Former SBA leader: Blacks must use leadership, legacy for economic growth
28th April 2014 · 0 Comments
By Jasmine Rennie
Contributing Writer
(TriceEdneyWire.com) — Former Deputy Administrator of the U. S. Small Businesses Administra-tion (SBA) Marie Johns says people of color; especially African-Americans, must exercise leadership and attention to legacy in order to strengthen business ownership and personal economic prowess.
“It’s about the legacy,” said Johns, now founder and president of L&L Consulting – a division of Leftwich & Ludaway, LLC. “Most African Americans have not built a solid financial platform. This is what makes them unattractive to most banks. Sometimes things don’t change because we don’t require it.”
Johns shared her words of wisdom with a group of students at Howard University gathered to hear the results of a recent business plan completion. She covered a range of topics from unbanked households to the importance of the African-American presence in the corporate world.
Consumerism, representation in corporations, and net worth – combined with business ownership and entrepreneurship – are all factors that African Americans must tackle in order to attain success at the level of their White counterparts. It appears as though these topics have left a gap in overall success rates leaving African Americans struggling to catch up to other races.
“We have to do more to educate those around us about mindful consumerism,” said Johns.
According to a Nielsen Report, African Americans have a current spending power of $1 trillion and that number is set to increase by 2017. The Black community is noted for their excessive buying habits and are loved for their consumerism. They are seen as loyal and exhibit more aggressive consumption of certain items such as; media, hair care products and smartphones, according to the report.
Johns contends that giving the bulk of one’s salary to specific brands is not beneficial to the Black community: “If you know better you do better” she said.
In addition, she said, African Americans are largely unbanked because of a number of reasons, an economic weakness that could be easily dealt with through education.
A 2011 FDIC survey concluded that there were approximately 10 million unbanked households within the United States. The African-American demographic represented 21.4 percent of the unbanked population, and served as the largest single group within the unbanked population. The unbanked population is described as a group of individuals who do not use banks or credit unions for their financial transactions. A number of consumers are unbanked for reasons that include: poor credit history, lack of knowledge about the United States banking system, and language barriers for immigrants.
On the other hand, a place for leadership in strength in the Black community could be in small business ownership, Johns said.
“Small businesses are the engine of the U.S. economy,” she said, noting that she believes firmly in entrepreneurship. “We can figure out how to commercialize our God given gifts so we can make money from them…We have a deep and rich history of Entrepreneurship [as] our ancestors created [it] in this country, so we have to exhibit leadership,” she said.
According to statistics on Repec.org (Research Papers in Economics), businesses owned by African Americans tend to have lower sales, fewer employees, smaller payrolls, lower profits and higher closure rates. In addition, a new report conducted by Black Enterprise concludes that — despite the high level of spending by African Americans — there are still 75 corporations out of America’s top 250 largest companies that lack Black representation among their board of directors.
The presence of Black people is so necessary. If we are not there, who is going to speak for us; How will our stories be told?” said Virginia Monet King, an associate of the Association of Public Health Laboratories. African Americans must do more to “make sure we make our own decisions.”
The economic recession has also majorly impacted loans to Africans Americans by the U.S. Small Business Administration. SBA is a crucial part of financing for entrepreneurs in starting, buying or expanding their businesses.
“Many Black business owners capitalize their businesses based on equity in their homes,” said Johns, According to an analysis by the Wall Street Journal, Black owned small businesses once received 8.2 percent of all loan money through SBA. That figure is now down to 2.3 percent while the Hispanic demographic remains steady at 4.7 percent.
Johns stressed that the key to overcoming is education and perseverance, with African- Americans maintaining in each arena. “We can’t let [anything] stop us. We must make a way out of no way.”
This article originally published in the April 28, 2014 print edition of The Louisiana Weekly newspaper.
