There is a rich history of contributions made by African Americans in sports and entertainment, however, we sometimes forget about the black business pioneers who created jobs for thousands of individuals and helped transform entire communities. Fast-forward to today, there is still a large number of African Americans starting their own enterprises. A recent study found that blacks were more likely to start a business than whites.
Another study found that blacks possessed above average levels of confidence and optimism (as compared to other groups) which are associated with higher rates of early-stage entrepreneurship. All positive signs!
Yet, those same studies also suggested that African Americans are more likely to fail than whites in the early stages of the entrepreneurial process. One reason for this troubling finding may be that black communities more frequently lack a framework to create successful entrepreneurial role models, and possibly a lack of support and resources.
The value of modelled behavior and exposure to positive images is a significant contributor to one’s success. It has been argued that the lack of African-American traditions in business knowledge hinders intergenerational transference in business ownership.
Many of us have never heard of former slaves such as John Merrick and Alonzo Herndon, who despite facing poverty and racism, managed to become founders of successful companies (North Carolina Mutual Life Insurance Company and Atlanta Life Insurance Company, respectively) that are still in existence. Another noteworthy individual is Charles Clinton Spaulding, an individual who managed the NC Mutual for 52 years from 1900 to his death in 1952. Spaulding at that time was seen as one of the greatest business executives in America and he is currently recognized by Harvard University as a “Great American Business Leader.”
Here at Clayton State, I educate my students about the contributions made by African-American business pioneers. For example, in my Management Principles class, students learn about Charles Clinton Spaulding’s Four Cardinal Points of Entrepreneurship, which he wrote in 1937:
- Character: Individuals need to understand that ethical businesses tend to be the ones that are admired and supported by employees and customers alike.
- Fundamental Business Principles: Prospective entrepreneurs should have knowledge of the market and industry before launching a venture.
- Cash or its Equivalent: By leveraging other forms of resources, which are needed for the survival of the venture, entrepreneurs can reduce their dependence on loans.
- Social Service in Business: Entrepreneurs should focus not just on making a profit, but also making a positive difference in their community.
Thankfully, some textbooks are now including the contributions made by Spaulding based on the research I have co-authored with Dr. Simone Phipps, associate professor of management at Middle Georgia State University. Spaulding’s business writings are still useful to individuals today, including our students at Clayton State University.
It is also necessary to continue to provide support to our students. We are fortunate to have an Entrepreneurship Club within the College of Business where students can share ideas and collaborate. The Center for Entrepreneurship and Innovation provides opportunities for our students to compete in elevator pitch competitions for prizes, and the Small Business Development Center (SBDC) is another important resource they can utilize in order to get expert advice that will aid in the survival of their business. Those forms of support are helpful to our students.
And while the high failure rates of black businesses are troubling, it remains necessary to educate African-American students about the rich legacy of success within the black business community, and to provide support to them on campus to help them pursue their entrepreneurial dreams.
By Dr. Leon Prieto, Associate Professor of Management
Photo caption: The staff of the Atlanta Life Insurance Company Branch Office, ca. 1925. Photo courtesy of The Herndon Home.