Newspaper Page Text
10
August 17, 1995
The state of black business
Service sector offers most promise for black entrepreneurs
The following is based on data
from the publication Outlook For
Georgia’s Minority-owned Busi
nesses 1992-1993. The trends dis
cussed still hold for the present
according to the study’s author
Dr. Jeffrey M. Humphreys of The
Selig Center for Economic
Growth.
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Bound to Georgia’s overall
economy, which slightly
underperforms the nation’s, the
overall outlook for minority
owned businesses is less than
optimistic, bound according to a
report by the Selig Center for
Economic Growth.
In such a climate, the three
economic sectors in which Geor
gia’s minority-owned businesses
are highly concentrated face un
stable, unpredictable times.
Topping the list of minority
owned businesses are services,
47 percent; wholesale and resale
trade, 20 percent; and construc
tion. 12 percent.
Service Businesses
Although the outlook for most
service businesses is promising,
subsector outlooks vary substan
tially. A few service business
categories will expand greatly,
many will expand modestly, and
still others will stagnate or de
cline. Despite these variations
in success predictability, the ser
vice sector generally offers the
best opportunities for the minor
ity entrepreneur.
Collectively, health services
constitute the state’s largest
growth industry. General fac
tors favoring further expansion
include: 1) the rapidly expand
ing elderly population with its
relatively high per capita con
sumption of medical services 2)
middle-aged babyboomers’ in
creased health care demands 3)
greater demand for health and
rehabilitative services to main
stream the handicapped and
mentally retarded 4) rising de-
e
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Business Focus
Georgia’s minority-owned businesses
are highly concentrated in just three
economic sectors: services (46.6 percent),
wholesale and retail trade (20 percent)
and construction (11.5 percent).
mand for elective procedures,
such as routine physicals and
cosmetic surgery 5) escalating
demand for health care services
for AIDS patients 6) medical and
scientific advancesthat save and/
or prolong life, thereby creating
demand for new services and 7)
an increasingly litigious atmo
sphere that spurs defensive med
ical practices.
However, the following factors
are among those that limit fur
ther expansion of health servic
es: 1) rising prices 2) increased
use of living wills 3) limited ac
cess to affordable health insur
ance 4) cutbacks in employees’
health benefits 5) tight govern-
The outlooks for
outpatient facilities,
home health care,
hospices, geriatric
care, medical
laboratories and
speech therapists
are especially
promising.
ment budgets for health services
and 6) intense political pressures
to contain health care costs.
With these ruling factors, the
outlooks for outpatient facilities,
home health care, hospices, geri
atric care, medical laboratories
and speech therapists are espe
cially promising.
The outlook for child day care
services is good, with the in
creased participation of young
mothers in the labor force.
Consumers’ spending for beau
ty and barber shops and laundry
services are likely to pick up.
Minority-owned photography
studios, income tax return prep
aration services, funeral servic
es, carpet and upholstery clean
ers should all post modest year
over-year gains.
However, consumers may not
have sufficient discretionary in
come to spend aggressively for
such nonessentials as dating ser
vices, diet workshops, hair weav
ing or tuxedo rentals.
The long-term outlook for mi
nority-owned consulting and re
search firms supplying technical
expertise is excellent. Business
operations and decisions will
become increasingly complex,
and the costs of maintaining a
full range of in-house experts
will not decline. In good times
consulting and research busi
nesses will do very well, but dur
ing bad times, outside experts
are likely the first casualties of
the budget ax and the last to be
rehired.
Retail Businesses
Although many Georgians
have the means, some lack the
will to spend more freely because
of a rapid deterioration in confi
dence. Improving sales will come
only when consumers’ expecta
tions turn upward.
The aging of the population,
leading to a decreasing propor
tion of young shoppers and an
increasing proportion of middle
aged and retired shoppers, af
fects both the mix of goods that
are purchased and the supply of
workers. This trend will damp
en the sales of junior clothing,
trendy fashions, start-up home
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appliances, sports cars and oth
eryouth-oriented products. Con
versely, this trend favors the
sales of products more often pur
chased by more mature shop
pers.
