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Creating a new business agenda.

"WE'VE GOT THE POWER!" ROARED THE 388 minority business owners doing double duty as state representatives at the White House Conference on Small Business held this past June. Testimonials and demands were rampant as the deputized special interest group's energy vibrated throughout the Hilton Hotel.

All the while, Michael Clark Michael (or Mike) Clark can refer to the following people:
  • Michael Clark (astronomer), New Zealand astronomer
  • Michael Clark (dancer), British post-punk ballet dancer
  • Michael Stephen Clark, American newspaper columnist
, president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board.  of Atlantic-Pacific Inc., an engineering and manufacturing firm in Fremont, Calif., just leaned against a wall and stared passively. After the rally, Clark chatted with cohorts, then lobbied his case to several clusters of black entrepreneurs. "Our businesses are to small," Clark said. "We need to focus on getting ahead by reclassifying the `small' category and creating a `micro' category that caters to the needs of very small businesses."

The Small Business Administration generally defines a small business as having less than 500 employees or less than $5 million in sales. But in many industries, such as retail, firms can qualify as "small" with $21 million in sales. According to according to
1. As stated or indicated by; on the authority of: according to historians.

2. In keeping with: according to instructions.

 the latest U.S. Census Bureau Noun 1. Census Bureau - the bureau of the Commerce Department responsible for taking the census; provides demographic information and analyses about the population of the United States
Bureau of the Census
 figures of some 424,165 black-owned businesses, only 189 gave more than 100 employees. Just 328 have more than 50 employees. Total revenues for black firms is $19.8 billion or, on average, $46,592 annually. Clearly, most black-owned firms fall short of the SBA's definition of small.

Just how the SBA SBA
Small Business Administration

Noun 1. SBA - an independent agency of the United States government that protects the interests of small businesses and ensures that they receive a fair share of government
 defines small has become a sore spot with many entrepreneurs, regardless of race. Proponents of the micro business movement say that very small firms could be better targeted and therefore more precisely serviced by the SBA. Such a distinct category would help provide fairer competition among other very small firms in the areas of loans, financial and technical assistance programs, innovative research assistance programs and government procurement Government procurement, also called public tendering, is the procurement of goods and services on behalf of a public authority, such as a government agency. With 10 to 15% of GDP in developed countries, and up to 20% in developing countries, government procurement accounts  contracts. The SBA's fundamental purpose is to promote fair competition among small firms.

But not every small business owner supports the micro movement. "We have to get off our feet and stop begging for equal opportunity," says Roosevelt Roby, president of the Santa Monica Santa Monica (săn`tə mŏn`ĭkə), city (1990 pop. 86,905), Los Angeles co., S Calif., on Santa Monica Bay; inc. 1886. Tourism and retailing are important, and the city has motion-picture, biotechnology, and software industries. , Calif.-based Reese Network, a 66,000-member association of home-based businesses." We just need to lick our wounds, move on and stop asking for special treatment."

Bennie Thayer, president and CEO of the National Association for the Self-Employed (NASE NASE National Association for the Self-Employed
NASE National Association for Self-Esteem
NASE National Academy of Scuba Educators
NASE National Association of School Executives
NASE Nonacoustic Submarine Effects
), a 320,000-member association in Washington, also disagrees with the micro movement. "Congress talks a big game, but [African Americans] are the last ones on the totem pole totem pole

Carved and painted vertical log, constructed by many Northwest Coast Indian peoples. The poles display mythological images, usually animal spirits, whose significance is their association with the lineage. Each figure represents a type of family crest.
," says Thayer. "A micro category would just further separate us and allow Congress to look further beyond our needs."


Whatever the opinions of black business leaders on the micro movement, they all agree that the black business community is walking on broken glass Walking on Broken Glass is a single by Annie Lennox, taken from her 1992 album, Diva. The video stars the actors Hugh Laurie and John Malkovich, being seemingly set in the 18th century, facilitating their appearance 'in character' as in Blackadder the Third . In general, white male business owners are irked by affirmative action affirmative action, in the United States, programs to overcome the effects of past societal discrimination by allocating jobs and resources to members of specific groups, such as minorities and women.  and assistance programs targeted at minorities, and they're marshaling their voting blocs, pushing for an end to 8(a) set-asides.

