It’s Not the Color of Their Skin but the Spirit of Their Enterprise

There are roughly 70,000 black-owned businesses in California, out of a total of 2.5 million companies, says Patricia Means. That’s only 3% of the state’s businesses and that’s not enough, says the publisher of Turning Point, a 7-year-old magazine targeted at readers in the black entrepreneurial class.

So Means hopes to help black entrepreneurs increase their chances next Wednesday at the California African-American Business Summit ’99 at the Biltmore Hotel in Los Angeles.

The summit will not be an isolated event. On May 6, Pepperdine University is convening a conference at the Marriott Hotel in downtown Los Angeles to highlight economic opportunities in South Los Angeles.

And on May 13, Minorities in Business magazine will hold a banking and financial conference at the West Angeles Church of God on Crenshaw Boulevard.

Can a torrent of talk lead to entrepreneurial action? It can’t hurt.

Networking is valuable. “In my 21 years in business, I’ve found that it’s not what you know but who you know,” says Carl Burhanan, owner of Oasis Aviation, a Los Angeles-based fuel distributorship.

The Business Summit expects 400 business owners and potential lenders, suppliers and customers to attend.

Knowledge is useful. The discussions at such conferences are about practical business matters: cash flow management and how to manage a $25,000 business so it grows to $250,000, says John Bryant, head of Operation Hope, a nonprofit organization that funnels bank loans to minority communities.

Most of all, exposure can only help. Most black-owned businesses have few employees and revenue measured in thousands of dollars. So meetings with bank officials and business professionals can educate both sides. Bankers get a chance to learn that the outstanding characteristic of black entrepreneurs is not the color of their skin but the spirit of their enterprise.

Delbra Richardson, principal owner of Del Richardson & Associates, will be at the Business Summit. Richardson’s five-employee Inglewood firm handles relocation of residents in redevelopment projects.

She founded the company 15 years ago on $1,500 borrowed from two friends because real estate development firms were trying to hire her to handle resettlement of black families in Indio. “I figured if they were going to pay me $50,000 to do that, I could make more doing it for myself,” says Richardson, who has built her business up to $1.5 million in annual revenue.

James Anderson, owner of Beach City Computers, will be there. Anderson, who has worked in computers since 1968 at Garrett Aerospace, Allied Signal and IBM, founded his Diamond Bar-based company two years ago. Beach City assembles desktop computers from parts made in Southern California or shipped from Taiwan, just as Dell and other computer makers do.

“I started the company to show that we could make computers as high in quality and reasonable in price as anyone else,” Anderson says. He invested $5,000 to start and today the company is doing $150,000 a year in sales, with six employees. “I’m bidding to get some big customers,” he says.

Not all black-owned businesses are small. Oasis Aviation has $40 million in annual revenue and a chance to attract new financing and grow bigger. Burhanan, who flew helicopters during 26 years in the U.S. Army--for presidents Johnson, Nixon and Ford while on the White House detail--took a job as a pilot with the fuel company upon military retirement in 1977.

Oasis expanded and got into trouble, but Burhanan managed--and ultimately bought--the fuel division and made it successful, supplying such customers as Federal Express.

Burhanan knew FedEx founder Frederick Smith, who was a Marine pilot, and that brought Oasis some business years ago. But the contract swelled when Burhanan offered to help the customer out by fueling Fed Ex’s delivery vans as well as its airplanes.

Now Burhanan’s company is being contacted by managers of an investment fund put together by Black Enterprise magazine to channel loans of $5 million to $15 million to black-owned businesses. He is also talking to major banks in the Los Angeles area about financing for expansion.

It’s important to note that the Black Enterprise fund is being managed by the Smith Barney division of Citigroup. That indicates top-tier financial companies are looking for opportunities in the black community, which has been hurt by lack of access to capital.

Until now, having your own business was not a typical dream of black children, who had few examples to go by. In fact, black Americans are only half as likely as white Americans to be self-employed, according to a study by economist Robert Fairlie of UC Santa Cruz.

But things are changing. The many conferences to help black-owned businesses are one sign of change; the interest of Wall Street investment bankers is another.

And the attention of management scholars such as Michael Porter of Harvard University doesn’t hurt either. Porter founded the Initiative for a Competitive Inner City five years ago to counsel businesses in an urban setting.

Inner cities offer advantages to business, he preached. They have underutilized labor, good transportation facilities and are underserved by major businesses. Therefore an entrepreneur can build up a strong local market and then look beyond the neighborhood and the racial or ethnic group for expansion.

Sometimes the world changes in an entrepreneur’s direction. Eric Hanks, a former computer consultant to Northrop, founded Santa Monica’s M. Hanks Gallery 11 years ago. The gallery, which specializes in African American art, now takes in close to $1 million in annual revenue. Business has picked up in the last three years as “clients from a variety of backgrounds have become interested in black American artists,” Hanks reports.

But entrepreneurship is never easy, and money is far more of a problem than color, says Mark Iles, owner of Mark Anthony Printing Service. Iles has been building his Los Angeles-based business for 10 years and is at $300,000 in annual revenue. But that’s not enough. “I have to get to $1 million in accounts receivable, then I’m bankable,” Iles says.

So he’s out working contacts, drumming up business. “Color has never been a problem,” Iles says. “I’ll compete with anybody.”

Truth is, black-owned businesses have been “competing with anybody” for a long time. Now with a little help, and an increase in numbers, business could be looking up.