[Posted Mar. 5, 2008]

Black Businesses Challenged To Grow Through Hard Times

By Rosaland Tyler
Associate Editor
New Journal and Guide

     While records show that more African Americans opened businesses in recent years, few statistics explain why some black businesses succeed while others fail.
The fastest growing segment of the American economy, black-owned businesses rose 45 percent between 1997 and 2002, according to a 2002 report titled: Survey of Business Owners. In plain terms, this increase means that about 4.5 million minority-owned firms currently generate about $600 billion in sales, according to census data.
   “Successful businesses surround themselves with quality people,” said Delceno C. Miles, who heads the Miles Agency, a niche marketing and public relations firm in Virginia Beach, which was established in 1989.
“Just go down Black Enterprise’s list of its top 100 black companies” Miles said. “There you will see examples of many companies that have been in business for decades.”
    Although auto dealers (34.5 percent) top the BE list, followed by other (16.8 percent) and technology (11.2 percent), the list does not explain why some black businesses succeed while others fail.
    Is it because some laid-off workers start tiny companies, then close them when the economy improves?
    Yes, according to small business counselors at SCORE. org. “Self employment tends to fall as the economy grows. During 1979-2003, for example, self-employment increased by 33 percent for women; 37 percent for African Americans; 15 percent for Latinos; 10 for Caucasians; and 2.5 percent for men;” according to the SBA.”
    So, many small business are actually a work in progress. As the economy changes, so do many small businesses. For example, 671,800 new businesses opened in 2006, according to SBA records on business trends. But 544,800 businesses closed that same year, according to SBA records.
    This means a lot of new businesses do not succeed. Overall, two thirds of all new firms survive at least two years, according to the SBA. About 44 percent survive at least four years.

   “Once you receive a cancer diagnosis, the care should be personalized,” said Ramsey, a board certified fitter of osthetics and prosthetics who owns Creative Images in Portsmouth, which she opened in 2004. She is also a certified cosmetologist.
     “We provide many services, especially, to that person who does not have a support system,” Ramsey said. “So many women don’t know about the resources and services that are available after the breast is gone.”
      She is trained to fit artificial breasts and mastectomy bras. She is certified in lymphodemia prevention and education. She helps women apply makeup. She styles wigs. Most of her services, which can start as low as $150, are covered by most insurances.
      While cancer is the second leading cause of death in African American women—outranked only by heart disease—according to NIH records, fewer black women died from colorectal, gynecological and breast cancer after 1989.
Although the cancer survival rate for black women exceeded the survival rate for white women.
     This according to a Nov. 14, 1996 National Cancer Institute press release, cancer continues to strike many women in Hampton Roads, Ramsey said.
     “And the more informed and educated you are, the more that empowers you,” she explained. “We try to make sure that every hurdle you jump—there’s someone there with you. We constantly track on our clients and keep track of their surgeries and chemo treatments.
     “So you don’t get too depressed, because many women are already low. It is devastating to receive a cancer diagnosis.”
For Blacks beginning in the 1990s about 5.6 percent fewer Blacks died from cancer, compared to 1.7 percent fewer Whites, NHI records show.

      But some companies do survive. And, the key to survival is to develop winning strategies, said Miles, whose company will celebrate its 20th anniversary next year.
    A Stanford University graduate, Miles has served as vice chairman of the Virginia Beach School Board. Recognized by the Jaycees in 1997 as an outstanding young citizen, Miles received an award from state lawmakers in 2001. She was appointed to the State Council of Higher Education for Virginia in 2000.
    To grow your business, get involved. Advertise and promote your company, Miles said. “It doesn’t mean you have to spend hundreds of thousands to do so. Many new businesses stay in their comfort zone and that is not a successful strategy.”
Market your company by volunteering to serve on boards or committees, she advised. Start an intern program. Join professional groups to learn more about your craft.

Dr. William Thomas

    Second, delegate. “Don’t try to wear all of the hats, Miles added. “Many new businesses don’t have all of the needed tools in their toolbox to succeed.”
Which is one reason why Hampton University opened a business incubator in 1992 to help new businesses succeed. “We offer space for new companies that need space, plus counseling,” said Dr. William Thomas, a former attorney in Los Angeles, who moved to Hampton Roads in 1992 to help start Hampton’s incubator.
   “Running a business is hard and you have to be committed to it—to getting it done,” Thomas said. “We’ve been successful by any definition. And I feel we are doing what we set out to do.”
    Operating under the umbrella of the university’s Business Assistance Program, the incubator set out to nurture new small businesses “during their critical early existence,” according to the program’s website.
    It was developed as a partnership between HU and the Hampton Community Development Corp. It was constructed with federal, local and private funds. The center has had a 30 to 40 percent success rate, Harris said.
    Everything that it takes to succeed in business is offered, here, such as a free, one-year lease that is renewable for up to three years. Free lights are included. Seminars on business practices and procedures are offered. Three suites are currently available in the facility, which contains 10-suites for new businesses.
    But success matters. Progress counts. “We think three years is a reasonable amount of time” to spend at the incubator, Thomas said.
As a real incubator helps some infants survive (or perish), the HU site has nurtured many businesses. Some firms have specialized in information technology, health services, physical therapy or other areas.
   “Our emphasis has been not on renting space but on assisting businesses and helping them to become good businesses,” Thomas said. “Initially, we thought a lot of our clients would be minorities but we have served all races.” To learn more about the HU incubator, phone 722-9283.
    Comprising only 12 percent of the population in 2002 when the number of new black-owned businesses increased by nearly 50 percent, black businesses tend to have no employees other than an owner. By comparison, about three fourths of all U. S. businesses had no employees.
   “The real challenge is to move these smaller businesses into the next step of growth,” said Ronald Langston, director of the Commerce Department’s Minority Business Development Agency. “
   “You’ve got to get out here and do it yourself,” added Manisha Hooks, an African-American mother of three who owns a 40-employee janitorial and maintenance firm in Milwaukee called the Nisha Group LLC.
    Since launching her business in 2004, Hooks has expanded from a basic cleaning service to a full-service building maintenance and security firm. Last year, the Nisha Group had sales of more than $400,000.
    Hooks, who routinely works 10-to-12 hour days, said, “No one is going to give you anything.”

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