Insurance and Environment and Life Science & Biotech and Manufacturing & Technology and Technology and Real Estate & Retail

VIEWPOINT: We stand on the shoulders of black business giants

January 24, 2005

In a recent conversation with a family member regarding the lack of African-American businesses in the high technology, life sciences and larger manufacturing arenas, I began to wonder, "What are the barriers that prevent African-Americans from entering business? Are conditions worse now than in the past when we seemed to have greater representation in these areas?"

Some will say it is the lack of access to capital. Some will point to the continued aura of racism and prejudice, while still others will blame it on the scarcity of relatives and close family members who could act as mentors for budding entrepreneurs.

All new businesses suffer from the same malady when attempting to convince investors to fund some venture. Capital will always find deals where the risk-reward equation is anchored in trust. Trust is directly related to comfort with the business plan, the principals and the business environment. Investors generally place their resources in ventures they are knowledgeable of and comfortable with. Since there is less wealth within the African-American community, the problem of securing capital financing is magnified for black entrepreneurs.

Mentors are people who have survived the challenges of the business world, attained success and are willing to share those experiences so others can learn and not repeat unsuccessful tactics.

Mentors within the African-American community are accessible, but not plentiful. Like in any relationship, mentors have to be identified and nurtured. In many cases, mentors within the African-American community are still engaged in the day-to-day operations of their own businesses, so they may have limited time to mentor young entrepreneurs.

It is the continued reliance on the "racism and prejudice" argument that pricked my mind for an answer. Does racism and prejudice still exist? Of course. This illness could still be the millstone around the neck of black businesspeople and could still be limiting the full blossoming of black businesses.

This question drove me to research the successes of black businesses during the darkest period in this country's history, 1600-1900. What I found was some exciting and comprehensive work done by Juliet E.K. Walker. She has compiled the most exhaustive study of African-American businesses to date-"Encyclopedia of African-American Business History."

The basis of her work can be summed up in this statement:

"We have in this country's history focused on black survival under adverse and impoverished conditions ... [while] evidence of the achievement of economic success by blacks in an era where they had to contend, not only with the societal racial constraints, but also with the forces of slavery, is generally ignored."

Walker has uncovered example after example of successful black entrepreneurs in times and under conditions that were openly hostile and dangerous. Her book depicts instances where states and other jurisdictions passed laws that seriously limited the activities of black businesspeople. Think of this-even during the height of slavery, laws were being passed to give competitors of these black businesses added advantages:

In 1686, the Carolinas passed a law prohibiting African-Americans from engaging in any trade or business.

In 1740, South Carolina passed a law stating, "No slave or slaves shall be permitted to rent or hire any house, room, store or plantation on his or her own account."

In 1806, South Carolina law made it illegal for slaves to participate in any mechanic or craft trades for personal benefit; to have apprentices; to buy, sell, or trade goods without ticket; or to be employed in shops without whites present."

In 1837, a Georgia statute stipulated that slaves could not hire their own time or trade for themselves and made it illegal to rent stores or plantations to slaves.

In spite of these added obstacles, Stephen Smith, born a slave in 1797, by 1860 had holdings of more than $250,000 and by 1865 was acknowledged as the wealthiest black-worth $500,000. He was a lumber and coal merchant, real estate speculator, informal banker and philanthropist.

In 1808, the New York African Society for Mutual Relief was founded and invested in real estate. Founders and members were primarily craftsmen who owned their own shops.

In 1810, Absolom Jones founded the first black insurance company, the African Insurance Company of Philadelphia, with capital stock of $5,000.

There are many such successes in this book, which leaves me wondering if we, African-Americans of 2005, are not soft and whiny. If we want to be successful in business today, the hurdles are not nearly as high as the ones negotiated by our ancestors.

Do we have mentors? More than in the 1700s. Do we have access to enough capital? Yes, if we can learn to pool our own resources like the founders of mutual-relief funds of the past. Is racism and prejudice still hampering us? Ask our ancestors who conducted business during the 1800s!



Moore is manager of business advocacy for the Greater Indianapolis Chamber of Commerce.
Source: XMLAr01300.xml
ADVERTISEMENT
Comments powered by Disqus