Technology allows many work
ers who once were tied to an
office to work out of their homes.
As a result, retail sales of office
furniture, office supplies and
casual clothing should increase.
The demand for business attire
The retail shake-out
that began in 1990
will continue, with
firms’ expansion
coming mostly
at the expense of
competitors rather
than through market
growth.
will diminish, as well as the fre
quency of business lunches.
Single adults without children
are a rapidly growing market
segment. Such consumers pre
fer to buy perishable commodi
ties in small portions and fre
quently eat meals away from
home. They tend tospend lesson
home furnishings, larger home
appliances and home repair and
improvement items. Singles will
probably spend more of their re
tail dollars on luxury and enter
tainment-related goods.
Despiterecent casualties, most
markets remain oversupplied
with retailers. Accordingly,com
petition for market share will
intensify. The retail shake-out
that began in 1990 will continue,
with firms’ expansion coming
mostly at the expense of compet
itors rather than through mar
ket growth. Ultimately, the re
tail market will be more consoli
dated but highly segmented.
Although some of the best re-
Continued on next page
Business League
From page three
leg work for the Business League.
It’s up toustomake sure that the
visibility is there, but through
that, we end up confusing the
two organizations.”
To keep the contract with the
Department of Commerce,
AMBDC must service 112 cli
ents for each contract year.
The bulk of these services con
sists of providing loan packag
ing, doing marketing and feasi
bility studies and helping to se
cure contracts with private and
public sectors.
The Business League has a
membership of area businesses
that meets monthly for network
ing opportunities.
Business plans provided by
AMBDC could mean the differ
ence between getting abank loan
and being turned down to start a
business.
“It’s a difference when you go
in to buy a house and when you
go in to start a business,” Ms.
McKie said. “When you go in to
buy a house, they know you’re
going to pay the loan back be
cause you want to live in that
house, butbankers don’t feel that
people put as much into repay
ing abusinessloan as they would
a house note.”
Forassurance, bankersrequest
Winn-Dixie declares
annual dividend increase
Jacksonville, FL
Winn-Dixie Stores, Inc., the
nation’s fifth largest retail food
chain, increased its cash divi
dends for the 52nd consecutive
year. The new dividend rate of
14 cents per share per month or
$1.68 per year represents a 7.7%
increase over the previous rate
of 13 cents per share per month
or $1.56 annually.
“We are pleased to increase
our dividend and continue our
New York Stock Exchange record
of 52 years of consecutive divi
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a business plan from the appli
cant showing such things as a
well-thought out idea, a market
description, and details on one’s
background.
“If you cannot provide this in
formation, then that means you
have not seriously thought about
going into business,” Ms. McKie
said.
AMBDC works closely with
bankers by encouraging them to
send applicants to their office so
they can helpthem become bank
able.
The Community Reinvestment
Act, which requires banks to
spend a certain amount of mon
ey in minority or low-income ar
eas, and banks’ changing atti
tudes are making it easier to get
loans than it was in the past.
However, a poor personal credit
history makes a “sticky situa
tion,” Ms. McKie said.
“A lot of people who come
through here have a great idea,
but they have not handled their
credit in the past,” she said.
But many banks are still will
ing to work with such people by
giving them a lower line of cred
it, such as SIO,OOO instead of
$50,000, with an opportunity to
build.
“Banks are so sensitive to the
minority community that they
don’t want to just turn people
down,” Ms. McKie said.
dend increases,” Mr. A. Dana
Davis, chairman, announced.
The board declared a regular
monthly dividend of 14 cents per
share on the common stock of the
company payable on August 1,
September 1 and October 2 to
shareholders of record atthe close
of business July 17, August 15
and September 15.
Winn-Dixie, the Sunbelt’s larg
est food retailer, operates 1,177
supermarketsin 14 states andin
the Bahamas.