Minority-owned businesses could be powerful engines for economic growth in the coming years, according to experts who note that 90 percent of the nation's population growth is expected to come from minorities.
Local advocates are optimistic that 2000 will be a watershed year for minority-owned companies, pointing to new initiatives that aim to provide capital, technical assistance and marketing muscle to small- and medium-sized businesses.
One ambitious blueprint involves a countywide campaign to promote the growth of African-American businesses. The long-term initiative is being launched by the Black Chamber of Commerce of Western New York, the Eastside Businessman's Association and the Office of Urban Initiatives and has won enthusiastic backing from many inner city business leaders and clergymen.
"We're seeing more minority-owned businesses coming together and partnering with each other as they try to be more competitive in this new economy," said OUI Executive Director Antoine M. Thompson.
The initiative includes development of an annual "black economic agenda," the publication of a free booklet called the "Guide to Black Buffalo" and a media campaign that will encourage local consumers to patronize African-American-owned enterprises.
While revitalizing inner city commercial strips is a priority, Thompson said the long-term effort must go beyond strengthening neighborhood businesses. He said advocates are hoping to carve a larger role for minority real estate companies, home builders, contractors, lawyers and other service-providers.
"Our biggest challenge is to reshape spending habits so that our dollars recirculate several times," Thompson said.
Meanwhile, the U.S. Small Business Administration and dozens of local bank executives are involved in a lending assistance and marketing campaign aimed at helping African-Americans who are looking for loan guarantees to start or expand small businesses.
The number of SBA-backed loans to African-American businesses declined by 35 percent last fiscal year. Only 11 such businesses received loan guarantees for the year that ended Sept. 30, compared with 17 loans in the prior year. SBA officials and lending institutions have vowed to be more aggressive in promoting awareness of these programs through community outreach efforts.
The SBA has been working closely with the Black Chamber of Commerce, the NAACP, the Buffalo Niagara Partnership and other local development agencies. Alfred F. Luhr III, senior vice president of business banking at M&T Bank, underscored the significance of promoting "synergy" between the groups.
"By bringing all our resources together, we can make sure that we're all pushing in the same direction," Luhr said.
Buffalo's main development agency is also hoping that some early-stage initiatives will help to foster the growth of minority-owned businesses in the coming year. The Buffalo Economic Renaissance Corp. has been working with one of the world's largest construction industry brokers to oversee a program that guides minority and women-owned companies through the bureaucratic maze.
Archie Amos Jr., director of the BERC's Entrepreneurial Assistance Program, said the new county courthouse and convention center projects, along with plans to revitalize he waterfront, present lucrative opportunities for local contractors. But Amos said many companies face obstacles when they try to get insurance or bonding. A performance bond is an agreement whereby an insurance company becomes liable for the performance of work or services provided by a contractor by an agreed upon date.
"Many of these companies can win bids on projects, but they encounter problems later in the process when they try to secure bonding or insurance," Amos said. "Part of the problem is the Old Boys' Network, but it also has a lot to do with trying to get the proper paperwork in order."
The BERC has paid Willis Corroon, a London-based insurance brokerage, $75,000 to provide training and technical assistance to workers.
The agency also plans to aggressively promote its Neighborhood Mini-UDAG Loan Program, an initiative designed to spur the expansion of neighborhood businesses by providing "last resort" financing to companies that are having trouble getting financing from conventional sources.
A Census Bureau study issued last fall lends credence to claims by some that minority-owned businesses offer significant opportunities for growing the economy. The report projected that 90 percent of the nation's population growth over the next 50 years will come from Asians, Native Americans, blacks, people of Hispanic descent and other minority groups.
"We have found that the 21st century will be a very different America," Commerce Secretary William M. Daley told delegates at a conference on National Minority Enterprise Development. "A growing economy, a larger minority population and a closing income gap means a dramatic increase in minority buying power."
Thompson said he thinks the changing political winds in City Hall will also be a catalyst for ensuring that city lending programs place an increased emphasis on minority-owned enterprises. For the first time in city history, African-Americans hold a 7-6 majority on the Common Council.
"I'm sure that the new council will be putting added pressure on the BERC to increase lending opportunities in the inner city," Thompson said.