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Raising level of black economics changing the paradigm

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How Black Business can b e seen as a vital economic engine in our communities

How Black Business can b e seen as a vital economic engine in our communities

Published in: News & Politics

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  • 1. ABL Changing the Paradigm about Black Business Introducing “Community Economic Value Add” (M) (CEVA (M) ) A Presentation by: Joseph R. (Uncle Joe) Hudson The Hudson Strategic Group, Inc. 770-994-4466 www.hudgroup.com
  • 2. “Any group that does not have aneconomic structure is heading fortrouble. The groups that hold the most control over their financial,human capital and markets will be the most competitive groups.” Washington Post, May 25, 1998
  • 3. CEVA (Community Economic Value Add)The idea is that value (real or perceived) iscreated when the return on the entirecommunity opportunity for stabilization andgrowth is greater, through an activerecognized strategic approach, than thenegative impact of allowing our inner citycommunities to lie fallow awaitinggovernment largess.
  • 4. ABL Advocate for Building our own Economic BaseBuilding a Black business economic base: • Doing business with other Black•Our way of Paying our Economic Rent businesses who do the same • Philanthropy and giving to Black•Rent from Business and community owned and community locatedsupport our ROI institutions•Recognition of the Economiccontribution to the entire community Effort designed to GROW our Black and Entire Community through:•Community Leadership • Providing a Return on InvestmentWe pay our rent by: (ROI)--Business and Economics•Hiring local People contributions • Political support and leadership•Collecting and Paying Taxes (Payroll, • Churches-- supporting the socialSales, Unemployment, etc.) network• Serving as Sales/Collection Agents for • Civic & Social—leadership andGA Lottery and other Statewide support for important community-initiatives wide objectives • Philanthropy --supporting the non- profit community
  • 5. Each Congress Works on1. Changing the Paradigm through the recognition and articulation of the Black Businesses Economic Value2. The development and expansion of ideas that demonstrate and support the notion that Black business are an Economic Engine within our communities and cities3. Developing Strategies to do something about our communities economic conditions utilizing Black businesses
  • 6. What We’ve Learned from Past Congresses• Black Community and Black Businesses as an Asset are UNDERVALUED!• Politically Black Communities have been used before but never rewarded. --NEEDS TO BE BUILT INTO OFFERINGS• Black Community Undergirds Community Economics-- MAJOR EMPLOYER and Major Contributor of economic benefits WITHIN BLACK COMMUNITY• Need to REPOSITION BLACK BUSINESS from Perception of Entitlement to a Fact of Asset Value with a Return on Investment.
  • 7. Moving Forward--New EffortsBring Program and Outcomes into modern era.•Old conversation borne in civil rights era aroundsocioeconomic principles-hard to except andappears to be entitlement and doesn’t appear todo anything for the good of the order.•New conversation –Changing the Paradigm mustarticulate the VALUE and economic benefits ofsupporting Black business•A different Investment Strategy that positionsBlack businesses as important community economicengines driving community development as a resultof their Transactions
  • 8. The 5% Solution Spending Investment Strategy Plan for Economic Development 1.Goals/ 2. 3. 4. 5. Increase timesOutcomes dollar turns 5% per Increase marketing of Business Develop a method Black Businesses Arrange financial year to control our land resources forDesired and real property form alliances Black Business ProvideCustomer Value for Provide Assure services and Help Increase competitive/Community investment quality goods market share and Fair products that and services Pricing reflect actualExpectations ROI needs Locate inBusiness Operate Provide top Know Have areas A willingness Professionally level customer adequateMust Perform Expertise needs cash-flow accessible to to collaborate customerWellResource Black Business to Black Business to Black Business to/Community Consumer Black Business Black OrganizationAdjustments 8
  • 9. Overcoming the Stakeholder Fatigue of Past EffortsFatigue is the result that happens when you make anoffers using words that describe something that people associate with lack of benefitor pain. When that offer is repeated over and over with the same offensive words—People become non-believers or fatigued our Communities are FATIGUED when itcomes to Black Business development and leadership!! Therefore, any new Offer must be Reframed declaring a different type of success that is easily recognized with new benefits understood Not just in Word, but in Fact
  • 10. Changing the ParadigmFrom:•Negativity•Favoritism•Unearned supportTo:•IMPORTANT ECONOMIC CONTRIBUTORS &NEW LEADERSHIP•COMMUNITY ASSET THAT IS NOT JUSTSUPPORTED BUT REQUIRED!•WISE INVESTMENT WITH IDENTIFIABLERETURNS
  • 11. New Expectations• A Return on Investment Strategy (ROI) leading to an INHERITANCE for Future Generations and Better Communities• The Acknowledgement that BLACK BUSINESSES PRODUCE ECONOMIC RETURNS. Economic Returns that can be Recognized by ALL Parts of Community• ROI Approach recognizes that Spending with Black Business is an really an INVESTMENT not an entitlement with returns that lead to the achievement of Community Economic Value- Add (CEVA)
