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Intergenerational Wealth and the Black Community

by | Mar 1, 2022

The Black Community is experiencing a wave of entrepreneurial spirit, brought on by the pandemic and various social issues over the past 2 years. This is underscored by a sense of empowerment, fuelled by the possibility of easier access to capital to bring great business ideas to life.  Improved intergenerational wealth for our community could be the biggest winner from this wave of entrepreneurial spirit, and the silver lining to these very tough 2+ years. Because entrepreneurs through their establishment of successful businesses that create jobs, are best positioned to build real wealth for transfer to the next generation.

Intergenerational wealth refers to the process of passing (or selling) profitable businesses and investments by one generation to the next.

This may be achieved when Black entrepreneurs:

    1. Through proper planning and capital, create viable and sellable (valuable) businesses and investments.
    2. Then sell or transfer these businesses and investments to their children.
    3. And the children, through proper planning and capital, grow their inheritance into even more profitable businesses and investments, which they transfer or sell to their children.
    4. And the process repeats with each passing generation.

Community Impact?

Each viable business, when successfully sold (or transferred to the next generation), will grow the wealth of the Black Community, by:

    1. Saving and creating jobs.
    2. Creating wealth for the employees of the businesses.
    3. Attracting new investments and financing from outside the Community.

It is worth emphasizing that the success of Black businesses will create the environment for increased funding from inside and outside of the Community. Because viable businesses attract more banks, angel investors and venture capitalists.

What are the key building blocks to achieve intergenerational wealth?

Creating intergenerational wealth starts with a plan. A plan that puts in motion actions to achieve the following:

    1. A viable and valuable business.
    2. External and internal financing to fund scaling.
    3. Tax efficiencies & exemptions.
    4. A higher selling price for the business.
    5. Wealth preservation and growth for Black families and the Community.

How do we achieve a viable and valuable business?

Black business owners will need to change their mindsets to where they each seek to:

    1. “Begin (or start looking at) their business with the end in mind” ~ Stephen Covey; &
    2. “Build their business to last” ~ Jim Collins

Begin with the end in mind

If achieving a high selling price for the business or creating a profitable entity to transfer to the children is the goal, why not start planning for it today?

  • How much money do you wish to receive for the business in 5, 10, or 15 years?
  • Will this be sufficient for your retirement?
  • Will there be enough money left to set up your children and your grandchildren for success in their future endeavours?

Build it to last

Building the business to last puts it on a path of resiliency, sustainability, profitability, and scalability.

We achieve this through strategies deliberately developed and implemented to drive up the business value. Specifically, actions to:

  • Generate profits through more efficiencies and increased sales, &
  • Create a turnkey and self-sufficient operation capable of operating independently of the owner.

What’s at stake if we don’t build Intergenerational Wealth?

Every Black owned business that fails, irrespective of their size, negatively impact the wealth of the family, the community and economy. Take the hypothetical example of a very successful Caribbean business, employing 50 well paid mostly Black staff, suddenly discontinued, because the CEO died or resigned for health reasons. The failure occurred because nothing was put in place to make sure the business is passed on to a successor (or buyer) who would carry on the business in a manner that continues to meet and exceed the expectations of the loyal customers. Losing the business meant millions in lost revenues to the country’s economy and the loss of 50 Jobs! This business failure not just reduced the wealth of the owner’s family, but also that of 50 other families. And the jobs these staff will eventuallysecure will be at the expense of other unemployed individuals (who invariably are Black)!

The same will be true should another Black business fail because the owner had no succession or exit plan.


“Black business owners must strive to be the inspiration they seek”.

The ability to create intergenerational wealth is the main contributor to the wealth gap among races. And the main reason Black wealth lags behind the wealth of other races. The Black Community will start closing the gap when most Black business owners develop the conviction, perseverance, resiliency, and patience to navigate the 5, 10 or 20+ years required to build intergenerational wealth.

Plan, Execute, Improve, & Repeat, needs to be the Black business mantra. The entrepreneurial spirit in the Community needs to be nurtured and continuously reinforced, through the combined efforts of community leaders, NGO’s, corporations, and politicians to create the right infrastructure or ecosystem to make key resources accessible to existing and aspiring small business owners. And most importantly, make the successful business owners an inspiration and mentors to aspiring Black business owners.

Truly a Win-Win.

Effectuation Optimum Inc. develops strategies for business owners to help them realize their goal of creating profitable businesses and transferring their wealth to the next generation. Business owners who opt to partner with a professional will position themselves to systematically overcome the various obstacles starting, growing & exiting one’s business may present.

To learn more about how Effectuation Optimum Inc.’s Business Growth Planning & Exit Solutions could positively impact you realizing Intergenerational Wealth, please connect with Errol Whittle for a FREE 30-minute no obligation consultation.