ABSTRACT. Using data from the 2003 and 2005 National Minority Business Owners Surveys (NMBOS), this study profiles succession planning and examines the effect of ethnicity on succession planning in small family firms. The evidence suggests that only about 25 percent of family firms in the sample would transfer their firms to their children or other family members. The results of logistic regression analyses show that ethnic background had a statistically significant effect on succession planning, indicating that African-American and Mexican-American small business owners (but not Korean-American) were more likely to have succession planning than were White business owners. The findings highlight the importance of cultural awareness for professional advisors and educators who assist business owners in developing succession plans. Implications for professional consultants of small family businesses and directions for further research in this area are discussed. pp. 71–93

Keywords: business succession; culture; minority-owned family firms; succession planning
JEL codes: D19; L22; L26; M12; M14