Minority businesses face challenges
BY COREY DAVIS
Saturday, September 23, 2017
Small businesses looking to grow in the marketplace face several obstacles, especially those ran by people of color.
According to a recent report by the N.C. Justice Center’s Budget & Tax Center, businesses owned by minorities or people deemed to be historically disadvantaged have faced challenges, past and present, such as accessing capital and navigating industry social structures.
William Munn, a policy analyst for the Budget & Tax Center, said historic barriers faced by minorities show lack of equal access to capital and opportunity for underutilized businesses hurt growth, both nationally and in North Carolina.
He added if enterprises of color had been able to reach resource parity with their representation in the United States’ population, these firms would have employed more than 16.1 million workers, earned more than $2.5 trillion in receipts and numbered 6.5 million firms.
“If more of these businesses could be connected to opportunities that will help them grow, it could have a significant positive impact on our state’s economy,” Munn said.
Rocky Mount native Tarrick Pittman’s CoolGeeks Computer Repair and Installation Services has grown over the past eight years in the Douglas Block in downtown Rocky Mount. Pittman, who started his business initially in his home, expanded into a larger 2,500-square-foot location last year because of the increase in his services.
“Offering quality services has allowed me to build a wide customer base not only from the African American community, but the entire Rocky Mount area as a whole,” Pittman said.
However, Pittman remembered how difficult it was to get his business off the ground, especially during a down economy. Pittman said he was turned down by every bank, and there was no opportunity for him to start CoolGeeks in 2009.
It didn’t stop him from pursuing his dream, and he went on to create a business plan and did the research possible to launch his business venture.
“I had a lot of friends, family members and some former classmates that initially invested in me, while I also had my own personal money in my 401K that I took out to start,” Pittman said. “For a lot of African-Americans, we run into that issue of having access to capital because generational wealth plays an important role into that, too. They have other opportunities that we aren’t afforded too.”
This past spring, Michigan-based AEL Span, which is run by a former U.S. Marine who is black, expanded into North Carolina after assuming operations of a Nash County trucking company that had ceased operations, resulting in the saving of more than 100 jobs. James Henderson, president and CEO of AEL Span, started the logistics and global supply chain services company in 2007.
Courtland Colding, vice president of client solutions for AEL Span, said the company also has locations in Kentucky, Indianapolis and Ontario and more than 400 employees.
Colding said AEL Span is working on the process to become certified as a Historically Underutilized Business (HUB), which is a category for disadvantaged enterprises with the goal of the certification to ensure that applicants are from groups who have historically been excluded from opportunities.
Even with an established and growing firm like AEL Span, being a minority-owned business comes with many hurdles such as limited access to resources, namely people, finances and the need for large equipment, Colding said.
“We usually have to grow organically, which means you’re not getting any help or money from anybody else, so you’re doing everything on the strength of your own balance sheet,” Colding said. “When that happens, it’s a gradual growth cycle, which can be a very slow process, and we can’t ramp up like the other large firms. That’s a challenge that minority firms and small businesses often have to face.”
With the population of people of color in the United States growing, increasing the flow of capital for minority-owned businesses must be a national priority to re-engerize the American economy and increase competitiveness in the global marketplace, Munn said.
Pittman said for the black community, it’s important that business owners develop partnerships and investment groups to invest back into the community and instill in the younger generation the opportunity to become their own bosses in the future.
An issue Pittman often has observed from failing businesses is that once people have an idea, they believe the next step is finding the capital to support their idea, but they overlook some key steps on the way.
“To me, the next step should be the actual process of your business and how you’re going to run your business and what type of people you’re going to try to get to work for you,” Pittman said. “I think people overstep that and they go from idea to money. When they receive the money, it doesn’t last long because they didn’t focus on the process of how the business was actually going to run to generate revenue.”