THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Monday, February 6, 1995 TAG: 9502050277
SECTION: BUSINESS WEEKLY PAGE: 12 EDITION: FINAL
TYPE: Cover Story
SOURCE: BY ROSALAND PIERCE-TYLER
SPECIAL TO BUSINESS WEEKLY
LENGTH: Long : 192 lines
Atlanta for years has boasted of itself as a dynamic center for black-owned businesses.
And if you had to choose among Hampton Roads, Chicago and Los Angeles, which would you say had the largest percentage of black-owned firms?
Surprisingly enough, it's Hampton Roads. In fact, Hampton Roads far surpasses Atlanta.
Blacks own 10.5 percent of the businesses in Hampton Roads, compared with 7.4 percent in Atlanta.
Of course, the numbers are dated. The U.S. Census Bureau gathered them in a 1987 economic survey.
And there's no telling how many of the area's 5,556 black-owned enterprises in '87 had the staying power to survive the mid-Atlantic slump in '91.
Even so, the figures are the latest available, and they tend to support a current of thought common in economic development circles these days.
While the traditional black business was a small shop or store catering to the neighborhood, there's a new wave of black entrepreneurs who aren't tied exclusively to their neighbors.
Although the neighborhood stores continue to be the most visible black businesses, the new wave entered the economic mainstream with products and services that appeal to customers regardless of their skin color.
The Tidewater division of NationsBank, for example, includes on its suppliers' list companies such as Texcom Inc., a Norfolk telecommunications firm; Curtex Construction Corp. of Norfolk; and Exclusive Temporaries of Virginia Inc. of Norfolk.
What's more, Old Dominion Asset Managements Inc. in Norfolk has become a solid entity, as has G&L Marketing in Norfolk. Corporate members of the Tidewater Regional Minority Purchasing Council reported $250 million worth of contracts issued to minority firms in Virginia last year, compared to $1 million in 1977, shortly after the council was founded.
What it all means is that there is no longer a typical black business. These days, black businesses range from construction companies and computer services to real estate, advertising, publishing and consulting businesses, said Granville Sawyer, head of the management department at Norfolk State University.
Because company downsizing, military cutbacks and glass ceilings have disproportionately affected African-American employees in recent years, Sawyer said, displaced baby boomers who can't move up frequently move out to start their own businesses.
There's no telling how many of the black businesses counted in that '87 census were headed by professionals groomed in large corporations, but it seems clear that training and technology are a hallmark of these new entrepreneurs.
``A keyboard doesn't care who is driving it,'' said Terry Riley, executive director of the Accelerated Career Transition Education Program at Old Dominion University.
``There's a lot of technology that will level the playing field,'' Riley said. ``Technology is the basis for creating new businesses. Now you can buy a personal computer and acquire teleconferencing, faxing and easy hook-up to cable.''
While the technology is expensive, it can reduce the size of the costly office staffs necessary only a few years ago.
Take the case of Larry D. Donnell. Not long after Eastern Airlines transferred him from Charleston to Norfolk as a shift supervisor, the airline failed. Donnell, raised in Greensboro, was left without a job.
``When Eastern went out of business, I was 42,'' he said. ``I was kind of set in my ways and not ready to start a new training program again in some other company.''
What he did was launch Classic Designs in 1990. First he printed advertisements on shirts, then added distribution of industrial safety supplies such as eyewash, hard hats and back supports.
``It was hard initially,'' he said. ``You have to do a lot of legwork, a lot of marketing.''
He still operates out of his home in Norfolk without any employees - plans call for hiring a full-time sales representative - but he believes the business has turned the corner.
He makes sales calls and books orders, but has not had to invest any cash into warehousing inventory. Working on the telephone, he can order products from manufacturers and wholesalers and arrange for delivery to his own customers.
``Most people don't care any more about your skin color,'' he said. ``You're seeing blacks going into business as marketing types, in areas such as insurance agencies, manufacturers' reps, things like what I'm doing, PR and advertising. A lot of them are pretty successful.''
It wasn't always that way. Integration changed the makeup of black businesses by fragmenting the black community.
Massive urban-renewal programs disrupted or dismantled entire black business districts, such as Norfolk's Church Street area, and shifted labor and residential patterns.
