One billion dollars. Not long ago, that sum resided in a distant constellation of stellar achievements — along with leadership of multinational corporations — deemed light-years beyond the grasp of African Americans. In 1973, the year we published our first list of the nation’s largest black-owned companies (then called the BLACK ENTERPRISE Top 100), the total revenues of those enterprises were less than half a billion dollars.
Fast-forward to 2006. Today, our BE 100S lists include no less than 10 companies (up from seven last year) with annual revenues exceeding the $473 million generated by the entire original Top 100. This year, we have an unprecedented three companies with revenues of more than a billion dollars each: World Wide Technology Inc. in Maryland Heights, Missouri; Prestige Automotive Management in Ypsilanti, Michigan; and Houston-based CAMAC International Corp.
CAMAC, a multinational oil and gas exploration company led by CEO Kase Lawal, is our 2006 Company of the Year, the third billion-dollar company recognized by BE since TLC Beatrice International Holdings in 1988. And, our 2006 Financial Services Company of the Year, Carver Bancorp, led by CEO Deborah C. Wright, is well on the way to becoming the first black bank ever with a billion dollars in assets. Two other BE 100S CEOs, Harpo Inc.’s Oprah Winfrey and RLJ Development L.L.C.’s Robert L. Johnson, are among the first African Americans to be recognized as billionaires. When Reginald F. Lewis became the first BE 100S CEO of a billion-dollar-plus company, he often and openly expressed his expectation that other black entrepreneurs would shortly follow, moving the BE 100S into the ranks of America’s largest multinational corporations. While Lewis, tragically, did not live to see it happen, the era of black-owned, billion-dollar companies seems to be at hand.
All of this says a lot about how far African American entrepreneurs and their companies have advanced over the past three decades. But what’s more important, intriguing, and inspiring is what the success of these companies says about the future of black business. What does it mean for more black-owned companies to cross the billion-dollar threshold? What can we take from the examples of companies like CAMAC and Carver to ensure that their success is replicated? What has to happen for black-owned businesses to continue to grow in size, as well as number? The answers to these questions can be found in the stories of the best and brightest of the BE 100S, as chronicled in this issue, which features our 34th Annual Report on Black Business. As you read through this issue, a number of important themes will emerge, pointing the way to the future of black business and the wealth-building potential of all black Americans.
First, in order to grow black-owned companies of significant scale, black entrepreneurs must continue to find ways to secure the nation’s largest
corporations as customers, investors, and strategic partners. For example, Lawal’s partnerships with oil industry giants such as Conoco are critical to his ability to grow his $1.5 billion company. My own company provides yet another example. Our partnership with Clear Channel Communications to produce and distribute the Black Enterprise Magazine’s Keys To A Better Life daily radio segments for stations across the country allows us to tap into a new revenue stream, as well as new audiences, for our magazine and media offerings. Simply put, the view of black entrepreneurship as being worlds apart from mainstream corporate America is no longer tenable, if it ever was. To grow businesses of scale, black entrepreneurs must develop intimate and intricate relationships with decision makers at the corporations impacting their industries. This is why the Black Enterprise Entrepreneurs Conference, hosted by General Motors, is designed to bring black entrepreneurs together with the key decision makers of corporate America.The black entrepreneurial success model of the future will also continue to reward those who build performance-driven networks, expansive and interconnected businesses, and political relationships driven by the ability to anticipate and consistently meet the needs and business objectives of others. RLJ’s Johnson has achieved mastery in this area, having established relationships with everyone from Shaquille O’Neal and Jay-Z to former FCC Chairman William Kennard, now managing director of the Carlyle Group, and cable industry powerbroker John Malone. Once upon a
time, black entrepreneurs could operate in isolation, with a single-minded focus on squeezing profits from their small corner of the marketplace. That kind of isolation is no longer an option and is usually a precursor to elimination.Another theme key to the future of black business is the emergence of the serial entrepreneur — business visionaries willing and able to apply and adapt their business models across a variety of industries. That means not just starting and maintaining one successful operation, but parlaying that success into new ventures with larger growth and profit potential. In Johnson’s case, he’s parlayed the wealth he gained as a result of launching, building, and ultimately selling BET into sports franchise ownership and the lodging industry. Both Johnson and Lawal have made the financial services industry the target of their next conquests — both recently purchased banks.
Tapping professionally trained, visionary management talent will be critical to our ability to create more billion-dollar businesses. Enterprises driven by the energy and vision of a s
ingle founding entrepreneur will always be a part of the lore of an America that celebrates rugged individualism. CEOs like Wright, Lawal, Johnson, and World Wide Technology CEO David Steward, however, understand that to build businesses of scale requires more than a driven entrepreneur. It requires a trusted, capable team of executives capable of managing a company with operations across the country and around the world, with businesses in a variety of industries. Now, more than ever, the future of black business requires entrepreneurs capable of building and leading great teams.Let’s be clear: building black-owned companies is about more than creating more black billionaires. According to Thomas D. Boston, a member of the BE Board of Economists, one job is created for every $100,000 in revenues generated by black-owned businesses, and 85% of the jobs created by black companies are filled by black people. That may seem insignificant if you limit your faith in the potential of black entrepreneurship to mom-and-pop operations with only a handful of employees, if any. But if you up the scale to revenues of $1 billion, that not only means significant wealth for those who have equity in the company, but also 8,500 potential jobs for black communities that continue to cope with disproportionate levels of unemployment.
This is why supporting and building profitable competitive black-owned businesses, principle No. 8 of BE’s Declaration of Financial Empowerment, is an indispensable component of creating multigenerational wealth for all African Americans. We are on the threshold of a new era for black business, one that demands that we raise our sights and expectations even higher. Let’s claim and embrace the future of black business, with this issue of BE as inspiration and further evidence that there is no objective in the universe that is truly beyond our grasp.