The $3 Trillion Opportunity for Black Entrepreneurs in Business Transfer
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Source: CNBC
- Business Transfer Opportunity: According to McKinsey, an estimated 6 million small and medium-sized businesses will be available for acquisition by 2035, presenting Black, Latino, and women entrepreneurs with a potential $3 trillion wealth increase, which could significantly improve wealth disparities if successfully transferred.
- Participation and Wealth Gap: Currently, only 3% of U.S. business owners are Black, but if Black entrepreneurs increase their participation in the business transfer, they could capture $369 billion of enterprise value, highlighting the critical importance of engagement to avoid exacerbating wealth inequality.
- Financing and Opportunity Access: While funding support for Black and minority communities in venture capital and acquisitions has increased, overcoming challenges in financing and deal flow is essential, as understanding the dynamics of acquiring existing businesses versus starting new ones is crucial for effectively leveraging capital.
- AI Impact: McKinsey notes that the potential of AI will further enhance business acquisition opportunities, particularly in labor-intensive sectors like retail, restaurants, and healthcare, as AI can help entrepreneurs better understand industries and potentially narrow wealth and ownership gaps, driving more efficient business operations.
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Analyst Views on JPM
Wall Street analysts forecast JPM stock price to rise
19 Analyst Rating
11 Buy
7 Hold
1 Sell
Moderate Buy
Current: 297.300
Low
260.00
Averages
341.38
High
400.00
Current: 297.300
Low
260.00
Averages
341.38
High
400.00
About JPM
JPMorgan Chase & Co. is a financial holding company. The Company is engaged in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing and asset management. The Company operates through three segments: Consumer & Community Banking (CCB), Commercial & Investment Bank (CIB), and Asset & Wealth Management (AWM). Its CCB segment offers products and services to consumers and small businesses through bank branches, ATMs, digital and telephone banking. Its CIB segment consists of banking and payments and markets and securities services, and offers a suite of investment banking, lending, payments, market-making, financing, custody and securities products and services to a global base of corporate and institutional clients. AWM segment offers investment and wealth management solutions. It offers multi-asset investment management solutions, retirement products and services, brokerage, custody, estate planning, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Participation and Wealth Gap: Currently, only 3% of U.S. business owners are Black, but if Black entrepreneurs increase their participation in the business transfer, they could capture $369 billion of enterprise value, highlighting the critical importance of engagement to avoid exacerbating wealth inequality.
- Financing and Opportunity Access: While funding support for Black and minority communities in venture capital and acquisitions has increased, overcoming challenges in financing and deal flow is essential, as understanding the dynamics of acquiring existing businesses versus starting new ones is crucial for effectively leveraging capital.
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- Significant Sales Growth: The brand achieved a year-over-year growth rate of 35.9%, significantly outpacing the category's 8.8% growth, with meat stick sales rising by 57.7%, securing the fifth position in the category and contributing to an overall market growth of 15.6%.
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See More
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- Productivity Gains: CFO Jeremy Barnum reported that use cases for generative AI have doubled this year, particularly in customer service and technology areas, which not only improved software engineers' productivity but also reduced costs associated with fraud management, highlighting the positive effects of technology deployment.
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See More
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- Participation and Wealth Gap: Currently, only 3% of U.S. business owners are Black, but if Black entrepreneurs increase their participation in the business transfer, they could capture $369 billion of enterprise value, highlighting the critical importance of engagement to avoid exacerbating wealth inequality.
- Financing and Opportunity Access: While funding support for Black and minority communities in venture capital and acquisitions has increased, overcoming challenges in financing and deal flow is essential, as understanding the dynamics of acquiring existing businesses versus starting new ones is crucial for effectively leveraging capital.
- AI Impact: McKinsey notes that the potential of AI will further enhance business acquisition opportunities, particularly in labor-intensive sectors like retail, restaurants, and healthcare, as AI can help entrepreneurs better understand industries and potentially narrow wealth and ownership gaps, driving more efficient business operations.
See More
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- AI Partnership Opportunities: Despite TCS's collaboration with OpenAI and Infosys's partnership with Anthropic being seen as opportunities for AI adoption, the market response has been tepid, with the Nifty IT index down 19.6%, indicating worries about the rapid advancements in AI's impact on the sector.
- Revenue Model Shift: Traditional IT service companies like TCS and Infosys primarily generate revenue from IT service integration, and with the rise of AI, they are expected to face challenges of margin compression, as industry experts note that AI will transform the business models of IT service firms.
- Uncertain Future Outlook: Jefferies has cut price targets for Indian IT companies by up to 33% and downgraded most large firms to hold or underperform, as investors remain skeptical about whether AI will truly benefit IT services companies, potentially leading to increased stock price volatility in the future.
See More
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See More
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- Internal AI Deployment: Dimon noted that JPMorgan is already deploying AI across its operations, with about 150,000 employees using a large language model weekly; while automation may reduce staffing needs over the next five years, the company remains focused on retraining and redeploying workers.
- Gradual Technological Change: He emphasized that technological advances should be phased in to avoid economic shocks and indicated support for policies that encourage workforce retraining, stressing the need for society to prepare for rapid changes.
- Warnings from Industry Leaders: Other industry leaders have also warned that rapid advances in AI are reshaping global labor markets and could significantly impact jobs across sectors, particularly in computer-related roles, with traditional job titles likely evolving as automation expands.
See More
