Minority business: the new wave - includes related bibliography - Cover Story

Nation's Business, Oct, 1995 by Sharon Nelton

Meet Rhonda L. Johnson. Just four years ago, with her father and another partner, she started Johnson Bryce, a Memphis company that prints and laminates large rolls of thermoplastic film that is eventually used to make packaging for snacks and other products. The company employs 50 and expects revenue of $20 million to $22 million this year.

Or take brothers Ronald Lee Roybal and Michael Wayne Roybal, the owners of an architectural-engineering company in Denver. The Roybal Corp. did $4.9 million worth of business last year and has created jobs for 60 people.

In Birmingham, Ala., Tim Lewis launched T.A. Lewis & Associates, Inc., a telecommunications consulting company, eight years ago and has expanded it to 18 employees and more than $1.4 million in annual sales.

These entrepreneurs herald a promising trend: They are among what observers say are the increasing numbers of smart, well-educated, experienced minority-group members who are starting their own businesses and succeeding at building stable, growing companies.

Today's minority-owned businesses are "stronger, they're better financed, their owners are better prepared, they're better business people in general than were their predecessors," says Harriet R. Michel, president of the National Minority Supplier Development Council, a New York-based organization that promotes corporate purchasing from minority vendors. "They're better positioned to take advantage of any opportunities that are out there."

James I. Herbert, an African-American who directs the Urban Enterprise Initiative at Kennesaw State College, in Marietta, Ga., says: "The upcoming generation is moving more toward entrepreneurship and business ownership than my generation. You have more students enrolling in business schools and entrepreneurship programs. You have more young folks coming out being entrepreneurial early."

To be sure, when it comes to minority economic development, problems remain. But attempts to foster minority entrepreneurship in recent decades appear to be paying off in an increase of viable minority-owned firms. And the breakthroughs being made in minority-business development could lead to solutions for breaking the cycles of poverty that so deeply affect minority communities.

Observers point to these signs of progress for minority businesses:

There are more of them than ever. Just how many more won't be known until later this fall when the Census Bureau releases figures on minority firms from a 1992 survey. The latest figures available--reflecting sole proprietorships, partnerships, and Subchapter S corporations but not regular C corporations, which typically include the largest businesses-are drawn from the Census Bureau's 1987 Survey of Minority-Owned Business Enterprises. According to that survey, the 1980s showed extraordinary increases in the number of minority-owned firms. While the number of all businesses grew 14 percent from 1982 to 1987, minority businesses increased 66 percent, to more than 1.2 million.

Leaders of the pack were Asian-American/Pacific Islander businesses, which increased 89.3 percent, to 355,300 companies, and Hispanic firms, which grew 80.5 percent, to 422,400 companies. The number of black firms reached 424,200 in 1987, and American Indian/Native Alaskan businesses totaled 21,400.

Substantial growth of minority businesses was expected to continue into the 1990s, and today, for example, Hispanic Business magazine estimates that Hispanic businesses number 585,000.

Minority businesses are growing. As an example, when Black Enterprise magazine published its first list of the top 100 black-owned industrial businesses in 1973, annual sales for those companies totaled $473 million. This year its list of the top 100 industrial and service companies, based on 1994 sales, tops $6.7 billion. A separate list of the top 100 automobile dealerships--which are not included in the first list--added $4.9 billion to the sales figures for black-owned companies.

Minority entrepreneurs are increasingly well-prepared to run businesses. Robert L. Johnson had 26 years of experience at Sears, Roebuck and Co. and had become Sears' first black vice president when he and his daughter Rhonda Johnson co-founded the Johnson Bryce firm. Rhonda Johnson had already earned a degree in economics from Wellesley College and had worked as a revenue analyst at New England Telephone Co.

Both Mike and Ron Roybal have master's degrees in architecture, and Ron earned an additional advanced degree in city and regional planning. Both worked for other architectural firms before they founded their own company.

Before be started TA. Lewis & Associates, Tim Lewis earned a degree in electrical engineering and worked a dozen years at other companies, gaining solid experience in engineering and planning, and sales and marketing.

The Roybals, Lewis, and Rhonda Johnson, all in theft 30s and 40s, are part of a great we've of minorities who swept into colleges and universities in the past several decades, gained experience, and began to form theft own companies.