When I speak before a group of black entrepreneurs, I often challenge my audience by asking how many black businesses they patronize. I inquire whether they currently use the services of black attorneys, doctors, accountants, banks, or investment advisers, among others. Invariably, they demonstrate by a lack of show of hands that we are not fully supportive of our entrepreneurial brethren.
I engage in this exercise as part of a more detailed discussion on how vital it is for all of us to do business with one other. I have often said that such cooperative transactions advance our collective employment status and economic development.
I’d like to go a step further though. Not only should we build transactional b-to-b relationships, but we must partner with one another by actively engaging in joint ventures, mergers, and acquisitions. Most of our enterprises’ mom-and-pop status is due, in large part, to a pervasive lone-wolf attitude on the part of black business owners. In the long haul, this approach doesn’t serve your enterprise or the black business community as a whole.
The stats bear out my assertion. Of the nearly 2 million black-owned businesses nationwide, 95% of our companies are sole proprietorships. In other words, we only employ ourselves. As a result, these entrepreneurs are stymied when it comes to gaining the capital and contracts necessary to grow their businesses. Let me be blunt: Corporate America does not want to purchase services from a collection of micro businesses.
In short, small business owners are being crippled by an aversion to scale than access to capital.
If Exxon can merge with Mobil or United can join forces with Continental to fuel synergy, innovation, and expansion, why can’t black businesses do the same? Point to almost any iconic company and you will find that its growth was, in part, a result of commercial marriages.
To share the value of partnerships, I only have to point to my own company as an example. I am proud to announce that recently Black Enterprise, the leading media company providing business information and services to African Americans for close to 45 years, has teamed up with Film Life, the company behind American Black Film Festival for the past two decades, to jointly launch ABFF Ventures, a company tied to our mutual business growth and advancement in the event and entertainment industries.
This joint venture was made possible due to a mutual friend and business acquaintance James R. Kelly III, who saw the potential for a great partnership. ABFF Founder and CEO Jeff Friday and I came together to leverage our brands so that ABFF Ventures can take full advantage of opportunities in the event, entertainment, and media space. In terms of doing business with major corporations, our customers will benefit from our extended reach, the full exploitation of our properties, and the creation of exciting new vehicles. Moreover, we benefit from the ideation and innovation in product development and processes that come from the collaboration of two outstanding teams to produce a dynamic outcome.
I am excited by the prospects of revenue, audience, and market share growth that come from this alliance, but also by the myriad opportunities to uplift scores of African Americans through increased employment, managerial training, supplier development, and community impact.
Whether you are a millennial tech entrepreneur or an established BE 100s CEO, I urge you to consider expanding through aligning, joint venturing, and merging with other viable black-owned businesses. The bottom line is such activity is vital for us to achieve scale—the next evolution of black business development.