A call to arms for Black business

Black Enterprise, Nov, 1996 by Carolyn M. Brown, Tonia L. Shakespeare

THE STATE OF AFRICAN AMERICAN BUSIness has been pendulous as political leaders from both parties conspire to get Americans behind their drive to create a so-called level playing field. Last year, in the fallout from this war, minority businesses inevitably experienced a number of setbacks and turning points.

On the positive side, they benefited directly from augmented loan programs under the direction of the Small Business Administration's Administrator Phil Lader, and took advantage of international trade missions initiated by the late Commerce Secretary Ron Brown. But at the same time, Republicans proposed downsizing the federal government by eliminating certain programs and agencies. The Commerce Department was one of two minority-business-friendly agencies facing the budget guillotine. The other was the SBA. Both survived but with major cuts in funding.

This was in the wake of the U.S. Supreme Court decision in Adarand vs. Pena, which last year imposed more stringent standards for federal set-asides. Now the minority business community is alarmed that the SBA's 8(a) program is again on the hot seat, threatened by the Meyers Bill, sponsored by Rep. Jan Meyers (A-Kansas), currently chair of the House Small Business Committee. The Meyers' Bill (H.R. 3994) would eliminate any type of racial or gender quotas in the 8(a) program, which mandates that federal agencies set goals specifying the contracts targeted to socially and economically disadvantaged small businesses. Last year, minority businesses secured $4.5 billion in U.S. contracts through 8(a), the nation's largest federal procurement program.

Attempts to dismantle the 8(a) program, or the Commerce Department for that matter, send a message that a Republican-controlled Congress does not understand minority business, says Joan Parrott Fonseca, director of the Department of Commerce's Minority Business Development Agency. "We have to keep benchmarking and looking at programs and improving them--looking for a way to empower through economic development."

Minority- and women-owned businesses can no longer be content to wait for administrative decrees. They have to be more proactive, says Ed Howlette Jr., president and CEO of NexGen Solutions Inc., a Washington, D.C.-based SBA 8(a)-certified firm that develops custom software and sets up both national and international wide area networks (WANS).

"We have to stand up and speak out. This means making phone calls, sending letters and attending meetings [with members of Congress]," explains Howlette, who belongs to the Washington, D.C.-based National Coalition of Minority Businesses (NCMB). This nonpartisan advocacy group is composed of roughly 60 minority CEOs, including 11 BE 100s CEOs.

Most small business owners, however, contend that their days are spent trying to pay bills and meet payrolls, with little time left to battle Capitol Hill. This is an increasingly weak excuse considering how recent policies, involving such issues as environment and worker safety, the minimum wage, pension plans taxes, health insurance and compliance paperwork, directly affect the cost of doing business.

If small black business owners want to grow their firms, they must be more proactive on a local and national level. This means forming coalitions with other businesses, minority banks, churches and civic groups, and coming up with creative solutions to help small businesses turn a profit, hire more workers and pay decent wages. In turn, both employer and employee can reinvest dollars into the community.

No doubt this is a call to arms for black business. As African American entrepreneurs look to help build and cross President William Jefferson Clinton's "bridge" into the 21st century, they must learn to mobilize their forces, strengthen their economic position and wield their political power.

SIZING UP SMALL BUSINESSES

Business start-ups reached a record high in 1995, with some 819,477 new firms. The total number of U.S. businesses is about 22.5 million. The majority of those enterprises, all but 14,000, had 500 or fewer employees and under $25 million in sales revenues--the SBA's definition of a small business. These include corporations, partnerships and sole proprietorships.

According to the SBA's Office of Advocacy, small businesses employ 53% of the private workforce, contribute 47% of all sales and are responsible for 50% of the private gross domestic product. Small business-dominated industries produced roughly 75% of the 2.5 million new jobs created during 1995.

Throughout the next decade, some of the fastest growing sectors will be medical and dental laboratories, residential care (housing for the elderly, group homes and drug rehab centers), credit reporting, equipment leasing, child day care services and job training. Jobs in some of the highest paying service sectors--such as architectural and engineering firms--will rise about 30%.

MOBILIZING SMALL BUSINESSES

In this heated presidential election year, there has been a bipartisan fight for the small business vote. Both the Dole/Kemp and Clinton/Gore camps tout their pro small business records, each promising to sign laws to help make small businesses more productive and profitable and to create more and better paying jobs.