In the midst of criss-crossing the country as a hotly-sought-after speaker for fellow Democrats running for office, U.S. Sen. Barack Obama made a stop in Austin Saturday to talk with small business owners about the issues facing them and the community.
Obama hosted the Q&A at Austin Town Hall, 5610 W. Lake St. Business owners were joined by representatives of the Austin Chamber of Commerce, the Austin African American Business Networking Association (AAABNA) and elected officials.
A former South Side state senator, Obama spoke on other, wider issues, such as the war in Iraq, high gas prices and the Democrats’ chances of retaking control of the U.S. Congress in November.
Then Obama took questions from the audience of about 100, which mostly dealt with challenges facing small business.
Phyllis Logan, owner of Bryant-Logan Realty, asked about the problems small businesses face in regard to its credit.
“If an individual is using every hard-earned dollar that they’ve saved to start a business, and then somewhere along the way while trying to improve or enhance themselves even more … then they run into a problem credit-wise,” she said.
Obama said African-American communities have to do a better job educating children about finances early on to avoid bad credit issues later.
“We have a tendency in our community, and this is not unique to the African-American community-we just don’t have good enough financial education early on to understand that if your credit goes bad, that can lock you out of opportunity,” he said. “Don’t take out a loan so you can buy the fanciest car so you can be stylin’ up and down Madison and you can’t make the payment because, at some point, you’re going to want to buy a house.”
On expanding one’s business, Obama pointed out that a lot of small businesses-through no fault of their own-are not able to accumulate a level of capital to allow their businesses grow.
Obama added that the federal Small Business Administration could do more to help small businesses with loans. He said he’s worked to get SBA to make its services more accessible to communities most in need.
“It doesn’t do you any good if you go to SBA and they make you go through as many hoops, or more, as the commercial banks in order to get a loan so you can expand your business,” Obama said. “A part of the problem is half the folks don’t know where SBA is. They don’t come out; they don’t knock on people’s doors. SBA should have someone in their office whose only job is to go up and down the commercial strips in the neighborhoods and talk to businesses to find out what they want and what services SBA can provide.”
Obama advocated African-American businesses pooling some of their resources together to help existing or new businesses. As an example, he suggested the large number of black churches on the West Side could possibly pool some of their money to help fund loans for small business.
Obama said other ethnic communities with businesses-such as the Korean communities-have such a structure in place. Despite problems facing some small businesses in Austin, Cook County as a whole, as reported by the U.S. Census Bureau in April, has more black-owned businesses than any other county in the nation, and has the fastest growing black-owned firms in the nation.
There were 54,758 black-owned businesses located in Cook County in 2002, which generated $3.9 billion in sales and receipts, compared to 32,377 businesses in 1997, according to the Census.
Minorities shut out of contract jobs
A question about contract opportunities for minorities was also asked at Saturday’s Q&A. The Chicago Sun-Times reported last week that minority-owned firms collected only 17 percent of the $84 million in prime construction contracts, and 1.7 percent of all construction subcontracts between 2003 and July 2005.
At a July 10 Cook County Board Business and Economic Committee public hearing, minority and women-owned businesses shared complaints with commissioners about problems with securing city contracts.
One concern raised there and on Saturday is how large businesses will secure a contract, then hire several subcontractors for the same project, leaving African-American businesses either off the project or paid at a much lower market rate.
“It seems as if the commitment to small business generally, and African-American, minority-owned and women-owned businesses in particular, has diminished,” said Obama, adding that his office was looking into some of the concerns.
In terms of leveraging more resources into Austin, Obama said one of the things the federal government can do is start patronizing small businesses for some of its purchases.
“Government agencies, they go out and buy pens, paper and things like that. There’s no reason why they can’t buy those things from small businesses.”
Obama also advised entrepreneurs to maintain good business practices.
“Don’t expect me to get you business if you’re not good in your business. We’ve got to be competitive. We’ve got to know our business and deliver a quality product, and have a good attitude.”