Azita Patton

AskRecy Response.

I'm sorry that it took longer than expected to respond to your email. The volume of questions is endless and sorting out those that will also have an impact to others takes a little time. I recently read an article written by Earl G. Graves, a nationally recognized authority on black business development and the founder and publisher of Black Enterprise Magazine, with a circulation of over 300,000 and a readership of more than 3.1 million. Mr. Graves stated that when he started publishing Black Enterprise Magazine over thirty years ago, the number of black-owned businesses in this country has grown from around 45,000 to more than 621,000.

The top 100 black-owned businesses, tracked in Black Enterprise Magazine had in 1999 annual sales of more than $13 billion. Most of the answers to your questions can be found at www.blackenterprise.com. Also you and your group should read The Network Journal, a popular black professional and small business magazine. Their website is www.tnj.com.

Good luck in your research.

AskRecy

Subject: New Venture
From: CovenantWomanJT

Hello,

I am considering going into business with a partner manufacturing, selling, and installing a new innovative metal, portable deck system. My question is what percentage of the business must I own for it to be a minority business. I am a woman and the partner is a gentleman. Thank you for your time.

Covenant Woman

AskRecy Response:

This question is asked quite often and warrants repeating.

A Minority-owned Business Enterprise is a business that is at least 5l % owned and controlled by one or more minority persons. A minority is generally defined as an individual who is African American, Hispanic American, Asian American, Native American, a Woman or a Disabled person.

There are many specific eligibility criteria for certification; however, four basic rules generally apply; (1). United States Citizenship or US resident alien status, (2) Fifty-one percent ownership by a minority, (3) Proof of effective management of the business such as hiring and firing authority, operating control, and decision-making role, and (4) Control is defined and evidenced by signature role on loans, leases and contracts.

AskRecy Response

The Internet obviously is becoming the preferred and new method for promoting your business and keeping your customers informed. The criteria that search engines and directories use to find your site is constantly changing. There must be a continued and ongoing effort to provide regular postings and press releases to newsgroups, search engines and updates to existing listings. A well maintained website will continually search for newsgroups, post press releases, update postings and build the right traffic to your site by establishing links with related subject sites. You should also design and promote press releases and fax/fliers announcing your web site. First, there must be increased traffic, second, there must an increase in the frequency of repeat visitors, customers and new potential customers, and third, this of course will lead to increased sales.

First, prepare a business plan on how you are going to use the Internet to market your over-the-counter preventative health care products. Second, read The Pocket Guide to the Internet Telemarketing by Mark Veljkov, published in a paperback. The author has a number of books regarding the use of the Internet and effective marketing techniques.

Third, choose the right Webmaster. Any webmaster can design a decent website. Check the company references to see if they have the track record to help you. Good luck!

AskRecy Response:

There are several ways to register yourself as a minority owned business. There should be local assistance in your city. First go to or call the City Purchasing department and ask for the WMBE or Women Minority-Owned Business Enterprise department. Or there should be a Minority Owned Business Council listed in the White Pages. If not go to the information listed below. The criteria to qualify as a Women Minority Business Enterprise are four basic rules; (1). United States Citizenship or US resident alien status, (2) Fifty-one percent ownership by a woman or women. (3) Proof of effective management of the business such as hiring and firing authority, operating control, and decision-making role, and (4) Control is defined and evidenced by signature role on loans, leases and contracts.

There are two organizations that can help you, one is called the Women's Business Enterprise National Council. The Certification from this organization is one of the requirements for Minority and Women Owned Business to do business with Wal-Mart. Their website address is http://orgs.womenconnect.com/wbenc.

The other organization that should help you is the National Association of Women Business Owners. They are in your Chicago area and can be found at http://www.nawbonet.org.

Dun & Bradstreet expanded its Minority and Women-Owned Database by two-fold to help identify the needs of emerging business market opportunities for small business entrepreneurs seeking to either start or expand their business. You can called D & B Minority and Women-Owned Business Development Group at (610) 882-6988 or send an email to knechelt@dnb.com

AskRecy

Perplexed

AskRecy Responds:

This is a very important area that needs addressing and I applaud you and your bank for taking the initiative to improve and hopefully increase the number of African-American business loans. I can also understand why your bank and others are working to dispel charges led by minority groups involving unfair lending practices. Minority groups have also made allegations that many financial institutions lending practices violated federal laws by practicing racial discrimination.

When it comes to banks improving its lending practices to minorities, it also should include mortgage loans as well as business loans because both areas have been challenged. AskRecy constantly received inquires from African-American business owners regarding banks lending practices. The apparent inflexibility and failure of banks to respond to community needs has also led to the rise of the micro-lending industry.

