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Stanford Business magazine

 

Black-Owned Firms Face Unique Hurdles

When Robert J. Dale’s small but lean, black-owned advertising agency captured a five-year, $100 million contract with the Illinois Lottery in 2003, it suddenly found itself subject to capricious new invoicing rules, an unheard-of five audits, and six-month delays in payments.

Hearing similar stories from other minority business owners, Dale, MBA ’73, confirmed that his experience was not unique. Black-owned businesses that become serious competitors with their white-owned counterparts often experience deliberate attacks aimed at undermining their success, he said.

Such obstacles can nevertheless be overcome, Dale, founder and president of the Chicago firm R.J. Dale Advertising and Public Relations, told attendees of the 2007 Stanford Black Business Students’ Association conference. With the help of a sophisticated accounting consultant and lawyer, his company was able to come out a winner—in fact, it turned out the state owed the firm money.

One major challenge black businesses face is lack of access to capital, Dale said, citing research indicating that white-owned businesses secure loans twice as often as black-owned businesses. “Banks treat blacks like sellers instead of buyers of money,” he said. “They act as though they’re doing us a favor when we’re looking for funding. We must change that attitude.”

Dale urged black students to persist in considering entrepreneurial careers. “There’s no limit to what you can accomplish, and we need you out here,” he told the audience.

Video Video: Robert J. Dale