Before the recession, black-owned businesses boomed
By Jia Lynn Yang and Hamil Harris,
The number of black-owned businesses grew much faster than the national rate during the five years before the recession began, according to data released Tuesday by the U.S. Census Bureau.
The ranks of black firms shot up more than 60 percent from 2002 to 2007, compared with the overall national increase of 4 percent. By the end of the boom, Prince George's County had the highest share of black-owned businesses - 55 percent - among all large counties in the nation.
Less clear is how those firms fared after the recession hit. The Census Bureau did not offer any information on how minority-owned businesses did after late 2007, when the economic downturn began.
Richard Clinch, a University of Baltimore economist, said that although the number of black-owned firms in the Washington region probably declined over the past couple years, the damage was likely limited because a high volume of government contracts kept business flowing to these companies.
Clinch said the government also maintains a program that tries to send more contracts to minority-owned small businesses, an effort that should have acted as a buffer during the downturn.
"The numbers are almost certainly lower in PG County, but they would not have fallen off precipitously because federal contracting hasn't fallen off," he said.
Other experts said that as people lost their jobs during the recession, many started their own businesses.
"In the recession there are many people who have retreated to entrepreneurship, trying to find ways to survive if they've been laid off," said Marc H. Morial, president and chief executive of the National Urban League.
At an office park on Arena Drive in Largo, black-owned businesses touted their ability to weather hard economic times.
Louvenia Williams, chief executive of Corporate Title, said the key to survival during the recession was an old principle of being frugal during good times. "When the market was good and I had discretionary income, I held on to it. I just didn't spend the money," said Williams, 57, who runs a commercial real estate company.
Wayne Thornton, chief executive of the Corvus Group, said his firm, which handles corporate real estate, actually thrived during the downturn.
Last year Corvus handled 170 loans from two major projects that were worth more than $5 billion, according to Kevin Washington, the firm's vice president.
"Prince George's County is a nest for minority professionals because you can actually see examples of success," Thornton said.
The report from the Census Bureau found that the majority of black firms across the country are small businesses. Out of the companies surveyed, 87 percent of them earn less than $50,000 a year.
The government's data also ranked the number of black firms by state. New York had the largest number of black-owned firms, about 11 percent of the state's businesses. George and Florida were second and third, respectively.