Now on the chopping block are Specialized Small Business Investment Companies, which are being scrutinized for allegedly granting loans to minority entities that were destined des·tine  
tr.v. des·tined, des·tin·ing, des·tines
1. To determine beforehand; preordain: a foolish scheme destined to fail; a film destined to become a classic.

 to fail. (See "Under Fire," Enterprise, November 1995.)

Moreover, the Minority Business Development Agency remains under constant threat of being wiped out with a mere presidential signature. The agency, which came into existence under President Nixon's executive order, helps to develop minority firms.

Clark and other business owners have been trying to persuade SBA Director Philip Lader Philip Lader, the United States Ambassador to the Court of St. James's, (the United Kingdom of Great Britain and Northern Ireland) from 1997 to 2001, is chairman of WPP Group plc, the global media/communications services company with 98,000 people in 2,000 offices in 106 countries.  to take the Regulatory Flexibility Act The Regulatory Flexibility Act is perhaps the most comprehensive effort by the U.S. federal government to balance the social goals of federal regulations with the needs and capabilities of small businesses and other small entities in American society.  and reclassify Verb 1. reclassify - classify anew, change the previous classification; "The zoologists had to reclassify the mollusks after they found new species"
class, classify, sort out, assort, sort, separate - arrange or order by classes or categories; "How would you
 the "small" definition, adding a "micro" category, which would encompass firms with less than $10 million in revenues and 50 employees. This way, a two-employee firm with $100,000 in sales wouldn't be forced to compete for procurement contracts with a 200-employee firm reporting $20 million in sales.

Lamenting about a routine $20,000 procurement contract for plastic examination gloves, Trent Harbin, president of Assured Medical Supply in Detroit, is lobbying for the micro category. It seems that many hospitals hand over small contracts to major medical supply companies, because smaller businesses can't beat the bulk-buying capabilities of the multimillion dollar firms. "[The larger companies] have more buying power Buying Power

The money an investor has available to buy securities. In a margin account, the buying power is the total cash held in the brokerage account plus maximum margin available.

Also referred to as "Excess Equity.
. They should not even be on the same screen," says the 43-year-old entrepreneur.

After 20 years of selling medical supplies for three major manufacturers, Harbin opened his company in 1993. He recorded a respectable $200,000 in sales his first year in business. "I had to hustle against competitors [twice my size] to get clients," says Harbin, who knows all the major players personally. "A micro status would have helped reduce unfair competition." Harbin predicts $1.7 million in sales for this year.

Needless to say, minority entrepreneurs who support the micro movement aren't merely bellyaching about the paltry 5% to 10% set-asides pecked over by African American, Latino, Asian, Native American and white women business owners Many online and offline organizations have been created to collect information about businesses around the world owned and operated by women. Many other organizations have been created to assist the women that own and operate those businesses. .

Atlantic-Pacific's Michael Clark is on various councils that work closely with SBA directors, congressional representatives and President Clinton himself. Clark's legion represents several hundred thousand business owners. The group is not formally named since the 2,000 regional delegates who attended the White House Conference on Small Business were representing their respective states, and in turn, their constituents.

Reclassification Reclassification

The process of changing the class of mutual funds once certain requirements have been met. These requirements are generally placed on load mutual funds. Reclassification is not considered to be a taxable event.
 of what constitutes a small business finished 80th among the 200 major recommendations presented by the delegation. Taxes, burdensome regulatory paperwork, international trade and health care issues snagged the majority of the top slots.


Although NASE's Bennie Thayer isn't backing the micro status, he contends that 99% of all businesses in America are categorized as "small." Unwittingly, NASE, whose membership is made up of mostly micro business owners, posts a strong case for the micro business status. Thayer, however, contends that "if affirmative action is dismantled, none of us will be able to compete. So it won't matter what we're called."

Over the last few months, there's been a lot of talk--and even more whispering--but entrepreneurs are still not sure how to hedge their bets. Everyone knows that something must be done to create a balance and ensure that African Americans continue to compete in the ever-evolving marketplace. But there's no widespread agreement on how this should be done.

Perhaps Babette Peyton best represents the opposing side in the black business community, the side that's tired of begging or battling for its just due. "Of course we need more government attention. Obviously, we need access to loans, but I don't want another stigma to get it," says the president and CEO of Peyton Elevator Co., a $500,000 elevator and escalator design, build and repair firm based in Chicago.

