By Rosaland Tyler
New Journal and Guide
Gregory Covington does not need to flip through a new report that says many minority businesses survived the 2008 economic downturn and moved on
Instead, Covington can tell you why he survived. Four years after the 2008 downturn, Covington moved from a full-time job in real estate to a full time job at Taste and See, a banquet and conference center in Norfolk.
“I accepted a full-time position in 2011,” said Covington, who left that post last month. Currently, he is the lead consultant for a real estate team, Team Covington at Shaffer Realty.
“I continued to sell real estate part time,” Covington said. “Eighty percent of my clients are African Americans. And for the past two years my team and I have been reaching out. People are starting to say they have built their credit line up, and do not have the fear of losing their home anymore.”
“People are establishing their credit by staying out of debt,” Covington said. “People say that with many of the new programs for student loan debt, it has helped to restore their credit.”
Covington is also putting the finishing touches on a new business in Hampton called Wait Staff Services Inc. He will launch his new temp service in October. For more information, please phone 739-8700.
“I plan to start it before the holiday season, to take folks and create job opportunities for those in the service field,” Covington said.
“We will provide staff to hotels, private homes, caterers and others.”
And this is where that new report on resilient minority businesses comes in. According to the Institute N.C., a 2012 national survey of small business owners showed minority firms have experienced positive growth since 2007.
“African American-owned firms expanded their employee numbers at a higher rate than that of white employer firms; with white firms adding employees at a rate of 1.7 percent and black firms adding employees by 9 percent over the same period from 2007 to 2012,” according The Institute of Minority Economic Development in Durham, N.C.
“The numbers confirm that minority businesses across the state largely weathered the fallout of the 2008 recession, and our experience at the Institute confirms this trend,” said Andrea Harris, the Institute’s Policy Center director. “We cannot discount or undervalue the contributions of minority business enterprises based on this data.”
A 2011 study by the Kauffman Foundation on entrepreneurial activity tells a similar story. Minority entrepreneurs (including African Americans, Asian Americans and Latinos) accounted for 24 percent of all new entrepreneurs in 1996, but their share had risen to 40 percent by 2010.
Timothy Bates, professor emeritus of economics at Wayne State University – and special consultant to The Institute – said, “This information bodes well for minority businesses and the potential for building wealth in diverse communities. The U.S. Census data underscores the significant contribution of minority businesses to the national economy and highlights their positive impact toward job creation.”
While Covington said he survived the economic downturn by taking a full-time job and continuing to sell real estate in Hampton Roads, in Richmond, Lee Brazzell, president of Transformation Consulting, said her survival hinged on her own personal experience. That is, she opened her business about a decade before the downturn. And she had already fine-tuned her consulting company.
“I had already learned how to cut my overhead,” said Brazzell, who in June became the regional president of the National Association of Women Business Owners.
“When you first start a business you start with a lot of office staff and have many people on the payroll,” Brazzell said. “You have a lot of assumptions. The problem is phone bills, payroll, and rent eat into your profit.”
“So you have to cut overhead or make a lot less profit,” Brazzell said. “For me, it made sense to cut overhead because I travel a lot. I did not need a large staff anymore.”
The key to survival is to keep an eye on your balance sheet, Brazzell said. “It is good to go back to your balance sheet and to see where your money is going. We did that. As a result, we never closed; but we were able to survive the 2008 economic recession because we diversified and had contracts running for two years, which allowed us to weather the storm.”
“We survived the economic downturn because we were frugal,” she said. “We also looked for new opportunities. We partnered. Sometimes people are afraid to do that but we sought out partnering opportunities.”
For Covington, the key was to reach out to former clients. “We survived by working the phones,” he said. “Ninety percent of our business is done by referral so we did monthly mailings, just calling people to say hello, or we would pop by to say hello.”
“We would give people flower seeds when the season changed,” he said. “We would buy one cent stamps and pass them out when the price of postage changed. We would pass out batteries for smoke detectors when the time changed.”
“I worked to keep my name and my face in my client’s mind,” Covington said.