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Growth of black-owned businesses slow in South Carolina
By Dennis Quick
Senior Staff Writer
Dwayne Green and his wife, Toya Hampton Green, founded their Rutledge Avenue law firm, Hampton Green LLC, in 2001.
In starting the firm, Green was imbued with an entrepreneurial spirit he inherited from his uncle, a Charleston business owner.
He also received help and encouragement from the city’s Minority Business Development office, which offers business planning guidance, management skills counseling and other services to assist upstart as well as experienced business owners.
Five years later, the Greens’ law firm, housed in a renovated building that once served as a retail store, is seen as a landmark of a predominantly black neighborhood that is undergoing revitalization.
That Hampton Green LLC is a black-owned business makes it a relative rarity not only in the Lowcountry, but also in the rest of the state, Green admitted.
Struggling numbers
Between 1997 and 2002, the number of black-owned businesses in South Carolina grew 23% to 28,613, according to a Census Bureau report released in April.
In 2002, the tri-county area had 4,466 black businesses, 31% more than in 1997.
Yet the state’s growth of black businesses lagged behind the national rate. During that same period, the number of black-owned businesses in the United States increased by 45% to 1.2 million.
And although blacks comprised 30% of South Carolina’s population in 2002, only 9.8% of South Carolina businesses were black-owned. Black-owned businesses accounted for a mere 1% of sales within the state.
Green attributes South Carolina’s lack of black businesses to obstacles blacks historically have faced in accessing capital and resources to start businesses. He added that many young blacks bitten with the entrepreneurial bug have left South Carolina.
“A lot of black entrepreneurs see greater opportunities in larger metropolitan areas like Atlanta and Charlotte,” he said.
In 2002, Georgia and North Carolina were among the top 10 states with the most black-owned businesses, according to the Census Bureau. Georgia had 90,461 black businesses while North Carolina had 52,122.
New York, with 129,324 black-owned businesses, ranked first. The remaining Top 10 states included California, Florida, Texas, Maryland, Illinois, Michigan and Virginia.
The overwhelming majority of the nation’s black-owned businesses are small, with 92% having no employees other than the owners. By comparison, about 75% of all U.S. businesses had no employees.
Green noted that the Lowcountry’s black law firms, which he estimates to be fewer than 10, are all small, with none having more than three attorneys.
Cash, collateral, credit
Patrick King, Charleston Citywide Local Development Corp.’s loan officer, said when aspiring black entrepreneurs fail to get a loan, the issue is not race but rather cash to inject into the business, collateral and credit, which are the three factors that often hamper loan applicants regardless of race or sex.
He added that 44% of the loans he has granted during the past fiscal year have gone to “women of all colors” and 35% to black men.
Tim Scott, a Charleston County councilman and a black entrepreneur who owns a local Allstate insurance franchise and a consulting firm, said starting a business is difficult for anybody with shallow pockets.
“The fewer resources you have, the fewer contacts you have, the harder it is,” Scott said.
Scott started his insurance business seven years ago with the help of a $40,000 investment from a black businessman whom Scott calls “a strong, solid mentor.”
In addition to having a mentor, a strong banking relationship is key to launching and maintaining a business, Scott said.
Despite the numbers indicating an increase in black-owned businesses in the Lowcountry, many young blacks have the perception they face too many obstacles in starting a business here, Green said.
The reason for that perception, he pointed out, is that they see few black business owners and few flourishing black businesses.
“It’s hard to emulate what you can’t see,” Green said.
Dennis Quick is senior staff writer for the Business Journal. E-mail him at dquick@charlestonbusiness.com.
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