: - As a wave of owner transitions approaches, Cornell says the biggest risk is not finding a buyer. It is failing to plan for life after the sale.