While the 2012 economic Census data have not yet been released, I am certain we will see another increase in the number of Black-owned businesses over the past five years.  As a matter of fact, Black business start-ups increased at the highest rate during the previous five-year census period. It’s great that we are going into business, but it is shortsighted for us to stop there and celebrate just the number of businesses and overlook the growth of those businesses. Understanding that most small businesses go out of business in a few years, it is vital that we concentrate on growing the businesses we have as opposed to merely counting them.

A closer look at 2007 census data will indicate that of the nearly two million Black-owned businesses, only 106,566 had employees; the total number of employees is 909,552, not all of whom are Black, of course, with an annual payroll of just more than $23 million.  Please take a moment and juxtapose those stats against the $1 trillion annual income of Black people in this country, and then analyze the information relative to our population size and the percentage of Black businesses that are sole proprietorships

One-person businesses are not inherently bad; don’t get me wrong. However, the problem with approximately 5 percent of Black-owned businesses having employees indicates a dearth in business growth within our ranks. With that same scenario being repeated from census to census Black economic empowerment via the very engine that moves this nation and the world—business—will never be achieved. That is a prescription for falling even further behind, especially when you consider the realignment of geopolitical power and influence; Black businesses must not only be started, they must be grown to a scale that hire more people and increases their value proposition.

We have heard and continue to hear the litany of excuses and reasons for why our businesses are in the shape they are in and, believe me, I know most of or all of them.  I understand the history connected to our businesses and how they were excluded from the general marketplace and how they have been discriminated against by lenders and equity funds. I know we had to take nontraditional steps to establish our businesses, and we did pretty well at it, in spite of the treatment we received and the government actions that inhibited us.

The main question now is, “How can we make the appropriate changes necessary to attain business growth in today’s economy, which is the measurement of business success?” Several come to mind. Equity Funds specifically earmarked for Black businesses and lending programs are the two most cited answers to the problem.  Equal access to capital by traditional credit organizations and consumer support are also mentioned quite frequently.  There are other creative ways to provide an influx of capital to Black-owned businesses, but there are also a few caveats that include the responsibility of the business owner to take care of his or her business by providing great customer service, operating an ethical business, properly managing their finances, staying informed and educated about their particular business field, providing good quality products and services, adding value to their customer base, and simply doing what they say they will do, i.e. showing up on time, and charging a fair price for their goods and services. Notice I said “fair,” not “cheap.”
In the vein of being informed, educated, and honest business owners and since capital is nearly always the issue that prohibits business growth, let’s look at what Leonard Greenhalgh and James Lowery say in their book, Minority Business Success, about access to capital:

“Increasing access to capital without making sure the money will generate long-term revenue streams amounts to ‘throwing money at the problem,’ and we have squandered billions of dollars demonstrating how ineffective that tactic is. The emphasis needs to be on development of minority businesses, of which capitalization is just one element. Successful development involves a comprehensive integrated set of interventions. Piecemeal solutions have never worked and will never work. That is why our efforts need to be refocused.”

They were absolutely correct in their assessment and recommendations, and I invite you to get a copy of their book to see the entirety of their presentation on business growth.  Yes, we definitely need to refocus from how many businesses we have to how much they have grown.  Take the lessons of successful Black-owned businesses operating today; learn from them and mimic them as much as possible.

So let’s spend a little less time complaining and more time building our businesses with tried and true strategies and positive traits of great entrepreneurs—Black and any other color; because the main color in business is green.

by James Clingman
by James Clingman

Jim Clingman, founder of the Greater Cincinnati African American Chamber of Commerce, is the nation’s most prolific writer on economic empowerment for Black people. He is an adjunct professor at the University of Cincinnati and can be reached through his Web site,

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