Risk and Reward
The surge in African-American business growth comes with a disclaimer: Much of the new growth reflects an uptick in sole proprietorships -- one-man or one-woman businesses with no other employees.
Amid the statistics reflecting Florida's economic vibrancy during the past few years is one that's gotten little attention -- a surge in business formation by African-Americans. The number of businesses owned by African-Americans in Florida jumped 71% from 1997 to 2002 -- one of the largest increases of any state with significant numbers of black residents.
That increase far outpaced Florida's 18.2% overall growth in new businesses during the same period. The most recent U.S. Census Bureau report indicates that there are now more than 100,000 Florida businesses owned by African-Americans, boosting Florida into third place nationwide. New York and California, the No. 1 and 2 states in black business ownership, both saw the number of African-American-owned businesses grow by less than 50%. Georgia, No. 4, posted growth of 62%.
The figures come with a disclaimer: Much of the new business growth reflects an uptick in sole proprietorships -- oneman or one-woman businesses with no other employees. Among the 7,768 black-owned firms involved in retail trade, for example, only 865 have paid employees. Of the nearly 8,000 firms in transportation and warehousing, fewer than 400 have paid employees.
"The vast majority are people who have regular jobs who want to start a business on the side," says Mark Scovera, interim president of the Florida Black Business Support Corp., an arm of the 21-year-old statewide Florida Black Business Investment Board.
In addition to those who run businesses as a second job, the Census figures reflect many who become full-time business owners, including classic small-business entrepreneurs operating neighborhood stores or restaurants. (The retail category, while ranking fifth in terms of the number of African-American-owned businesses in Florida, is first in terms of sales, according to the Census.)
Darryl Watkins, 44, started Pinellas Point Fish Market in St. Petersburg in 2003. His father ran a fish market, and Watkins is following in his footsteps. Before expenses, the business brings in about $100,000 a year. A year ago, he hired a full-time employee to help out in the store, but like most small-business people, he struggles, coping with the rising cost of his main product -- fish -- and rising energy costs. "It's been real hard some days," he says. A Subway restaurant in the same center recently remodeled, and Watkins is trying to get a business loan to spruce up his location, too. "I'm trying my best," he says.
The Census figures also show growth in the number of black professionals among the ranks of business owners -- with ventures in fields such as financial planning, insurance, advertising and computer consulting, the kinds of businesses that economists say are most likely to add value to the economy and grow. The Census categorizes 7,649 of Florida's African-American businesses as professional, scientific and technical services.
Treva Marshall launched her Winter Springs boutique public relations firm as a home-based business. Almost immediately, she hired a part-time assistant, and a year later she moved TJM Communications into an offsite office. Today, the business has three employees and serves seven clients, including the Walt Disney World Swan and Dolphin resorts, SunStream Hotels & Resorts in Naples and Fort Myers and wine merchant 57 Main Street Imports. "We are very much in a growth stage right now," says Marshall, 36.
Other developments reflect the growth in both the number and size of black-owned businesses. While much business development in the black community traditionally has centered on helping small businesses get started, a new initiative targets medium-to-large black companies. The Metropolitan Orlando Urban League, in partnership with investment firm Stonehenge Capital, is offering loans of more than $2 million.
What accounts for the surge in new black-owned businesses in Florida? In the case of many of the sole proprietorships, it's often the structure of the industry. In financial services, technology and marketing, for example, permanent, fulltime jobs come and go. In other cases, it may be simply the desire to cobble together several sources of income to make a better living.
W. Randolph "Randy" Lee, CEO of Jacksonville's Raven Transport, thinks that many African-Americans are simply responding to favorable economic conditions in Florida -- factors like no state income tax, which appeals to professionals from out of state who leave the corporate world to become Florida business owners. Frances Wimberly, president of the Tampa Bay Black Business Investment Corp., sees a growing confidence and willingness by more African-Americans to take the risk. "I think there are more and more people who step out on faith," she explains.