Rise of Entrepreneurs

In another confirmation of the growing economic strength of the black middle class, Black Enterprise magazine published last week its first annual listing of the nation's 100 largest black-owned or operated manufacturing and marketing companies. It shows that black entrepreneurs have made some significant progress in building profitable businesses, but that they still inhabit only a minor backwater in U.S.

industry.

Heading the list is Los Angeles-based Motown Industries, one of three record companies in the top 100. Started in Detroit 14 years ago by Berry Gordy Jr., Motown last year parlayed its soul singers (Diana Ross, the Temptations) into sales of $40 million. Next is Chicago's Johnson Publishing Co., Inc. (Ebony, Jet, Black Stars), which, with sales of $23 million, is one of eight publishing firms on the list. The smallest firm is Terry Manufacturing Co. of Roanoke, Ala., which has sales of $ 1,000,000 from women's uniforms and sportswear. The list is dominated by light manufacturing companies (18), auto dealers (15), general contractors (9), food processors and distributors (9), and beer and liquor wholesalers (4).

Historic Obstacles. In all, 54 of the firms were started in the past five years, a period that coincides with the Nixon Administration's Black Capitalism program. Many of the largest firms, however, neither got nor needed Government aid. Their success, says Black Enterprise Publisher Earl Graves, is evidence that some historic obstacles to black business ownership "have been overcome, [although] others remain maddeningly as barriers to real opportunity." Only twelve of the firms are in the South; most are in New York City, Chicago, Detroit and California.

Despite their growth, only a handful of the 100 firms (including Chicago's cosmetics-making Johnson Products and Baltimore's sausage-stuffing H.G. Parks, Inc.) have sold stock to the public--the only realistic way for a business to get the capital required for large-scale expansion. Until more black firms can go public, they will remain minor participants in financial life. One index of how far they have to travel:

the total sales of all 100 top black businesses ($473 million) are smaller than the sales of the 268th-ranking company in the FORTUNE 500.

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