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Richmond remains a place for African-American entrepreneurs

Published date: May 1, 2016

Richmond Times Dispatch
By LOUIS LLOVIO

This article was originally published in the Richmond-Times Dispatch

Starting a business never has been easy for anyone, but historically, African-American entrepreneurs have had a particularly difficult time.

Like all entrepreneurs working after the Civil War, blacks were faced with issues that made keeping a business afloat tough — soil exhaustion, poor job prospects, crumbling infrastructure and slow industrial growth.

But they also were dealing with practices and laws intended to stifle their economic development.

Even though they were free, they needed permission to trade, sell liquor in certain areas, or testify against white customers who wouldn't’t pay. As for sharecroppers, they barely turned a profit after paying rent.

That’s why starting in the late 19th century and continuing deep into the 20th century, black business districts sprung up across the South, including Richmond’s Jackson Ward and Petersburg’s Triangle, said Patrice Perry-Rivers, a professor at Virginia State University’s Reginald F. Lewis College of Business who also directs VSU’s Center for Entrepreneurship, which was founded last year.

Both her work at the center and as a professor give Perry-Rivers a unique perspective on the history of black-owned businesses and how to continue growing what became a strong tradition.

The black business districts were havens for African-Americans who were educated, including lawyers and accountants, but couldn't’t find work in their profession. The districts also were a place where business owners could open shops, because selling to white consumers was, at best, difficult.

For the African-American customers, these business districts were somewhere they could shop freely.

Perry-Rivers said it’s important to remember that these were consumers who were denied service in shops, had to use back entrances, and received poor customer service. They sometimes faced violence when shopping outside their community.

“So the business of ‘captive black consumers’ fueled black business success,” Perry-Rivers said. “Nearly all of the needs of African-Americans, from cosmetology and music, to legal, mortuary and tax services, were able to be met by black businesses.”

Richmond, she said, proved to be a particularly strong incubator for African-American capitalists and produced “some of the most important entrepreneurs ever.”

Perry-Rivers singled out Maggie L. Walker, one of the first female American millionaires of any race and the first African-American woman to charter a bank, but she said that just as important were “the amazing 13 former slaves” who started the Richmond Planet in 1883.

The Planet was the nation’s first African-American newspaper and “was crucial to the success of black culture during the turbulent time it existed,” she said.

The newspaper gained added prominence under editor John Mitchell Jr., who turned it into “a proponent of racial equality and of rights for the African-American community,” according to the Library of Virginia.

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After the civil rights movement, markets began to open for African-American businesses and led to a new world of opportunity.

“The result of desegregation has, overall, been positive for black consumers in terms of product diversity to which they now have access, and of course the removal of the threat of violence by angry mobs for just shopping,” Perry-Rivers said.

“However, lower entrepreneurship rates for blacks, when compared to the majority, has really persisted since then, because the opportunity cost is too high for skilled and highly educated blacks to pursue ‘risky’ entrepreneurship and compete against better-funded mainstream firms.”

She believes many of these African-Americans, rather than start a business, chose a safer path: going to work for established corporations or the government.

One reason VSU began its entrepreneurship program last year was to help blacks create businesses rather than work for others.

The center’s mission is to provide education and services that encourage innovation and create opportunity, Perry-Rivers said. One of the center’s biggest functions is giving students and local business owners access to the experience and resources that can help launch or grow businesses.

Perry-Rivers said it’s critical to spur this talent, because Richmond remains one of the best places for black entrepreneurs in the country.

She pointed to the region’s significant black population — 30 percent — and its high percentage of black college graduates; 50.6 percent of African-Americans 25 and older have some college education or higher. She also noted “supporting universities” including VSU, Virginia Commonwealth University and Virginia Union University.

In terms of the community, there are vibrant African-American business organizations like the Metropolitan Business League, the Richmond chapter of the National Association of Black MBAs, and the Central Virginia African-American Chamber of Commerce.

“I believe this area still being a better place than most for black business is also a tribute to the Richmond market’s rich history of successful black entrepreneurship,” Perry-Rivers said.

“This area has really been a ‘hub for black business,’ and we’d like to make sure it stays this way.”

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