UBS Executive Sheila Simmons – Advice for Black Entrepreneurs to Help Close the Wealth Gap and Exit Planning

Since the two very tragic killings of George Floyd and Breonna Taylor, the world has fully embraced the celebration of Juneteenth, which is “an annual federal holiday commemorating the end of slavery in the United States,” said the New York Times. At this time, it’s important to celebrate the achievements of African Americans and their many contributions to our society, especially in business. However, it’s also an important moment to address the paramount issue that African American families have faced since emancipation — closing the wealth gap that has remained stagnant for over 70 years.

According to MSNBC, “the average Black family’s wealth in the United States is only one-tenth of that of a white family.” The problem also has its roots in Black entrepreneurship, which is a key vehicle for closing the wealth gap as ownership is critical to the upward mobility of this community. For minority business owners, specifically those who are Black, having access to resources and exit planning advice are integral to building a successful business.

Taking the first step — obtaining your Minority Business Enterprise (MBE) status

As part of the fight to close the wealth gap, organizations like the National Minority Supplier Development Council (NMSDC), have a myriad of programs available to its members to help drive revenue growth and strategic partnerships.

Becoming MBE certified has countless benefits, and the following are a few important ones to consider:

– Access and networking — MBEs have exposure to 13,000 other MBEs to engage in business opportunities and the ability to form partnering relationships, strategic alliances or joint ventures for success.

– Business opportunity fairs — The largest U.S. conferences focused on minority business development, MBEs present themselves to hundreds of prospective buyers, government agencies and procurement professionals in a single setting.

– Contract Opportunities — NMSDC facilitates business connections between buying agencies and MBEs, which sets the foundation for future partnering and business opportunities.

Start thinking about your exit early

It may seem counterintuitive to consider exit planning when you’re starting your business. However, it’s highly recommended that when a business owner starts their business, they should do so with the end in mind. Engaging Certified Exit Planning Advisors (CEPA) can help you early in your business cycle to establish a well thought out exit strategy — a blueprint for selling your company for maximum benefit — while also taking advantage of potential opportunities along the way.

For example, while obtaining MBE status is great for growing the business, it does add complexity when it’s time to sell your company. Here’s what a CEPA will tell you: if the acquiring entity is not MBE certified, the current entity (with its new owners) will lose its MBE status. If you had contracts that were specifically earmarked for an MBE enterprise, the new entity would lose these contracts. Therefore, the new owner may not include those contracts at full value and recognize what the firm is truly worth.

CEPAs are part of a highly specialized group of business advisors who are trained in aiding clients grow, preserve, and transfer business wealth by helping owners and their families successfully plan and execute ownership transitions. They provide business owner clients with real guidance as they begin to consider exiting their companies and shifting their wealth on to their personal balance sheet.

Exit planning is complex, but it’s seemingly more complex for minority-owned businesses. As many minority business owners face an extra set of complexities, it’s essential for these important entrepreneurs to remain open-minded, explore each of the exit strategies, and marry their goals and objectives to the strategy that best solves for such. This helps to remove any bias towards one exit strategy over another and makes it easier to make a fully informed decision that can impact not only the health of your business, but also your legacy.

By becoming part of the minority business community and engaging with trusted advisors, black entrepreneurs find the financial resources and footing to build their companies for success. These steps will help eventually close the wealth gap, by building greater ownership that sets the entire African American community on the road to greater financial freedom.

About the author

Early in her wealth management career, after earning the hearts of minds of several successful business owners who experienced significant liquidity events, Sheila Simmons knew very quickly that this was the client segment she wanted to advise. As she continued to deepen her knowledge and understanding of the needs and issues that business owners are faced with, she decided to obtain her CEPA designation (Certified Exit Planning Advisor).

As a CEPA, Sheila is part of an elite group of business advisers who are trained in aiding clients grow, preserve, and transfer business wealth by helping owners and their families successfully plan and execute ownership transition. Her passion continues to grow as she realizes that many of her business owner clients need real guidance as they begin to consider exiting their companies and shifting their wealth onto their personal balance sheet. As a result, she has dedicated her career to becoming the trusted advisor to business owners and their families. She also holds FINRA Series Seven and Series 66 registrations along with life, health, and annuity insurance licenses.

Today, as a credentialed partner of the Executive Wealth Partners team, Sheila continues to work closely with business owners and their outside professional advisors i.e.; CPA, attorney, et al. With close to 20 years of experience in the financial industry, she and her team are qualified to assist clients with business succession planning, estate and retirement planning, asset allocation, complex lending solutions, insurance solutions, and tax strategy.

Not only is Sheila a professional, she is also a mother to one son, Tommy, 16. Her personal interests include traveling, fishing, swimming, home décor, and experiencing amazing food. She also sits on various boards including, the Cincinnati Parks Foundation and the Family Nurture Center. She received her B.A. from the University of Cincinnati and is currently a candidate for her MBA at Xavier University.

Sheila Simmons is Vice President and Financial Advisor with the Executive Wealth Partners at UBS. She is a certified exit planner (CEPA) and advises business owners and their outside professional advisors on when to consider exiting their companies and financial decision-making. She has dedicated her career to becoming the trusted advisor to business owners and their families. Simmons also holds FINRA Series 7 and Series 66 registrations along with life, health, and annuity insurance licenses. She can be reached at sheila.simmons@ubs.com.