You are also entirely correct in the perception and comfort factor regarding minority-lending practices. Black business owners commonly feel that they face bias. The National Community Reinvestment Coalition in December 1999 released the nationwide poll of 800 registered voters of different races conducted by Frank Luntz, a Republican pollster, and Jennifer Laszlo, a Democratic one. The poll showed what had been has known for years that while Americans overwhelmingly believe in fairness in lending, discrimination still exists. The poll found that, by a 5-1 margin, people believe banks favor white men over black and Hispanic men with equal credit histories and incomes in deciding on loan applications. The margin was 6-1 for respondents who said they believed banks favor white men over white women. The people questioned also believe Hispanics were nearly twice as likely as whites to have had a loan application rejected, while they believe blacks are four times as likely as whites to have also been turned down.

Another New York-based civil rights group in July 1999 also criticized the minority lending practices of one major Bancorp and urged regulators to deny a blockbuster merger awaiting final approval. The group alleged the Bancorp violated the Community Reinvestment Act by denying home loans to blacks at higher than-normal rates. The act requires banks to extend credit throughout their service areas, including low-income neighborhoods.

What can banks do to dispel this concept? The good news is that banks are working to serve minorities by offering services such as helping minorities with creating a business plan, home-buying fairs, credit tips and some banks are actually visiting local black churches to bring to message that their position and attitudes towards minority lending have changed.

Banks can step up participation in homebuyer education and business development programs to make sure applicants submit the strongest loan applications possible. Some banks are doing everything possible to reach out to the African-American business and homebuyers. Lenders have started acknowledging the need flexible in lending, such as accepting utility and rent payments as credit indicators. As part of its community outreach efforts, some loan officers have passed out pamphlets on offering credit tips, and a 17-minute home-buying video. I have read that one particular bank participated in 15 fairs last year as part of its efforts to originate loans in low- and middle-income minority areas and went one step further by tying bank employees paychecks to how well they do in awarding mortgages in those areas.

Another thing that banks can do is to recognize that many of the banks black-owned companies are also their customers and it is they who are being denied credit by the very banks where they keep their corporate accounts. Flexibility in loan procedures, especially if the business owner has a good average cash balance needs be considered in lieu of some previous and old slow pay accounts.

Your question regarding the centers of influence to contact i.e. organizations, media and influential individuals will have some effect by not much. The proof is in the pudding and your bank's actions will speak louder than words and will spread like a fire burning out of control when the word gets out within the community areas and locales that your bank truly practices what it is marketing. The bank could make the money available through business and mortgage loans and program development to increase business and home ownership over the next three to five years. Loans can be made to low- and moderate-income families and minority families to obtain home mortgages that were previously denied. However, we all know that the bottom line in any business is profitability. Some risky loans are profitable sometimes you have to take a marginally loss leader to build a profitable foundation for future loans.

Perhaps, you and other banking officers should adopt a policy of going back into the community and getting to know your customer base which has a far more reaching effect than adding up "points" on a credit application. Who knows, you may be successful as the original founders of the banks once were, they loan monies on the character of the individual than on the piece of paper in front of them.

Good Luck!

AskRecy

Askrecy responds:

Unfortunately, I have seen and experienced a vast number of individuals with websites that were poorly designed and offered very little benefits toward their businesses. A person first - should be aware of business opportunities available on Internet by researching and understanding how the Internet world of doing business truly works, second - choose the proper hosting company and service provider, third - become aware of the legal and security issues on doing business on the internet, fourth - don’t take for granted the how difficult it is to locate clients and bring repeating business back to your website, and fifth - read Poor Richard's Internet Marketing and Promotions - How to Promote Yourself, Your Business, Your Ideas Online By Peter Kent and Tara Calishain.

Network Journal:

2. What are some of the key legal issues that may arise when you do business on the net?

Askrecy:

It has become increasingly clear that the Internet as it exists today presents some obstacles for commercial use that are both technological in nature and legal. The technical issues ranges from the lack of reliable authentication and copyright infringement, to legal issues. The Internet has become the place where it is extraordinarily easy for individuals to copy information without blinking an eye. A person should be keenly aware of the key legal issues associated with doing business online. For Example, one should become familiar with the following:

1. May I scan any image I wish and post it on my Web site?
2. May I use images from the Web sites of others?
3. May I freely link to the Web sites of others?
4. Someone has set up a link to my Web site without my permission what can I do?
5. How may I keep people from taking things from my Web site?
6. How do I protect myself from loss of my domain name?
7. Do MIDI and WAV files violate copyright laws?
8. Can other people copy my email or news postings?

The answers to these questions can be found at http://www.patents.com/weblaw.sht

Network Journal:

3. How did you manage to get your successful web address established? Is there anything you'd like to share about your experience that could benefit other black entrepreneurs?

Askrecy:

Research, reading, hard work, trial, error, and networking. First, I had to determine what the product or service I wanted to offer. This is not as simple and easy as one thinks. For example, If I wanted to sell candied apples over the internet - merely creating a website offering to sell consumers plump red juicy candied apples is no guarantee that I will sell enough to stay in business. You have to define the intended audience, determine where are they located, which sites are they most likely to visit, how can you attract them to your website, how can you keep them once they visit the site, define a marketing plan, be more open to criticism, continue to improve and redo the website. The list of suggestions is endless, just be open-minded and creative.