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Minority Business in the 21st Century
Since the population of people of color is growing faster than the overall population, it makes sense that minority businesses will grow faster as well.
Growth takes partnership, nurturing, and it takes access to capital like we haven't ever had before. Some say it will take an entire new agenda, a partnership between government, between corporations and even among minority businesses themselves to ensure this growth, but growth must happen.
It would be a shame if this minority business boom turned into a bust, because we haven't paid attention.
In order for us to have a vibrant national economy, you've got to have vibrancy in our minority owned businesses.
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Minority business at a glance:
Statistics & trends
Quick Questions
Access to capital
Success Stories
Tips and Advice
Statistics & trends
If the revenue for the entire black enterprise 100 were combined, they'd reach a little over 12 billion dollars, making them number 163 or 164 on the fortune 500 list.
People of color have 1.8 trillion dollars in buying power—21% of our nation's spending.
Just 15 percent of minority businesses have employees. Between 74% and 85% of minority businesses, particularly african-american businesses, are one person businesses.
Fewer than 200,000 minority owned businesses have half a million dollars or more in revenues.
Minorities represent about 30% plus of the population, yet receive about a percent and a half of all of the available private equity dollars
Every five years the minority business development agency issues data on the status of minority business.
The report that was released in july of 2005 covered the five years
Between 1997 and 2002 and showed tremendous growth in minority business development.
- Black-owned businesses grew by 45%
- Hispanic owned businessesgrew by 31 %
- Asian owned businesses grew by 20 %
Some of the growth seemed phenomenal, because it came from
Such a small base. People of color represent just under 30 percent of the population, but fewer than 18 percent of our nation's entrepreneurs.
The data are exciting because they show the keen interest that people of color have in participating in our economy. But even as we celebrate the growth in minority business, we have to be concerned about continuing disparities.
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Quick Questions
Why the disparities?
“There's still corporations who believe as long as people of color. Are buying their records, or buying their sneakers, that they’re cool. They don't really need to do anything beyond that. And while more and more industries have developed supplier diversity programs and minority supplier programs, there's still whole industries out there that haven't seen the need. So you're still as a supplier, as a minority supplier, in the position of trying to convince buyers who very often don't look like you, that your company can produce the same product, or quality product at a decent price and so on. So there's still that resistance in the market place.”
- Harriet Michel, president of national minority supplier development council.
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What does it take for a minority business to expand and compete in the 21st century?
Partnering is key.
“Team up with larger businesses that have a capacity or capability that you don't have in your own firm. Sometimes, as a small business, you might have access to a market that a large business would want, so that's another way that you can sell yourself. So be creative and look for opportunities and don't be afraid to go into a business and go after a small contract. Because once you get your foot in the door, you can show some of the things that you can do. And you can grow that contract from there."
- Elizabeth Lisboa Farrow, President and CEO of Lisboa, inc.
Access to capital
Many firms owned by people of color have problems with access to capital. People can't get the loans they need to grow. People are financing their business through their credit cards, or their mortgages. How do we break through the issue of getting money to grow a business?
Click here to see/hear what our expert panel has to say.
Success Stories
Growth in a non-traditional industry
Jim Lowery and Richard Holland of the Boston Consulting Group have just produced a report that talks about new ways to grow minority business.
They suggest among other things that minority businesses should concentrate on a high growth industries instead of the customary food, retail and service establishments.
Meet a young african american couple that has a booming non-traditional business gaining contracts and accolades because of their professionalism and savvy.
Click here for wirespan profile in streaming video….
Tips and Advice
“if we do not nurture the future leaders, we will fail. My mother tells of an old proverb. If you want to have one year of prosperity, grow grain. If you want to have ten years of prosperity, grow trees. And if you want to have 100 years of prosperity, grow people.”
- Susan Au Allen
Things to do:
- Bring a national consciousness to the need to educate a new crop of leaders
- Understand that there is a window of opportunity now and there has never been
- Look at non-traditional businesses
- Build relationships with major corporations who will mentor
- As minority entrepreneurs look at each other as marketplace
- Understand the political process. Business is politics.
- Make it a priority to mentor someone.
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