But tough times loom as economy falters


December 06, 1990|By Graeme Browing

Maryland leads the nation in black-owned businesses per 1,000 people, but a deteriorating economy, a lack of access to markets and the unavailability of capital mean minority entrepreneurs face tough times anyway, business leaders and state officials said yesterday.

According to data collected by the U.S. Census Bureau in 1987 and compiled in a report released yesterday by Maryland's Department of Economic and Employment Development, 8.9 percent of Maryland businesses are black-owned, compared with a national average of 3.1 percent, J. Randall Evans, the secretary of economic and employment development, said at a conference on small-business strategies.

"We have a tremendous resource in this state with the large number of black-owned and minority-owned firms. Now the challenge is to develop the skills and competitiveness of those businesses," he told participants in the second annual Strategies for Success conference sponsored by the department and the Maryland Small Business Development Financing Authority.

According to the Census Bureau figures, the number of black-owned enterprises in Maryland increased 57 percent from to 1987, while black-owned businesses nationwide increased 38 percent, Mr. Evans said.

Part of the state's showing might result from its racial makeup. The percentage of non-whites in Maryland's population is approximately double the percentage nationally, according to 1990 projections by the Census Bureau.

Mr. Evans said he did not know exactly why Maryland was ranked so favorably. The raw Census Bureau information "seems to indicatea favorable business climate here," he said.

No matter how many minority businesses there are in the state, however, they face even tougher obstacles than other businesses do, several conference speakers said.

Minority businesses have to struggle not only with bureaucratic mazes and a lack of prominent role models but also with the public perception that black- and female-owned enterprises do not make the same contributions to the community that large corporations do, said Joshua I. Smith, founder, chairman and chief executive officer of MAXIMA Corp.

In addition, difficulty in securing capital and a scarcity of markets -- the perennial problems for all small businesses -- have become acute as the economy bogs down, said Mr. Smith, a Baltimore executive whom President Bush named chairman of the Minority Business Development Commission last year.

"There's a saying that when small business in the U.S. catches cold, minority business catches pneumonia," Mr. Smith said. "Well, we're at a point, quite frankly, where that prospect is frightening."

In a luncheon address to the conference, Mitchell Crusto, associate deputy administrator of the U.S. Small Business Administration, said his agency was making new efforts to aid minority businesses through loan assistance, loan guarantees and management advice.

"As we now ask the economies of Eastern Europe to look at new forms of government, it's also important for this country to look hard at ways to boost its long-standing tradition of entrepreneurship," Mr. Crusto said. In particular, the agency has been encouraging minority businessmen to apply for assistance under its 8A program, which provides loans, management advice and other aid to individuals who have been deemed "socially and economically disadvantaged," Mr. Crusto said.

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