The changing nature of BLACK BUSINESS
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Since the 1960s, white companies have discovered the black market, says Andrew F. Brimmer, president of Brimmer & Co., an economic consulting firm, and a former governor of the Federal Reserve. Black consumers have moved away from the inner-city neighborhoods where black-owned businesses are traditionally located, he adds.Skip to next paragraph
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''Discrimination cuts both ways. It served as a kind of protective barrier for black professionals,'' says Mr. Brimmer. For black businesses to prosper, they must ''look to markets beyond the black community,'' he says.
Some black leaders have a different view of the situation. Black consumers should band together and actively support black businesses, they say. The Rev. Jesse Jackson, president of the Chicago-based Operation PUSH, is taking such an approach.
''Black Americans must trade with each other,'' says Rev. Frank Watkins, a PUSH spokesman.
More black entrepreneurs now have high-level technical and managerial training. In 1965, only 25 blacks were enrolled in accredited MBA programs in the US, according to a study by the Consortium for Graduate Study in Management. In the fall of 1980, 7,521 blacks were studying for MBAs or PhDs in management, according to the National Center for Education Statistics.
Many blacks have percolated through the ranks of large corporations, gained valuable business experience, and struck out on their own.
''Black business leaders have had the opportunity to get in business and simply experience it. That in itself has been a tremendous help,'' says Mr. Quinichett of Sterling Systems.
Slowly, the black business community is weaving a web of networks to provide support, advice, and role models for those who want to start a business. Quinichett himself says he receives daily requests for help.
''I take the time to give whatever advice I can,'' he says.
Perhaps most important, a cutting edge of black businesses is entering high-growth fields and expanding their opportunities through joint ventures with white companies. In 1978, there were two firms on the Black Enterprise 100 list that could be classified as high-technology. Last year there were nine.
Two firms in the Washington, D.C., area alone are attempting to form national black-oriented TV networks. And black-owned firms are bidding on cable TV contracts across the country. At least one black company has applied at the Federal Communications Commission for a license to operate the cheap, plentiful mobile-phone service known as cellular radio.
But it takes a lot of money to open a business at the forefront of technology. Very few black concerns can afford the cost of stringing cable TV wire across a major metropolitan area, for instance. Many minority cable companies are thus joint ventures with white firms.
''While there may not be that much outright ownership by blacks[in areas of complex technology], we'll probably see a number of businesses with a high percentage of minority ownership,'' says Herb Wilkins, head of Syncom, a venture-capital firm specializing in minority-owned communications.
In general, black businessmen say obtaining adequate capital is their thorniest problem. Along with the financing problems faced by all small business owners, blacks say they often undergo extra-careful scrutiny by banks and venture-capital companies.
Black business experts are also concerned about impending changes in government aid. Washington bought $4.1 billion in goods and services from minority contractors last year, with purchases prompted under Section 8(a) of the Small Business Act accounting for almost half the total. The 8(a) program sets aside small contracts to be awarded on a noncompetitive basis to minority companies The Reagan administration says it will tighten the eligibility rules, forcing many concerns now on the program to graduate into the open market.
Seventy-five percent of Sterling Systems' business, for example, comes from the federal government - with much of that accounted for by 8(a) set-asides. Without the government's help ''we would not have grown as fast, though I would certainly still be in business,'' Mr. Quinichett says.
The administration is also proposing to eliminate the Small Business Administration's appropriation for direct loans. Some fear that the cutbacks could freeze businesses not ready for the cold winds of the free marketplace.
''If the cutbacks continue, six of the firms at the top of the BE 100 won't even be there next year,'' says Earl Graves of Black Enterprise.
But critics say the 8(a) program doesn't breed strong businesses.
And, for now, the most compelling concern of all businessmen - black and white - remains the recession.
''It's a tough period for anybody in any business,'' says Herb Wilkins of Syncom.