Nation's capital could grow much faster with expanded black entrepreneurship

Get Oru10Plan: State of Black Business, 14th edition and get 10 NBBM posters

Our10Plan: State of Black Business, 14th edition takes a new approach to economic justice--just like the first Africans in America.  To reach the land of milk and honey, as we described at the Hampton University Ministers Conference in June, African-Americans must go on the commercial offensive in domestic and international markets.

To put the low state of business activity in context, we are comparing the level of black firms with employees to the number of African-Americans with graduate degrees and the number of veterans between ages 18 and 64. Black business owners are more likely than business owners in general to have college degrees and veterans often have relevant experience in fields which have commercial applications and the military is the biggest procurer from black businesses.

More than half of the states have statewide business inclusion initiatives. For policymakers and citizens who wonder how effective those efforts are, our annual state by state evaluation is a useful way to ascertain best practices.

In the nation's capitol,  the 2014 Annual Survey of Entrepreneurship reported an estimated 1,455  black companies with employees.  However, there are six times that many veterans--8,324  and twenty times that many blacks with graduate degrees--27,294.  Additionally,29,013 have achieved bachelors and 29,166 are currently enrolled.

We have distilled those into the ten key factors for black business success. Rating each state on a ten point scale for each factor, the State of Black Business arrives at a single rating which is then comparable to other states around thnation.

We have argued that there must be a shift from a compliance mentality to an economic development approach in order to create the jobs needed to undergird black neighborhoods.

In lean budget times, governors and legislatures of both parties are demanding results from business inclusion efforts. States which scaled these operations back have reversed course and put more resources into it.

The earlier chapters show both the potential and the unmet challenges of business inclusion. Public policy does create business opportunities for underrepresented companies. However, settling for raw revenue figures does not translate into opportunities in the fields which create the most jobs in the communities where they are needed most.

These are the factors which count:

Executive Leadership – Among the ten states with the greatest procurement spending with black-owned businesses, five are governed by Democrats and five are led by Republicans. Supporting business growth transcends ideological boundaries.

Legislative Authority – Many states have a legislative history of more than 30 years in support of business inclusion. These statutes have been maintained through party shifts, because they represent a broad consensus of state and local leadership.

Federal Procurement Success – States are taking a greater role to pursue business from the world’s largest customer, the U.S. federal government. Black businesses have federal contracts in every state in the nation.

Monitoring of State/Local Contracting – The states with the most success in providing supplier diversity have quarterly monitoring of results with specific breakdowns for African-American businesses, including new attention to spending with African-American female-owned businesses in some states.

Access to Capital – In Chapter 2, we described how states are stepping into the breach to provide loans and guarantees which can provide African-American businesses with the cash flow to compete. The need for this resource also crosses party lines.

Rate of Growth – The velocity of self-employment growth among African-Americans is an indicator of the policy environment that individual owners perceive. We’ve tracked these statewide figures for the past 10 years.

One-Stop Access – Minority businesses need a clear point of contact with government such as the maintained by the Governor’s Office of Minority Affairs. As we travel around the country, we encounter many entrepreneurs unaware of services available in their own state or locality.

Ratio of black/white self-employment – Another statistical measure of how African-American businesses are included in the overall economy of a state. We find this number is closely correlated with disparate rates of unemployment.

Cultural Tourism – More than half of the states actively promote and preserve their African-American historic sites with festivals, museums, historic markers and online/print guides as a way to stimulate economic development.

Large-Scale Enterprises – Our focus on Job Creation and Innovation recognizes that millions of manufacturing jobs lost by African-Americans will not be replaced by small retail establishments alone. Communities need employment anchors based on manufacturing which responds to the basic needs of local, regional and global markets. Where these firms exist, smaller companies have a much greater chance to succeed.


Industrial Bank boosts capital region

B. Doyle Mitchell, president of Industrial Bank of Washington, is among a dozen bankers cited as Best in Black Business exemplars in #Our10Plan: State of Black Business, 14th edition by John William Templeton, co-founder of National Black Business Month.

Michael Grant, president of the National Bankers Association, says, "#Our10Plan acknowledges the critical role of African-American banks to close the $30 billion credit gap which trims the sails of the 2.6 million African-American businesses. This data-rich resource convinces anyone of the great power of entrepreneurship to reach the goal of economic parity by 2020.”

Templeton unveiled Our10Plan: African-American economic strategy during a luncheon for the National Black Caucus of State Legislators convention in Los Angeles. The strategy sets a goal of reaching ten percent of U.S. GDP comprised of income to black businesses and consumers by 2020, which would double the current $1 trillion aggregate black income to $2 trillion. The current aggregate black income is just six percent of the $17 trillion GDP although African Americans are 11 percent of national population. The 2.6 million African-American firms are nine percent of all U.S. businesses.

Our10Plan would jump start the process by reallocating a portion of the Federal Reserve’s quantitative easing to add capital to African-American banks and deposit fines collected by the Justice Department from predatory lending cases with those institutions.

Only two percent of SBA loans go to African-American businesses, an indication that other institutions are unwilling to meet the credit needs of black firms. The total loans outstanding have fallen by more than half since 2008 although there are 600,000 more blacks in business.

“The biggest math problem in America is that two percent of business loans does not meet the needs of nine percent of American businesses,” said Templeton.

Mayor Muriel Bowser

Bowser raises CBE goal past $300 million

Mayor Muriel Bowser and Councilmember Vincent Orange announced the Fiscal Year 2016 (FY16) Certified Business Enterprise (CBE) spending goal. The Bowser Administration also unveiled a new website,, that will help CBEs better navigate the local government procurement process.

“Small businesses are the engine of our economy. As Mayor, I am committed to creating an environment where District businesses can start, thrive and grow,” said Mayor Bowser. “That includes leveraging the District’s local procurement dollars to support small businesses. We are re-envisioning the way we approach procurement by setting ambitious goals and providing tools so our small businesses can succeed and continue to create pathways to the middle class.”

The FY16 expendable budget for District government agencies is $634 Million, of which at least 50 percent, or $317 Million, must be spent with CBEs. This feasible, but bold, spending goal is the result of a top-to-bottom, data driven analysis of past practices and current agency budgets.

In FY15, the Bowser Administration spent more than $250 million through contracts with small businesses, which exceeded the total amount spent in each of the past five years. The FY16 goal reflects the Mayor’s commitment to build on the District’s progress, and to increase its support for small businesses.

“It is imperative to keep small businesses in the District solvent because small businesses create jobs, pay taxes and provide opportunities,” said Councilmember Vincent Orange. “Today’s press conference and aggressive implementation of CBE laws sends the message that the District’s mandate for small and local business development will be adhered to. More than ever, the District is committed to fostering an environment where small businesses can achieve success.”

Mayor Bowser launched to both increase transparency in the goal-setting process and help CBEs navigate the procurement process. The website offers a user-friendly platform to search for procurement opportunities across District government. The Bowser Administration will also release an ‘Opportunity Guide’ with an agency-by-agency overview of CBE opportunities.

The Bowser Administration and Councilmember Orange are committed to better utilizing local procurement power to drive small business creation, growth, and retention, and to hold District government agencies accountable to meet their spending goals.