The number of black-owned businesses in the Baltimore area grew three times as fast as Baltimore-area firms as a whole between 2002 and 2007, statistics released last week by the U.S. Census Bureau show.
Government officials and business owners said a booming, prerecession economy and state efforts to help create and boost minority-owned businesses helped drive the sharp increase over the five-year period in Baltimore and the five surrounding counties. The number of black-owned firms jumped 61 percent to 39,086 businesses, according to the data. By contrast, during the same period the number of businesses as a whole in the Baltimore area rose 20 percent.
Maryland had 102,135 black-owned businesses in 2007, up 47 percent from 2002, according to the national Survey of Business Owners, part of the five-year Economic Census. In 2007, black-owned firms in the Baltimore area accounted for well over a third of all the black-owned companies in the state.
"The growth numbers overall are very encouraging, especially as it relates to the potential for economic impact for the state of Maryland," said Luwanda W. Jenkins, special secretary of the Governor's Office of Minority Affairs. "It leads to job growth, greater tax revenue and, for African-Americans, a move toward greater wealth formation and asset formation, which is important for the development of any community."
Jenkins said some new business growth might have been spurred by retiring baby boomers looking to create businesses as second careers and growing numbers of young people starting companies after college. But it could also reflect growing frustration among blacks with corporate America's limited opportunities for upward mobility.
"In today's times, African-Americans and other minorities are looking more and more to entrepreneurship in larger numbers than we previously saw," said Jenkins, whose office oversees the state's Minority Business Enterprise Program, which sets goals for minority firm participation in state agencies' procurement of goods and services.
Despite business growth, minority businesses continue to face challenges, including access to capital and stereotypes about minority firms, Jenkins said.
"Business is done through relationships," she said. "Minority firms are still cultivating new relationships, whereas other companies have advantages of long-term, longstanding relationships."
The 2007 survey showed that black-owned businesses made up less than a fifth of the 235,273 firms in the region, which includes Baltimore City and Anne Arundel, Baltimore, Carroll, Harford and Howard counties.
Wayne R. Frazier Sr., president of the Maryland-Washington Minority Contractors Association, said the state's commitment to its minority business enterprise program and the booming prerecession economy helped create the new businesses.
"The state was brimming with historic new housing starts … banks were lending and investors [were] taking major risk, which fueled a can't-lose mentality that … created confidence within my community that one could succeed as an entrepreneur, too," Frazier said.
But he said many startups are struggling in today's rough economy, with cash-flow difficulties and intense competition.
The founders of Columbia-based Edwards & Hill Office Furniture said they managed to grow even during the recession by adapting to the market, carefully watching costs and working hard to establish long-term clients.
Some of the earlier challenges included building up the company's portfolio and "getting people to give you a shot," said Tony Hill, a managing partner. "Sometimes a small minority business can't compete with a huge corporation."
"When you're a small business and when you're a small African-American business … it's proving yourself until you get your first contract," added Hill, who said much of his business over the years has come from referrals. "We finish every job we take on, and we don't cut corners."
Melissa N. Bolling, chief executive officer of Laurel-based Bolling Courier Express and Bolling General Contractors, started a courier business in 2008 but has shifted into general contracting as the demand for courier services has declined. She said the state's minority business enterprise program helps minority firms compete against larger companies.
"It has opened a lot of doors as far as being noticed and [getting] chances for subcontractor opportunities," she said.
The five-year business owners' survey showed the number of black-owned businesses in the United States also grew at more than triple the national rate for all firms. Nationally, the number of black-owned businesses increased by 60.5 percent to 1.9 million, while businesses as a whole grew 18 percent during the same period, the Census Bureau said.
Text BUSINESS to 70701 to get Baltimore Sun Business text alerts