How Ample Succession Planning Tips Can Help Ensure A Long Life

Helping to ensure business longevity and preparing for a smooth leadership transition are among the reasons owners of Black small businesses (SMBs) should consider succession planning.

Trimming the chance of disrupting operations, creating wealth for the next generation, and lessening the risk of closure are other factors why entrepreneurs should explore such a plan.

The need to act now instead of later is high because the lack of succession planning can impact financial security for families, disrupt wealth transfer, and prevent asset accumulation. In fact, some experts suggest business owners establish a plan several years before starting the process.

Still, succession planning is often ignored by small business owners, including Black entrepreneurs, observers say. With a business often being the largest asset for many proprietors, including family-owned businesses, it should get the same priority as increasing revenue or boosting all customer relationships to help spur and sustain growth.

Data show over 65% of small business owners plan to retire in the next two years. Without a set succession plan, a large number of these firms around for decades could disappear sooner. The data also reveal that just 30% of small businesses successfully sell, meaning 70% don’t have a buyer or an uncertain future path.

An entrepreneur and author, Karla Trotman succeeded her parents in 2020 as the owner of Electro Soft Inc. in Montgomeryville, Pennsylvania. She acquired the business that labels itself the nation’s largest Black-owned electronics manufacturing and engineering firm.

Trotman, the firm’s president and CEO, offered BLACK ENTERPRISE some tips for others contemplating business succession.

She noted that studies show that 70% of Black Americans don’t have an estate plan, let alone a business succession plan. “That means that we aren’t doing the bare minimum to handle our personal affairs upon death.”

Brian Ford, wealth management advisor with Northwestern Mutual, shared by email that when he talks with Black business owners, it’s clear that the business often represents more than just a source of income. It reflects years of effort, personal sacrifice, and pride in building something that matters.

“Succession planning gives you a way to protect everything you’ve built and make sure it continues to grow,” he says. 

A life insurance and financial services giant, Northwestern Mutual offers wealth management services that include guidance for business owners.

When a succession plan is in place, banks, clients, and suppliers gain confidence in the stability of the business, Ford says. It shows the business is well-run and focused on the future. That kind of planning supports better access to financing and smoother relationships with vendors.

Unable to find a book specifically on succession and one relatable to a company of her type and size, Trotman was prompted in 2024 to write Dark, Dirty, Dangerous: Building the Vibrant Future of Manufacturing. 

Her firm has 30 workers and a seven-figure annual revenue. 

Trotman’s book includes “breadcrumbs to allow others to take the proper steps to close the wealth gap within their families through such means as business ownership.”  She says the book shows that not planning for wealth transfer can cost families far more than planning ahead.

Trotman says she had one of the best succession planning experiences that a next-generation owner could have by working directly with her father for 11 years, including running the company for three of those years, which “provided the perfect on-ramp for me.”

She left a corporate career to become the successor. She was a new mother, and her legacy took on a new meaning for her. “Now that I am creating my succession plan, I must consider various scenarios, one of which would give my two boys the same runway of time that I had,” she says. 

With her knowledge limited at the time, she sought advice from fellow business owners who introduced her to private wealth management. “They not only manage your investments but also have a suite of services that support business owners,” she says. “It was a world I was unaware of.”

For business owners planning to pass on the baton, Trotman says family dynamics get tough with death, divorce, remarriage, and stepchildren, so make your wishes known early. Have plans to save the business. For instance, if the owner dies unexpectedly, does the family have sufficient funds to pay the taxes and navigate the costly probate process? Determine if the firm will be sold to a buyer who does not see it as an emergency sale and does not offer full value. Will the business have to close?

If you have multiple children, Trotman advises doing an assessment to see who is best suited to run the company. “The wrong person can easily destroy the business and its value,” she says. Be mindful that the owner may be too deeply embedded in the company’s processes. That shows the company is overly reliant on the owner, and new processes need to be developed.”

Trotman’s bottom line: “The family legacy will end without proper planning.  The process is not intuitive, and the risk of failure is high.”

Ford stressed that legacy carries a deep meaning for a lot of the Black entrepreneurs he works with. “It’s about making sure that the values behind the business continue to shape the future. A good plan supports that vision in a clear and practical way.”

And because succession touches so many areas, he says working with the right advisors is key.

“A financial advisor can help bring together the legal, tax, and financial pieces so the plan works when it’s needed,” Ford adds. “That kind of support helps keep the business strong and prepares the next leader to succeed.”

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