Local patronage scant at minority-run shops

September 11, 1995|By Chicago Tribune

CHICAGO -- Many minority entrepreneurs dream of opening a business in their ethnic communities, providing a decent living for themselves and, as an added benefit, good jobs in the neighborhood.

But after the job applications and the opening comes a key element all businesses must have -- customers. Many African-American-owned businesses find, however, that they draw no special support from African-American consumers.

In a recent Black Enterprise magazine survey, 47 percent of 1,100 African-American respondents said they spend less than 10 percent of their earnings with African-American-owned businesses. About 16 percent said they spend between 20 percent and 49 percent.

It's a twist on the debate on affirmative action: Some African-American business owners say they believe they don't deserve special consideration from African-American customers. Others, however, say that without such support they can't create and maintain the economic stimulus their businesses provide in their neighborhoods.

"It is a fact of life that other ethnic minorities support each other and we [African-Americans] don't," said Lydia McKinley-Floyd, chairwoman of the marketing department at Clark Atlanta University and director of the Urban Marketing Research Institute.

In Asian and Jewish neighborhoods, for instance, a continuing ripple effect starts with the first dollar spent in a community store, she said. "Money turns over two to eight times in other communities, but not even once in the black community before it goes outside the community," she said.

Only one in four African-American shoppers considers African-American ownership of a business an important factor when deciding where to shop, said Marcus Alexis and Geraldine Henderson in a paper titled "The Economic Base of African-American Communities." The writers concluded that for African-American retailers to succeed, they cannot rely on race alone; businesses must be competitive.

"I don't want people to shop here just because I'm black, but because of the quality, service and good prices and that I just happen to be black," said A. T. Hopkins, owner of Hopkins Foods in Chicago, who belongs to the free-enterprise school of thought.

Most consumers say they believe cost, service and convenience are most important in choosing where to shop, according to Mr. Alexis and Ms. Henderson. If they can't get that at an African-American-owned business, then they are not going to support the business.

Yet for many ethnic minority groups, helping members of one's group is essential to stimulate economic development in ethnic neighborhoods.

"The only way to have black economic development in the community is to support the businesses," said John F. Robinson, president and chief executive officer of the National Minority Business Council.

Community support brings additional revenue to the business, allowing the business owner to increase the staff size and to hire from the community.

Ironically, 62 percent of those who responded to the Black Enterprise study said black businesses fail because of a lack of support from African-Americans. It's particularly a problem as more prosperous African-Americans move out of black neighborhoods where most black businesses are located.

Many African-American-owned businesses tend to be small businesses with few staff members and limited inventory, who find it hard to compete with the superstores, said Joseph Caldwell, owner of TailoRite Cleaners.

"Consumers come to businesses because they have a need. If you are looking for a dress, you think selectivity. In the black community, you have one boutique on one corner and it's 5 miles before you find another. In a mall, there are many stores to look in," Mr. Caldwell said.

"You aren't thinking about race. You're thinking about what you want to wear."

Some businesses realize it takes more than putting out a sign to bring in business from their community. Many advertise in the Black Pages, a Chicago-area directory of African-American-owned businesses and companies that have African-American employees.

Others are joining organizations such as the Straight Talk Economic Roundtable, a group of 65 business owners who network to establish support among themselves and to encourage others to do the same.

Members of the group have to tell 10 of their friends and relatives to shop within the consortium. These friends and family members are given membership cards good for a 10 percent discount at some of the stores.

"The formula is that businesses will provide the leadership to the community by being role models," said W. L. Lillard, chairman of the Roundtable and owner of Star Planet Television Network, a local cable television operation. "We have to change the habits of people spending money."

Those habits can be hard to break.

"If it's not convenient to get to an African-American-owned place when I need something, then I go with the most convenient place," said Jeff Batie, who lives on Chicago's South Side.

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