Tsunami threatening Black business legacies

August is National Black Business Month, a time to salute the nation’s nearly 195,000 Black-owned employer firms that pump more than $211 billion into the U.S. economy and keep 1.6 million people working. Yet behind the confetti is a looming demographic crisis that could erase generations of hard-won progress.

More than half of all privately held companies with employees are led by owners age 55 or older. As these baby-boom entrepreneurs eye retirement, an estimated 2.3 million small businesses—many of them barber shops, HVAC contractors, beauty-supply stores, and neighborhood print houses—have no clear successor. One recent study warns that one in six American jobs could evaporate if those firms simply close their doors.

A new Gallup survey underscores how fragile the moment is: roughly half of U.S. business owners either expect to shut down or have no succession plan whatsoever. For Black founders—who already navigate capital gaps and limited advisory networks—the stakes are even higher. Every unplanned closure means lost community wealth, fewer role-model employers, and vacant storefronts that once anchored Main Street.

Why Succession Stalls

• Capital constraints. Historic lending disparities make financing buyouts or management purchases harder.

• Knowledge gaps. Acronyms like ESOP or EOT sound like alphabet soup when trusted advisers are scarce.

• Emotional weight. Letting go can feel like selling the family’s identity.

Paths Forward

Early valuation & estate planning. Bringing in a CPA and estate attorney by age 50 helps avoid fire-sale pricing and tax shocks.

Employee-ownership conversions. ESOPs, worker co-ops, or Employee Ownership Trusts turn staff into stewards. Employee-owners enjoy 92 percent higher median household wealth than their peers.

Seller financing. Owner-financed notes keep cash flowing to retirees while lowering a buyer’s bank debt.

Community buy-ins. Partnerships with CDFIs, revenue-based investors, or local crowd-funds spread risk and keep ownership local.

First-Step Checklist

1. Document every key process—from payroll to supplier contacts.

2. Identify at least two potential successors inside or outside the firm.

3. Consult a succession adviser within 90 days.

4. Educate family members on the company’s mission, numbers, and legacy goals.

Our elders built businesses that doubled as informal banks, safe havens, and launchpads for tomorrow’s CEOs. Preserving those enterprises isn’t nostalgia—it’s an economic imperative. During Black Business Month, let’s hand the next generation more than stories. Let’s hand them the deed.

Have questions about safeguarding your own company’s legacy? Reach me at [email protected] to schedule a strategy consultation.