The United States business sector is dominated by small businesses that create new jobs at a rate considered faster than that of their larger competitors. Remarkably, military veterans own nearly 13 percent of small businesses. However, only eight percent of all veteran-owned firms are minority owned. The low percentage of minority-owned veteran businesses is perplexing given that minority veteran business owners have much higher rates of educational attainment than do non-minority veterans.
Although veteran entrepreneurs have contributed significantly to the U.S. economy, this positive economic impact is in jeopardy as nearly 75 percent of veteran business managers are nearing retirement, part of a larger trend called the “silver tsunami.” Furthermore, a study by the National Bureau of Economic Research reported a drop of 41 percent and 32 percent, respectively, in African American businesses and Hispanic businesses due to the COVID-19 pandemic from February 2020 to April 2020.
The inability to ensure the business continuity of these minority-owned firms will mean that the wealth built up over their decades of hard work could be lost. Moreover, the jobs and economic activity that these businesses represent in their communities could be at risk, thus exacerbating the racial wealth gap. Having a viable business succession strategy in place will be critically important to ensure the financial well-being of these business owners, their families, employees, and the local communities where these businesses are located.