Black-owned business ownership rises here

February 12, 2011
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Kent County saw a nearly 80 percent increase in the number of black-owned businesses between 2002 and 2007, according to U.S. Census Bureau survey results released last week.

The 2007 Survey of Business Owners revealed that growth in the number of Kent County’s black-owned businesses far outstripped general business growth of 13 percent in the five-year period.

The survey also revealed that black-owned businesses grew by 71 percent in southeast Michigan, where Dave Bing, a black businessman, is mayor of Detroit. In Michigan, 72,561, or 8.9 percent, of the state’s businesses are owned by blacks. Some 64 percent of businesses in the city of Detroit are owned by blacks.

Nationwide, the increase in black-owned businesses was 60.5 percent since 2002, compared to an 18 percent overall growth rate.

The Survey of Business Owners, part of the Economic Census, is conducted every five years. The next one will occur in 2012. The Census Bureau has already reported results for businesses owned by Hispanics and women, and statistics for businesses owned by Asians and Native Americans will be released later this year.

Marc Morial, president and CEO of the National Urban League, said access to capital remains one of the three biggest challenges for minority entrepreneurs.

“What I hope this says loud and clear to investors is you are missing an emerging market in the U.S.,” Morial said. “If minority businesses are growing at a faster clip, even with barriers to capital access, imagine what the growth rate would be if those barriers were eliminated, or even lowered. We need the investor community, the venture capital community, the hedge fund community and those on Wall Street to look at this report and recognize that they are missing incredible opportunities right in their own communities.”

In the city of Grand Rapids, 2,000 of those firms are single proprietor businesses without any employees. The 81 businesses that had workers in 2007 employed 1,072 with annual payroll of $39 million.

Receipts for black-owned businesses were $112.4 million in Grand Rapids and $202 million countywide.

The leading sector for local black entrepreneurs was health care and social assistance, followed by other, construction, retail and transportation. The smallest category at 75 businesses is professional, scientific and technical services.

Isaac Norris, whose architectural firm Isaac V. Norris & Associates, 1209 Kalamazoo Ave. SE, designed the new Salvation Army Kroc Center in Grand Rapids, said access to capital is a challenge for any small business. He used Small Business Association loans and services at the Small Business Technology and Development Center at Grand Valley State University when he was starting out.

Making connections, another challenge cited by Morial, requires a time commitment but has been important in establishing fruitful partnerships, Norris said. He said he was lucky enough to find a mentor as a high school student who has been at his side ever since.

“It’s up to the minority community to reach out as much as possible, to be a part of as many organizations as possible that will benefit your business,” said Norris, who has two employees. “I can’t be at every marketing meeting or chamber of commerce or economic development board meeting. … There are challenges there.”

In Grand Rapids’ suburbs, there was not enough data on black-owned businesses from 2002 for the bureau to report. But in 2007, the bureau’s survey showed 58 black-owned businesses, or 2.2 percent of a total 2,574 businesses; in Kentwood, 382 of a total 4,287, or 8.9 percent; and in Wyoming, 330 of the total 5,522 reported black or African-American ownership, or 5.9 percent.

In Kalamazoo County, the number of black-owned businesses grew by 38.7 percent between 2002 and 2007, now standing at 1,260 and accounting for 5.9 percent of all businesses there. In Muskegon County, the number of black-owned businesses dropped by 22 percent, from 716 in 2002 to 559 in 2007, and they now represent 4.9 percent of all businesses.

Norris said with signs of hope poking through Michigan’s economic struggle, he is optimistic for the future.

“The future looks bright for small businesses,” Norris said. “These economic times helped me to change how I’m doing business to become more efficient. At first, I grimaced; then I began to see how to make a more productive business.”

Some 87 percent of black-owned businesses in the U.S. have receipts of less than $50,000, Morial noted.

“I think it is very important for every community in the nation that can glean from the report a profile of the black-owned firms in that city. … It helps those communities develop coherent economic growth and economic development plans,” Morial said. “You can create jobs and development opportunities in your cities.”

Total 2002

Black-Owned Businesses 2002

Percent Black-Owned 2002

Total 2007

Black-Owned Businesses 2007

Percent Black-Owned Businesses 2007

Kent County

45993

1739

3.7%

52412

3127

5.9%

Grand Rapids

13786

1141

8.2%

15538

2081

13.4%

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