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Don’t talk to Richard G. Campbell about Y2K; he doesn’t have time for it. Or more to the point, he doesn’t have the time to be deterred by it. Like most small business owners, Campbell simply can’t afford to have Y2K problems derail his $8.5 million plastic engineering and manufacturing business come January 1. That’s why he spent some $40,000 this year for new computers, ensuring his Corona, California-based Campbell Plastics Engineering & Manufacturing would be Y2K compliant. This president and CEO has done everything in his power to make sure his operation will be running smoothly-both before and after the New Year champagne toasts.
“We get computer upgrades every two years,” says Campbell. “So far there hasn’t been any concern.”
But Y2K is just one issue that small black business owners like Campbell will face as they strategize to successfully, and profitably, transition into the next century. They’ll be forced to investigate other aspects of technology, such as e-commerce, which hasn’t even fulfilled its potential, yet is predicted to be a successful source of revenue for companies in the next decade.
“Companies that aren’t involved in e-commerce won’t be in business very long,” says Courtland Cox, director of the Minority Business Development Agency (MBDA) in Washington, D.C. “Black businesses have to really focus on this issue.”
Those who have relied on federal contracts as a primary source of revenue have already noticed the winds are changing. Now you must prove you’re a SDB (small, disadvantaged business) to become certified for 8(a) contracts by the Small Business Administration. Being a minority is no longer the defining qualification. In addition, the federal supplier base is rapidly consolidating, which means that to compete, you must be larger and better-equipped to perform and produce more goods and services.
The good news: the bull economy has allowed many to expand and diversify. There are a record number of small black firms in the U.S. (more than 880,000 in 1997), which bodes well for the future if they embrace technology and are committed to growing by any means necessary-alliances, mergers, acquisitions-to level the hypercompetitive playing field.
Yet small black business owners still face significant challenges, including limited access to capital, and competition from larger firms in a shrinking supplier pool. If small black firms don’t expand and take advantage of nontraditional markets, they could have a difficult time staying in business for the remainder of the year, much less thriving in the new millennium.
DRIVING A BOOMING ECONOMY
Minority businesses are branching out from the retail and service industries where they have traditionally predominated into manufacturing, transportation, construction and technology, helping to power the surging economy we’ve experienced for nearly a decade. In 1997, the number of African American-owned businesses was 881,646, an increase of 108% from 1987. In addition, these businesses produced $59.3 billion in revenues in 1997 and employed 580,000 workers. Skill intensive areas such as business services are the fastest growing kinds of minority enterprises, followed by finance, insurance, real estate and manufacturing.
“Small black firms need to be concerned