"American Dreamers"-Expert Opinions
Monday, January 21, 2008SUSIE GHARIB: So what does it take to start and grow a successful minority- owned business? I talked to three experts: Thomas "Danny" Boston, a professor of economics at Georgia Tech and CEO of a research firm that advises small businesses; Lisa Price, she's the founder of Carol's Daughter. It's a company that produces upscale beauty products; and Alan Hughes, editorial director at" Black Enterprise" magazine. I began by asking Alan what are the key characteristics of a great entrepreneur?
ALAN HUGHES, EDITORIAL DIRECTOR, BLACK ENTERPRISE: Well, it has to be stick to it-iveness because there's going to be a lot of people telling you you can't do it. There's going to be as lot of banks telling you you can't have the money. There's going to be a lot of negative things that you're going to have to face and overcome. So at the end of the day, you have to be prepared for that and just stick to your guns and be sure that what you have is going to work and is going to be a viable business and just run with it.
GHARIB: Lisa, you're a very successful entrepreneur, what do you think is the single most important ingredient to success?
LISA PRICE, FOUNDER, CAROL'S DAUGHTER: Believing in yourself and not allowing too much influence from the outside to deter you from your goals. A lot of times you can be your own worst enemy. So you really have to be strong about what you believe in, learn about what it is that you're doing so that you're fully informed, but you really have to believe in yourself and trust yourself.
GHARIB: Danny, you've created an index that tracks successful fast- growing minority businesses. What is the common thread behind all these success stories?
THOMAS BOSTON, ECONOMICS PROF., GEORGIA TECH: It's, in addition to what they just said, it's innovation and it's creativity, particularly in the current market. You have to be able to create a market space in a product and a service that's different from other competitors. And so those who are able to be creative are doing that and have the discipline and stick to it-iveness are those who are successful.
GHARIB: Danny, what challenges do you see facing minority entrepreneurs and what do they have going for them? What's on the positive side?
BOSTON: On the positive side, is that there's such a tremendously fast-growing market, both in the minority community and among minority entrepreneurs. One out of every two companies that were started over the last decade is owned by a minority. So the business sector is growing along with the population. So that's on the positive side. And there are, of course, all the challenges. The challenges related to income within the community. It relates to access to contracting opportunities in the government sector and private sector. So there's still those persistent challenges, some of which are related to discriminatory barriers and some related to networks.
GHARIB: Alan, do you agree with that or is there anything you'd add to the list?
HUGHES: I agree that the largest challenge has got to be access to capital. And while there's still -- and as Danny will agree -- there's a lot of minority businesses that are being started up. However, they're still failing at a really high rate and a lot of it has to do with managing their income cash flow as well as getting access to that capital.
GHARIB: Lisa, some people would say it doesn't matter if you're a black-owned business or any other kind of business, that the bottom line is do you have a good product and do customers want it? Do you agree with that?
PRICE: I agree that having a good product and most importantly having great customer service is key regardless of your ethnicity. However, depending on what market you're in, being a minority-owned business can be helpful if you have a product or service being given to the community that has not been given to them before. And if it's being presented in a way that hasn't been presented before, then you become a niche and you become the desired thing, the "it" thing so that it works to your advantage definitely. But product and good service is key.
GHARIB: Going back to what you were saying earlier Alan about financing, we all know that financing is one of the tough things for any startup business. Is it harder or easier for a minority-owned business?
HUGHES: Well, a lot of times you have to look at some of the underlying facts. One of them is that African Americans are less likely to own a home. When you're less likely to own a home, you're less likely to have that equity. When you go to a bank saying here's my business, here's my business plan, can I have some money please? They're going to look at things like hard assets and that's where we fall short too often.
GHARIB: Lisa, you did the unthinkable. You raised millions of dollars from celebrity investors like Will Smith and Jay-Z. How did you pull that off?
PRICE: Of course I didn't do it by myself. I have a very intelligent and dynamic business partner, Mr. Steve Stout, who engineered that deal. Steve did a very good job of being able to translate the passion that I had in my brand and in my business and the passion that I have for what I do into something that makes sense on paper, dollars and cents wise. And prior to having investors, we were still able to garner an appearance on the Oprah Winfrey show, the "Today" show. We had lots of press without having a PR firm. So it lets you know that there is something there, there's a buzz there, there's an interest there, because how does this person do this without representation?
GHARIB: Just to wrap it up, Danny, from your experience, what is the most common mistake that minority entrepreneurs make?
BOSTON: I would say not understanding the importance of the brand. And this is the flip side of what Lisa just said. Everything is about branding and branding comes from developing quality associated with your service and product and then being protective of it and growing it so that individuals if they walk in a store they will select that over any other, even if the price is higher and so that's very important.
GHARIB: Lisa, what do you think is the most common mistake and what's the message that you give to young entrepreneurs?
PRICE: Believe in yourself no matter what. Whatever it is that you're starting, believe in it and believe in what you bring to the table with it and don't let anyone take that away from you.
GHARIB: Alan, what's the most important advice that you can give someone starting their own business?
HUGHES: When you can, don't use your own money, use somebody else's, plain and simple.
GHARIB: OK, we'll leave it there, Alan Hughes, Lisa Price, Tom Boston, appreciate it.
BOSTON: Thank you.
