understanding who you are, who your customers are, what will sell online and how you’ll fill orders.
“Don’t spend a lot of money on software and technology until you understand how you can move products and services across the Net and what will sell,” says Daniel. “Find a Web or IT service company to install your system or select the right one. Don’t buy what your friend has; your firm may have different needs. You need to be selective in finding someone to help you understand how to implement e-commerce into your overall business strategy.”
Whether participating domestically or in cyberspace, the baton has been passed to small black businesses. You can remain viable and competitive into the next century and beyond. To achieve this, you must embrace technology and look to one another to share your assets and expertise to win the race to economic independence.
SEEKING CAPITAL GAINS
Studies indicate that minority businesses are significantly more likely to be denied bank credit, and when successful, receive smaller loans than comparable nonminority businesses. Some experts say lenders and investors are also largely unaware of the growth potential of this emerging minority market. Despite the significant growth of minority-owned businesses, the amount of venture capital (and the number of investment funds) that are operated by or targeted to black businesses is inadequate. For example, one study found that minority businesses have an estimated capital need of $144 billion per year. The estimated total amount of investment funds allocated to private equity capital is $85 billion. Yet, of this, only $1 billion to $2 billion is managed by minority-owned firms and/or targeted to minority businesses.
In an effort to spur minority business ownership, a growing number of firms are assisting minority companies in obtaining financing. One such firm, Capital Strategies Inc., was founded in 1994 on New York’s Wall Street to capitalize small businesses when lending institutions can’t or won’t.
“When a loan gets above $100,000, that’s when the banks want to know everything,” says Capital Strategies founder Bentley Whitfield. “But still prospective loan applicants find that they are still being denied the necessary funds due to admission of faulty credit, lack of collateral or no experience in the area of business.”
Darrin Smith, an NFL Seattle Seahawks linebacker, founded Access to Capital Group Inc. in Dallas in 1996 to bring together angel investors and growing companies that service ethnic markets. “The ethnic market is growing and represents a great investment opportunity,” says Smith. “There are a lot of people with good ideas who just need capital. We teach them what to do when they get in f
ront of investors.”
On the federal front, the SBA has created the New Markets Initiative, a public-private partnership to provide tax credits, investment capital and credit, and technical assistance to stimulate business formation and job creation in underserved rural and inner-city communities. Investment monies will be funneled into these areas through venture capital companies that provide equity venture capital financing and technical assistance. As an added component, the SBA will select