Minority Business expert James Lowry shares post-pandemic prognosis for Black businesses
By Roz Edward
African-Americans and minority businesses have inarguably suffered the most crushing economic blows dealt by the COVID-19 pandemic. That’s just the bottom line as we descend into the pandemic abyss. Black American business owners are particularly at risk of diminished productivity and compromised livelihoods for a myriad of reasons, including access to COVID-19 economic response programs. Black businesses continue to experience epic declines at unprecedented levels and are disappearing altogether during the national and international pandemic.
But while Blacks in the non-essential business categories continue to suffer job eliminations, layoffs and revenue reductions amounting to billions of dollars in lost productivity, what is a Black entrepreneur to do?
Real Times Media recently spoke in an exclusive interview with one of the nation’s most prominent and respected business experts, James H. Lowry, a 40-year advocate of minority business development regarding the current climate for Black businesses in an international crisis. Lowry is a world-renowned business icon, sought-after speaker, strategic advisor and nationally recognized workforce and supplier diversity pioneer.
Lowry became the first African American consultant for global consulting firm McKinsey & Company in 1968. Later, he became the first African American senior partner at the prestigious Boston Consulting Group, where he led the firm’s workforce diversity, ethnic marketing and minority business development consulting practice. Lowry continues to serve as a senior advisor to BCG, while heading his own private consulting firm, James H. Lowry & Associates.
While the future for entrepreneurs and start-up businesses may appear to be relatively bleak for small and minority businesses, the news is not altogether dire. Actually, Lowry says the pandemic has created a climate which is relatively conducive climate for people of color to strike out and start or even expand businesses to offset diminishing employment scenarios and through self-employment and entrepreneurial ventures. Here the business expert explains the state of Black-owned business and where we go from here.
Lowry on entrepreneurs …
I think it’s a perfect time to [become an entrepreneur] considering the mindset of corporate America and probably the mindset of the new federal administration. We are going to go back to where I started in 1980 when Jimmy Carter went back to Georgia. Jimmy Carter came with Maynard Jackson and people like that. During that period Black people created more jobs between 1978 and 1982 than any other time in the history of America. … I don’t think we have any choice but to do it again.
But I want to make clear that just starting a business without a good plan, a good product or without having a good team, you’re not going to make it.
I’ve been advocating [to grow minority businesses] for years, which is why I spend so much time in Detroit. It was where for the first time I saw so many black people owning big busines and bringing other people in to run those businesses. But what we didn’t do was diversify those businesses. When we were making big money and the Big 3 were coming through, did we take the money and start building dynasties? Did we start to diversify into other industries? No, we didn’t and that was a problem.
On Black businesses surviving during and in the post pandemic era …
I think we have to go back and examine the statuses of black business in America before the pandemic. We were weak then. We were weak in terms of the market and where we were going and capital available to us and we were weak in terms of what people were blocking us out of. So, we were already in a weakened position so when the virus came, we were devastated because as statistics bear out, we were the weakest of the weak.
Black, Brown and White businesses are suffering during this period and many of them are going under, but because we are the weakest of the group many black businesses are suffering disproportionately.
On institutional responses for assistance to ailing businesses …
Let’s be clear, the George Floyd killing was not too long ago. And what happened is that corporate America was talking about ‘doing the right thing’ before the pandemic, but they hadn’t been doing it. So, when the pandemic hit and the wealth disparity and the weakness of our business positions was even more obvious, many of them decided we have to put some serious money on the table. So what we’ve been getting in the last month or two are pronouncements and announcements about how many billions of dollars we are going to allocate here, but they are all scrambling to see how it’s going to get down to black businesses. What is going to be the vehicle for capital infusion that makes the most sense for all sizes of black business.
On financial products available for small businesses …
The Community Development Finance Institutions [CDFIs] are designed for the small business person. There aren’t many of them that are viable and the other truth is that many are not owned by black people and are not controlled by black people. So that is a vehicle that can and should be improved to make it more friendly to black business. I’m in the process of doing that and trying to make these vehicles more sensitive to someone trying to [do business] in places like Chicago, or Detroit or Harlem or wherever those businesses are. … Do we have it refined yet? Not quite and that’s what researchers are working on.
On the three stages of business development …
We are going to have small businesses that are always going to be small. I say it over and over that small businesses create jobs for the family. … Most of our black businesses, approximately 90 percent are sole proprietorships, meaning they employ only one person, the owner.
Then you have some firms that can grow for 5, 10 and 15 people and they create jobs in our communities that create wealth in our communities.
But we should not take our eye off big business. We should have more black businesses of size. When you talk about a city like Detroit people lose site of the fact that in the 1980s there were very few Black businesses of size in Detroit. When the automotive industry decided they were going to press forward and create more black businesses of size there was a big change. I give Detroit and the automotive industry credit for getting some of our best and brightest to come into Detroit because they had then had the opportunity to grow $200 million dollar businesses and $400 million dollar businesses, even billion-dollar businesses because of the automotive [industry] partnering.
On business education …
Most of our HBCUs don’t have business concentrations. We have to start thinking about what we can create at institutions like Spelman or Morehouse or Morris Brown where we can create our own business programs. That’s why I love Atlanta. There is no excuse that with the bright young people we get out of the Atlanta University complex that we can’t create our own [Mark] Zuckerbergs.
Most of our Black kids only know Madame CJ Walker, but they don’t know about Greenwood and Tulsa and the power of the Black entrepreneur. We have to change our mindset in these environments about what we’re going to do and how we’re going to do it, we can make quantum leaps.
In his latest book, Change Agent: A Life Dedicated to Creating Wealth for Minorities, Lowry shares profound insights on business advocacy, best practices and real world experiences regarding business success.
“You always identify and start a business to make money. You don’t even want to have a mindset that youre going to make money this year. You want to have a mindset that you’re going to generate money and create generational wealth for the future,” concluded Lowry.