This forced black businesses to search for wider markets, and in turn put many of them in position to use the wide array of devices that became available in the 1980s.
For example, technology has made Peggy Scarborough's certified public accounting service run more efficiently.
After opening in 1987, she cut processing time in half by replacing typewriters with computers and installing a high-speed copier. Fax machines are office staples, speeding up direct contact with clients. She's hired two employees since opening.
``We are able to produce the same high-quality work, but it takes less time,'' Scarborough said. ``We are trying to make sure our business is geared toward client service, so that we can provide clients with answers in a timely manner and also increase our repeat business and revenues over the next five years.''
Technology also played a role in the expansion of Omega-Onyx Publishing Co., which began publishing black business directories in 1990.
Opened by Gerry McCants and three partners in his Portsmouth home, the company is now called Thomas McCants Media Inc.
Its directories list black and white companies; it's housed in the Signet Bank building in downtown Portsmouth.
McCants and his remaining partner, Darrin Thomas, who works in South Carolina, publish Black Pages USA, directories for middle-class customers distributed largely through black churches.
McCants has reached out to a wider audience than Hampton Roads.
He has 11 offices in Southeastern cities and publishes 200,000 directories each year. About 1,000 companies advertise in the directories.
The firm employs few workers, but the reliance on quick communications eases the need for a large work force and payroll. The publisher uses computers, faxes and soon will employ e-mail to speed processing between offices.
``It's a lot easier to get things processed and a lot quicker,'' McCants said. ``Five years from now we expect to be a much larger company.''
Many landmarks familiar to black businesses since an urban agenda was established in the 1960s have vanished.
For example, set-aside contracts were declared unconstitutional in a recent Supreme Court case that originated in Richmond.
Now the set-asides, which reserve a portion of public spending for minority-owned firms, are disappearing, although some public officials are trying to keep at last some seed money flowing.
In Chesapeake, Mayor William E. Ward has questioned the practice of discontinuing set-asides.
Last August, Ward told the City Council he was concerned African-American contractors received less than 2 percent of the awards.
Despite the crumbling urban agenda, some black-owned firms have managed to hang on, although it's not clear how many of the 5,556 black businesses counted in 1987 still exist.
That census found 52,909 businesses of every type in Hampton Roads, although many apparently ran on lean budgets.
Last summer, the Virginia Employment Commission reported 29,833 businesses in Hampton Roads employed at least one worker covered by unemployment insurance.
State officials say the difference in the two numbers traces to the many self-employed watermen, farmers, consultants, proprietors, moonlighters and other self-employed people found in the '87 census but not included in the '94 survey.
When it comes to distinguishing between minority and nonminority businesses, Sawyer of Norfolk State questions the need to do so.
Although 28 percent of the 1.44 million residents in Hampton Roads are black, Sawyer contends the phrase ``minority business'' masks changes in the economy since the mid-1980s, including the new wave of trained black entrepreneurs.
``A successful business is a successful business, period,'' Sawyer said. ``You do not do business with a person's race but with that person.'' ILLUSTRATION: [Cover]
BLACK-OWNED BUSINESSES: A CHANGING LANDSCAPE
Norfolk's Church Street commercial corridor in the 1970s, above, and
today.
Chart
BLACK-OWNED BUSINESSES IN THE U.S.
SOURCE: U.S. Census Bureau
KEN WRIGHT/Staff
Blacks owned about 3 percent of the business establishments in the
United States in 1987. Hampton Roads ranked among the metropolitan
areas with the largest percentage of black-owned businesses.
[For a copy of the chart, see microfilm for this date.]
RICHARD DUNSTON/Staff
These days, black businesses range from construction companies and
computer services to real estate, advertising, publishing and
consulting businesses, says Granville Sawyer, head of the management
department at Norfolk State university.
BILL TIERNAN/Staff
Gerry McCants and a partner publish Black Pages USA, business
directories for middle-class customers, McCants is co-owner of
Thomas McCants Media Inc., which also publishes business
directories.
Chesapeake Mayor William E. Ward has questioned the practice of
discontinuing set-aside contracts, which reserve a portion of public
spending for minority-owned firms.
by CNB