Although her firm's sales don't even top $1 million, Peyton still shies shies 1  
Third person singular present tense of shy1.

Plural of shy1.
 away from the micro status concept. She's quick to note that there are companies serving as minority fronts that steal contracts from "real, legitimate [black-owned] small businesses."

Despite citing case upon case of white males boasting their "ownership" of minority companies and getting free rides, Peyton still can't support a micro business standpoint. Regardless of how many categories are created to aid minorities, she says, "The good ole boys good old boy also good ol' boy or good ole boy  
n. Slang
A man having qualities held to be characteristic of certain Southern white males, such as a relaxed or informal manner, strong loyalty to family and friends, and often an
 will seduce some minority front companies and keep getting over."

The jury is still out on whether the SBA or the Clinton administration Noun 1. Clinton administration - the executive under President Clinton
executive - persons who administer the law
 will even consider the idea of redefining small businesses. At least when it comes to lending, the SBA's micro loan programs (loans for less than $50,000) do recognize very small enterprises.

Stumped for the right solution. Peyton reflects back upon her wallflower wallflower, Mediterranean perennial (Cheiranthus cheiri) of the family Cruciferae (mustard family), particularly popular in Europe, where it flourishes on old walls.  days when she leaned against the Hilton's hallowed walls as a delegate at the 1985 White House Conference on Small Business.

The first inklings of forming a smaller business category were discussed then as a preventive measure for African Americans to be less dependent on race-conscious business aid.

"The idea is always popular, at first," says Peyton. "However, when it comes right down to it, other minority businesses may think like I do: I know I'm a micro business--I just don't want to be called one."


At the White House Conference on Small Business, the Minority Delegates' Caucus fought to have 16 recommendations included within the final 60 Recommendations that were submitted to Congress in September. Here's a quick scan of what they want Congress to do.


* Increase the SBA loan guarantee programs from their current level of $750,000 to $1,000,000.

* Increase the number of non-bank lenders eligible to process SBA loans.


* Continue and enhance the SBA micro loan program.

* Enforce the Community Reinvestment Act Community Reinvestment Act (CRA)

Enacted by Congress in 1977, the CRA encourages banks to help meet the credit needs of their communities for housing and other purposes, particularly in neighborhoods with low or moderate incomes, while maintaining safe and sound operations.
 with special efforts placed on eliminating redlining Identifying text that has been changed in a word processing document by displaying it in a special color, for example. It allows the original author of the text or other users to see ongoing revisions. The term comes from manual editing where a red pen is used to mark up the pages. .


* Implement "one-stop shopping" access to all government information and resources.

* Create a pilot program that leverages private-sector resources to assist small business members with international trade.


* Create a Small Business Relief Fund to economically assist small businesses that are displaced by the establishment of a big business in their localities. The big business must contribute an annual fee for the fund.


* Design a national certification national certification Lab medicine A voluntary form of regulation that affirms that a person has the knowledge and skill to perform essential tasks in a given field, in the lab or in nursing; NC is granted by nongovernmental agencies or associations with  organization to establish a database of certified small business, small disadvantaged business, and small women-owned business. Initially funded by Congress, it will serve as a one-stop clearinghouse for all federal agencies by disseminating information in conjunction with each agency's outreach efforts.

* Support the Minority Small Business Capital Ownership and Development Program, SBA 8(a), and enact legislation to require federal agencies to reach their 8(a) goals.

* Establish procedures for immediate relief for small businesses in the event of catastrophic circumstances, including, but not limited to, the total dissolving of government agencies.

* Require that at least 35% of all government procurement monies (35% of prime and 35% of subcontracts) be awarded to small firms so that at least 10% of prime and 10% of subcontract monies be awarded to minority businesses.

* For more information or a copy of the White House Conference on Small Business Recommendations, write to the Small Business Administration, Office of Information, Advocacy Department, Room 7800, Washington, DC 20416.
COPYRIGHT 1996 Earl G. Graves Publishing Co., Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1996, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:Micro business enterprises smaller than small businesses: includes the minority caucus mandates
Author:Reynolds, Rhonda
Publication:Black Enterprise
Date:Jan 1, 1996
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