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

Nation's Business, Oct, 1995 by Sharon Nelton

Among other alliances are those fostered by the U.S. Department of Defense through its Pilot Mentor-Protege Program, established four years ago. For example, Booz, Allen & Hamilton, Inc., an international management and technology consulting firm, is linking up with Unisource Systems, Inc., an African-American telecommunications consulting firm in Chicago.

Unisource is able to learn from the giant firm, and both companies gain the ability to bid together on contracts; sometimes Booz Allen is the prime contractor and uses Unisource as a subcontractor, and other times Unisource is the prime contractor and subcontracts to Booz Allen. "The ultimate benefit is when you can get revenue through the door, and I think it's a benefit to both of us in that particular area," says Sheila Talton, Unisource's president.

Minority businesses and their marketing techniques have become more sophisticated. As recently as the early 1960s, according to Bates of Wayne State, minority business owners struggled to make a living in small-scale retailing and personal services, such as food stores, beauty parlors, barber shops, laundries, and restaurants. But now more and more minority entrepreneurs are starting ventures in what Bates calls "emerging lines" of business--in industries where minority ownership has historically been minimal.

Minority entrepreneurs are also targeting larger markets, increasing their chances of success. "The very largest of the black-owned businesses today compete in the open marketplace. They do not typically target a minority clientele," says Bates.

Minority entrepreneurs are beginning to emerge as bigger players. Among African-Americans, for example, perhaps only two business owners would have had widespread name recognition 25 years ago--John H. Johnson of Johnson Publishing Co., the founder of Ebony magazine, and Berry Gordy of Motown, the recording company.

Today, there are many who have won widespread reputations and increasing clout nationally and locally. Among them are Robert L. Johnson (no relation to Johnson Bryce's Bob Johnson) of BET Holdings, in Washington, D.C., a public company listed on the New York Stock Exchange and parent company of Black Entertainment Television; Earl G. Graves, the founder of Black Enterprise, in New York, and chief executive of Pepsi Cola of Washington; and entertainers such as Oprah Winfrey and Bill Cosby.

Perhaps the biggest player of all, however, was Reginald E. Lewis, who died of cancer at age 50 nearly three years ago. In 1987, he forged the leveraged buyout of Beatrice International Foods, a conglomerate with 64 companies in 31 countries, for just under $1 billion. Today TLC Beatrice International Holdings, Inc., which is headquartered in New York and did $1.8 billion in sales in 1994, is run by his Philippine-born widow, Loida N. Lewis.

Coupled with minority business owners' increased individual power is their greater sophistication in the use of group power and technology to accomplish economic goals. For example, in the Indian community,, comprising more than 550 tribes, "providing a nations/voice is no small task," says JoAnn K. Chase, a Mandan-Hidatsa Indian who is executive director of the National Congress of American Indians, in Washington, D.C.