What Progress?

Filed Under: Labels: ,

Statistics are a funny thing. It’s interesting how very different conclusions can be derived from the same set of numbers when viewed from different perspectives. If an organization publishes a set of statistics and a person either doesn’t know how to dissect them or is too lazy to ask probing questions, they can be fooled into thinking that a situation is better (or worse) than it really is.

Last week, the Hartford Courant published a story entitled, "Census Statistics Twisted." In this article they were critiquing reports that the U.S. Census Bureau has been trumpeting recently about the progress of Hispanic and African American entrepreneurs. While it’s true that the overall number of businesses have increased for both groups, the majority of the growth is due to an increase in single-person companies.

The key issue here is not how many businesses have been started by minorities. The key issue is how many are in business five years later, how many have employees, and how profitable they are. Take a look at the Courant’s analysis:

  • The number of Hispanic-owned businesses with employees fell 6 percent between 1997 and 2002, the two years in which the Census Bureau last surveyed minority-owned firms. Those owned by blacks barely budged.
  • During the same period the total number of firms with employees rose 4 percent nationally, meaning that established businesses owned by groups such as whites and Asians are the ones that really expanded.
  • In 1997, the average revenue of all Latino-owned firms - those with and without employees - was $143,866, according to the Census data. The average revenue of all black-owned businesses was $77,426. Firms owned by whites, meanwhile, had average revenues of $417,395.
  • In 2002, revenues for black- and Hispanic-owned businesses fell further than for whites, and the gap widened by 1.5 percentage points for both minority groups.

While it’s great that some progress has been made in terms of the overall number of minority owned businesses in existence, we can’t be satisfied with the fact that there are more sole proprietors now than five years ago. New approaches to minority business development are desperately needed (see New Growth Strategies Needed).

The next phase of minority business development has to shift away from mainly focusing on starting businesses and move toward building businesses that have economic significance. More knowledge capital and financial resources need to flow into capacity building. More resources and programs are needed to train and coach people how to use industry best practices for growing from a “lone ranger” entrepreneur to an employer that has a payroll of 50 people. That’s real economic development.

Some of the responsibility also rests with the minority entrepreneur. Those who desire to grow must see beyond their own abilities and talent to perform a service or create a product and focus on building an enterprise. They even may have to consider various ownership alternatives that could challenge their concept of owning and running their own business (see Leveraging Strategic Relationships).

Now is not the time to pat ourselves on the back or rest on recent achievements. There is much more work to be done in the area of minority business development if it is going to be used as a viable economic develop tool for communities. More innovation, expertise, and resources are needed to fulfill the potential of this initiative. Let’s get to work!

Empowering You for Success,

Paul Wilson

Full article:,0,1477392.story

Tags: business, entrepreneur, minority business development, small business, economic development

| edit post

0 Responses to "What Progress?"