Good Evening Family, Friends, Colleagues and Faithful Haters,
I hope everyone is enjoying the holiday, snow and days off.
I write today with good news about my blog, I'M HATIN'. It was recently picked up by NV Magazine, a national, bi-monthly
business magazine for urban professionals, entrepreneurs and forward thinkers. As a new columnist for NV, my rants and raves will be featured in their NV NCorrect section of the magazine and it's website, dishing out my opinions and unique views (HATIN' style, of course) on current events and topics of interest.
Check out my first blog post/column below or by following the link to NV's website:
http://www.nvmagazine.com/index.php?option=com_idoblog&task=viewpost&id=308&Itemid=0
I want to thank everyone for their continued support, blog ideas and following of the blog, it's appreciated more than you know.
Sincerely Yours,
Jennifer Chapple
Keep On HATIN'
I’M HATIN’: Because Black Business Enthusiast Aren’t Playing with a Full Deck... Just Race Cards
Black business, white business, Asian
or Hispanic; The younger generation of business leaders and executives only see one color… GREEN.
*Insert infamous “Love of Money”, Pink Floyd lyrics here*
Let me preface this column/blog post by saying I work for a black-owned business. So, theoretically, I wholeheartedly believe in the usefulness and need for black-owned companies and enterprises, seeing that that’s where my proverbial “bread and butter” comes from. But, in this ever-evolving world we live in and with the emergence and adoption of the “post-racial society” concept, it’s understandable that businesses and consumers, alike, find no REAL reason to think black... especially over mainstream or other minority groups, for as far as the new America is concerned, race and color are a non-issue.
This fact doesn’t make buying black a racial issue, but an evolution issue and your confusion of the two, Black Business Enthusiast (BBE), is why I’m HATIN’.
There are a few reasons, from what I can gather, why black-owned companies are struggling for support and receiving very little consumer and business cooperation or attention, including:
- The now, socially acceptable “No Such Thing as Racism” attitude
- Black business owners not having majority control, and
- African Americans not bred to support their own.
Let’s break this down, shall we?
First let’s begin with the definition of a black-owned business and the argument for keeping black money in black hands.
A working definition of a black-owned business is a proprietorship, partnership, corporation or joint-venture that is 51% owned, operated and controlled by United States citizens who are members of the African American racial group. Ownership is defined as the owner of record having control of 51% or more of the company's voting shares, and control of the day-to-day operations.
Preliminary Estimates of Business Ownership by Gender, Ethnicity, Race and Veteran Status: 2007, from the U.S. Census Bureau's 2007 Survey of Business Owners found that there were approximately 1.9 million black-owned businesses in 2007, up 60.5 percent from 2002. Receipts of these businesses totaled $137.4 billion, up 55.1 percent from 2002.
In 2007, 37.6 percent of black-owned businesses were in health care and social assistance, repair and maintenance, and personal and laundry services.
Now that we understand more about black business, let’s examine the black consumer.
Target Market News estimates the African-American population of the U.S. at 41.1 million, with a buying/spending power of $803 billion (2008). The top five expenditure categories, in which African Americans most frequently purchase, include, Housing ($166.3 billion), Food ($65.3 billion), Cars/Trucks ($31.5 billion), Clothing ($26.9 billion) and Health Care ($23.9 billion). With a spending power like this, it’s no wonder why BBE’s want to keep black money within black communities. Intent is admirable, at best, but execution is all wrong.
As I stated above, the concept of race in the business place has changed, and if black-owned companies want to compete, not just for black dollars but everyone’s business, it will have to evolve its business model and practices. This is evident in the decision of fast food conglomerate, Burger King’s recent move to pare down its marketing and advertising assignments, officially letting go UniWorld Group, the agency of record for its African-American branding efforts, and LatinWorks, agency of record for Hispanic marketing. Myself, columnist from the New York Times and Wall Street Journal all agree that this change within the company is indicative of a trend that has taken off, full-speed, as younger consumers, who are often less likely to use traditional labels of race and ethnicity, have become more of a force in the marketplace and in terms of spending power. As a result, advertisers are folding minority departments into their own organizations or only accepting bids from companies who appear diverse.
Mike Kappitt, chief marketing officer, Burger King North America, said that the company was making the change “based on where our consumer is” and particularly when considering “the X and Y generations” and their beliefs in the “melting pot.”
To add salt to the wound, Burger King also announced that it intended to have its African-American ads be created by Wunderman (a white firm, who has been their agency of record for “mainstream” advertising) and its Hispanic advertising done by Crispin Porter & Bogusky (yup, you guessed it... also white).
Of course, black business owners were outraged.
Janice L. Mathis, vice president and counsel, Rainbow PUSH Coalition, said "the remarks attributed to Burger King's chief marketing officer, Mike Kapitt are so inappropriate that we believe there must be a better explanation of the company's recent advertising decisions."
Mathis went on to say, "There is something deeply troubling about the assumption that white agencies can communicate with everyone and black and brown agencies can communicate only with racial and ethnic minority customers. If there was going to be a change, minority-owned agencies should have been invited to compete for the general market business.
Is it fair for Burger King to change firms... YES. It’s their money and they can do with it, what they see fit.
Do black business owners have a right to be upset? Sure. But, it doesn’t alter the fact that they are being put out of business as a result of being pigeonholed to a niche market, and instead of crying about the loss of a contract should be figuring out their competitive advantage in the new marketplace.
Moving on...
Our second issue pertains to black-owned firms, which, after becoming popular and profitable, do not retain its black-ownership status. This is where we talk about the sell-outs. Below, I pulled up a short list of well known, formerly black-owned companies that are now corporate subsidiaries.
- Rocawear – Bought by Iconix in 2007 for $204 million
- Phat Fashions – Bought by Kellwood in 2004 for $140 million
- Soft Sheen – Acquired by L’Oreal in 1998 for an unreported sum, estimated to be around $160 million
- Burrell Communications Group – Merged with Publicis Groupe in 1999
- Translation Consulting and Brand Imaging – Acquired by Interpublic Group in 2007 for a reported sum of between $10 and $15 million
- BET – Acquired by Viacom for $2.34 billion in 2000
- Essence Communications Partners – Acquired by Time Inc. in 2005 in a transaction reported to be valued $170 million
Visit the Atlanta Post online for more information about the mergers listed above. Link: http://atlantapost.com/2010/07/07/7-businesses-that-went-from-black-owned-to-corporate-subsidiaries/7/
I ask, to my BBE’s, are we to still continue patronage of these companies? What about companies who are black-owned but not black operated? The definition I gave above clearly added the operational element to the argument. Are these companies worthy of conducting business with or should we outcast them to the mainstream and away from our niche?
My biggest complaint with those who take the pro opinion on this subject is how do we ever know/designate if a company is “black enough.”
This leads me into my last and final point regarding African Americans not being trained and educated to support their own, both as consumers and business entities.
It’s the long-heard tale about crabs in a barrel; the cyclical event where one tries to climb to the top and is pulled down by the others.
We, as African American people, do NOT encourage self-preservation. We do not effectively initiate our own “buy local/buy black” initiatives. We tend to go to everyone else for everything we need, specific to our lifestyle. And worse, if ever scorned by an African-American business owner/vendor, vow to never do business with anyone of our race, ever again. EVER!
This is a problem and I suggest that my black business enthusiast get behind the root of this issue as opposed to trying to put out fires, everywhere, caused by elements out of their control.
Power to the HATIN’