  • 12. The Black Community is an Eco- System• Recognizing that the entire community forms an Eco-System that must be considered.• The Eco-System demands an Enterprise- wide view• The Econ-System demands you meet their expectations if you want participation
  • 13. Examples of Major Stakeholder GroupsReturn on Investment (ROI) Expectations 1. Community ROI = Economic Impact (Jobs, Taxes, Services) a) They Invest in Infrastructure, Education, Tax Breaks 2. Investors ROI = $Return vs. $Invested a) They Invest Capitol (Debt or Equity) 3. Employee ROI = Pay and Secure Environment a) They Invest Waking Hours, Commitment (Emotional) 4. Black Businesses ROI= Growth & Development a) They Expect Community Support through Opportunity, Contracts, Business w/each other & the community. b) They take the Economic Risk c) They Expect Respect from the market place
  • 14. Hence we must CHANGE THE LANGUAGE!Around Black business success and Reframe our Value • Example--Change Procurement Outcome (or couple with) to economic indicators – Jobs created – Payrolls – Taxes Paid • Change language about HOW we Speak about OURSELVES to economic—i.e. Gourmet Services is a major employer of Black People with 2,100 employees • Tie outcomes of utilization to driving of economic benefit for ALL i.e. How Black businesses affect the overall success of Atlanta
  • 15. The 5% Solution our ToolSelf-Help--Based on our Spending, Our Money,with Our Businesses and the Economic Returncreated by the spending:•5% more Black Consumer Spending with BlackBusiness•5% More Black Business 2 Black Business Spending•5% More Black Business support of local BlackInstitutions(Could it be More—Sure but let’s get started first!)
  • 16. The 5% Investment Through Spending• Economic Values CAN BE SEEN as important by Almost ALL Atlanta• The DISINCENTIVE of doing business with Black business is MITIGATED by the expected economic return• The idea of an INVESTMENT THROUGH SPENDING creates a Black Business Leadership approach to total community economic development not just what will the government or others do?
  • 17. The 5% Investment Through Spending (The 5% Solution)• Can articulate a Competitive Advantage for Black and minority businesses• Can be expected to produce Economic return/ ROI that ALL can see.• Can be used to “fortify” use rather than ‘justify” use of Black contractors etc.• Demonstrates how the monies funnel down to our communities through Business employment---i.e. can be used to express benefits to community expected from large projects-
  • 18. Use 5% Solution to Create Competitive Advantage• Shared Values--Driving Economic Benefits for ALL• Helps include ALL citizens through job creation as benefactors• Can localize benefits to a particular community• Makes small business an economic engine worthy of support not just conversation• It is Visible to ALL and can be Measured--the Results of Doing Business with Black Firms is a Great Benefit to Atlanta as a whole! It supports what others believe about Atlanta!
  • 19. Our Economic Underpinning of Value Dr. Danny Boston & Dr. Ed Davis • Atlanta #1 Desired location of Black Business • Metro Black Businesses create over 56K Jobs--wo/ Support • 44% of Black business located in high risk areas— underserved communities • 66% of employee reflect ownership-Makes it clear on beneficiary of supporting Black Business • Relationship between job skill levels and job requirements-Not as Challenging among MOST Black Businesses (Employer of Last Resort) • Economic Impact of Black business $24B
  • 20. Re-Framing our success asUndeniable Benefits to Our Cities • 5% Increase in Spending with Black businesses would CREATE 24K jobs with an estimated 18K of them Black People • 5% Increase in Spending Nationally would LOWER Black unemployment from 13.6% to 10.4%
  • 21. 5% SUCCESS!!!• 5% Solution is Proving to be a Success in turning the Dollar over in our Community and leading to economic benefit• Here’s are some examples of how!
  • 22. Selected Data from CurrentSurveyHow successful were you:•30% Extremely•48% Very•22% Not VeryPercentage of Increase•Greater than 5%=48%•3-5%=22%•1-3%=26%
  • 23. Selected Data #BTop 5 Areas of Success•Medical Services=66%•Legal Services=71%•Personal Care—93%•Restaurants=85%•Home Maintenance=66%
  • 24. Selected Data #CAge of respondents•Over 55=56%•Over 65=19%Age of Business•More than 10 yrs=60%Percentage of employees of the businessesbeing Black= more than 84%
  • 25. Selected Data #DIndependent Contractors=64% BlackPercentage of Business we do with withother Black Businesses • 50-75%=35% • 25-50%=25%
  • 26. Selected Data #EPercentage of Business dependent on BlackConsumers • 75-100%=25% • 50-75%=25% • 25-50%=25% • 1-25%=25%
  • 27. What Can YOU DO?• INCREASE your SPENDING with Black Business• Express your BUSINESS SUCCESS IN ECONOMIC TERMS (Result of your Transactions)• Put PRESSURE on other organizations to begin using Economic Terms• Increase your GIVING with Black Organizations• Help ABL and others IMPLEMENT the Plan• STICK WITH IT even if you can’t see the results!• Help us DEVELOP SOLUTIONS and Approaches FOR OVERCOMING this issue
  • 28. We have the “Cash and the Cache”Express our success • How a Spending Investment Strategy produces ECONOMIC BENEFITS that are difficult to deny • DISAVOW language centered around individual achievement USE language of Shared Value achievement • Our HISTORY OF OVERCOMING has shown we are capable of maintaining our communities • The NEW ENTERPRISES WE ARE CREATING & MARKETS provide the underpinnings for future success • We are so much SMARTER AND MORE SOPHISTICATED as business owners today
  • 29. Joseph R. (Uncle Joe)Hudson• Founder & Chairman• Hudson Strategic Group• 6856 Tara Oaks Dr• Riverdale, GA 30274• 770-994-4466• www.hudgroup.com; www.joseph rhudson.com• jrhudson@hudgroup.com