Black-owned businesses carve a niche: Many struggle to overcome financial, social obstacles
More than four decades after Martin Luther King Jr. said he refused to believe there are "insufficient funds in the great vaults of opportunity of this nation," black-owned businesses in the Binghamton area remain a small but important part of the region's economy.

The biggest challenge for any entrepreneur -- regardless of race -- is obtaining enough money to start, maintain and grow a business, said Douglas Boyce, regional director of Binghamton University's Small Business Development Center.

Billie Anderson of the Black and Minority Coalition, administered by Opportunities for Broome, agreed, but noted that minority entrepreneurs sometimes face unique obstacles, such as social and economic factors and possible discrimination, that can hinder their success.

But Binghamton business owners Kristi Potter, Kenneth Hawkins and Michelle Hawkins found ways to make it work.

Each are at a different stage in the process of owning their own business -- one is just starting out, another has kept her doors open for more than a decade, and the third is in between -- but all are committed to fulfilling dreams of being their own bosses and reaping the benefits of entrepreneurship.

* Potter, 35, opened Klassy Nails in 1994 when she was in her early 20s. The nail salon, at 16 Leroy St. since March 2005, also sells jewelry, soaps, lotions, purses, candles, pottery and other items. Potter worked at an area beauty supply distributor before deciding to open her own business.

"I just decided to go for it," she said. "If I'm going to put the hard work into it, I might as well reap the benefits instead of somebody else. I just did it. I didn't even think about it."

* Kenneth Hawkins, co-owner of New York Styles of Binghamton, said he loves cutting hair and "making people feel good about themselves" by enhancing their appearance.

"They come in with a hat and glasses on and leave with nothing because they like the way they look now," Hawkins, 32, said. "They come in with a mask and leave (as) themselves."

Hawkins, a self-described entrepreneur since age 16, said opening the barbershop at 33 Pine St. in September 2005 brought him the "comfort" and "peace of mind" of self-employment.

* Michelle Hawkins, Kenneth's wife, opened Envy You salon and boutique at 140 Front St. in April 2006.

"When you work for somebody else, they tell you what you can and cannot do," said Michelle Hawkins, 28, a former makeup artist with a long career in retail. "I wanted to be my own boss. I work harder now, but it's more fulfilling. ... I knew in my heart this was what I was supposed to do. I knew I could make it work."

Potter and the Hawkinses are among the few minority entrepreneurs to open businesses -- and keep them open -- locally, according to Census records.

While the number of black-owned businesses in New York totaled about 129,000 in 2002 -- an increase of 50 percent over five years -- in the Binghamton area, the figure is so low that the U.S. Census Bureau suppressed local estimates in its most recent survey of business owners because publication standards were not met.

However, Empire State Development includes 22 Southern Tier businesses in its database of certified minority and women-owned enterprises. The certification gives business owners an advantage when marketing goods and services to state agencies and contractors and allows access to special loan and bonding programs, as well as other assistance.

And Boyce said the SBDC provided some form of assistance to 27 black entrepreneurs last year, down from 34 black entrepreneurs the year before and making up about 6 percent of total entrepreneurs who received help. Six of the 27 started businesses, he said.

"Of all the people who are starting, we only see a small percentage. We're seeing fewer clients overall" because of an increase in the number of organizations that help entrepreneurs, Boyce said. He added that some entrepreneurs don't seek help from groups such as the SBDC.

Across the board, regardless of race, one in four SBDC start-up clients typically end up opening businesses, he said. "There is a disparity there," Boyce said.

About half the time, clients in general change their minds about opening a business after learning more about what it takes, Boyce said. Some clients also decide that their initial idea isn't as feasible as they had hoped, he said. "The biggest challenge that faces any entrepreneur regardless of race is going to be funding," Boyce said.

Anderson said "minorities don't get the credit as readily as other small businesses" and therefore may not approach lending institutions for loans because "they know they're not going to get them."

"Most start with their own funds," she said. "There isn't any other way. You can't get a loan. You can't get this. You can't get that. Some people just have bad credit."

Federal Reserve Bank of Chicago President and Chief Executive Officer Michael H. Moskow supported some of Anderson's claims at a 2005 conference for women- and minority-owned businesses.

"Businesses owned by women and minorities remain relatively small, undercapitalized and under-represented in the more capital-intensive sectors of the economy," he said. "Greater access to capital and credit are widely reported to be the No. 1 obstacle to faster growth of these firms, with greater access to opportunities in the corporate supply chain a close second."

He cited data from the Federal Reserve's most recent Survey of Small Business Finances:

* Black-owned firms tend to have younger owners who have fewer years of experience and poorer credit histories.

* Firms owned by minorities, particularly those owned by blacks, are far less likely to obtain credit from financial institutions, even after considering differences in size, maturity and invested capital.

* Minorities tend to be undercapitalized relative to other businesses.

"Any firm with limited access to capital and credit faces limited opportunities," said Moskow, adding that minority ownership tends to be concentrated in industries such as services and retail trade where capital expenditures for equipment are very low.

Potter and the Hawkinses proudly said they relied on their own money to start their businesses and didn't receive economic development grants or other financial assistance from institutions.

"I took all my savings," said Michelle Hawkins, who added that she also didn't seek help or advice from a small business advocacy group. "Anything that I learned, I read or got from my husband. I would get on the Internet and look everything up."

Her previous work experience in retail and support from family members also helped, she said.

Potter said she wishes she would have taken advantage of some programs available to help business start-ups. She said she was too busy building her business.

"It's basically a marriage. You've got to commit to it," she said. "I ended up working a lot more. I would work anywhere from 50 to 60 hours a week. It wouldn't be nothing to work a six-day work week, easy. ... If you have to sacrifice, you sacrifice. You do what you've got to do to make it."

Despite the hard work, it's been fun, she said.

"Regardless of your racial background, you've got the same problems in small business as anyone else," Boyce said. "You've got to have a product that people want, and you've got to get them through your door."

Looking back, Kenneth Hawkins said he wouldn't change a thing about his path toward owning a barbershop.

"There's always things that try to become obstacles," he said. "You don't let nothing stop you from pursuing it. ... If you plan thoroughly, none of those setbacks will affect you. Plan ahead and keep a financial cushion."

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