African-American Entrepreneurship Blossoms in Kansas City

By: Mark Dillon, KC Metro News

A year and a half in busi­ness on Troost Avenue in Mid­town Kansas City, Craig H. Car­lock is defy­ing sta­tis­tics and stereotypes.

Car­lock opened Bar­ber­shop 67 in Octo­ber 2009, too late to be counted in the U.S. Cen­sus Bureau’s quin­quen­nial sur­vey of small and minority-owned busi­nesses. Released in Feb­ru­ary, the lat­est gov­ern­ment data set showed that the num­ber of black busi­nesses in Mis­souri grew by 47.4% dur­ing the eco­nomic boom years from 2002 to 2007.

In fact, African-Americans in Mis­souri opened new busi­nesses at more than 2.5 times the over­all rate for small busi­nesses nation­ally dur­ing this five-year period. In Kansas, the growth in the num­ber of black-owned busi­nesses also was higher than aver­age — 26.2%.

Such stats got lost in recent media cov­er­age of our region’s pop­u­la­tion changes as reported in the cen­sus. The 2010 cen­sus data point that made head­lines at the end of Feb­ru­ary was that Kansas City, Mo.’s black pop­u­la­tion fell by a few hun­dred, to 137,540, over the prior decade. A week later, the U.S. Cen­sus Bureau reported that John­son County, Kansas’s black pop­u­la­tion had more than dou­bled, to 23,636, over the same period.

“Black flight” crowed a head­line in The Star in early March, with a “sur­prised” colum­nist con­clud­ing that our “cen­ter city con­tin­ues to hol­low out.”

A closer look at the new data sug­gests that Kansas City’s black busi­ness com­mu­nity is resilient and entre­pre­neur­ial in the face of rel­a­tively high costs and reg­u­la­tory hur­dles, espe­cially con­sid­er­ing that the group’s pop­u­la­tion has declined by far greater per­cent­ages in many other urban areas.

In KCMO, there were 4,672 black-owned busi­nesses in 2007, rep­re­sent­ing 13% of the city’s busi­ness com­mu­nity, eco­nomic cen­sus data show. That was a higher num­ber of black busi­nesses than in some larger cities, includ­ing San Diego (a city three times the size of Kansas City), Las Vegas and Den­ver. The per­cent­age of busi­nesses owned by blacks in KCMO was higher than in Boston and in line with Oak­land, Calif.

Most black-owned busi­nesses in the Kansas City metro area are small, par­al­lel­ing a pat­tern found across the coun­try, accord­ing to the cen­sus. In fact, seven out of eight local black busi­nesses had annual rev­enues of less than $50,000 in 2007, a fig­ure that tends to indi­cate a high level of self-employment, sole pro­pri­etor­ships and “mom-and-pop” shops.

Look­ing at the busi­nesses by sec­tor four years ago, there were more black-owned busi­nesses in health care nation­wide than in any other part of the U.S. econ­omy, fol­lowed by the broad ser­vices sec­tor. That was true in Mis­souri as well, but in Kansas, there were more black-owned busi­nesses in the ser­vices sector.

An under­served mar­ket
In set­ting up his shop, Car­lock didn’t specif­i­cally seek an African-American clien­tele, but he saw an under­served mar­ket with lots of untapped poten­tial. He said one of the biggest chal­lenges he’s had to over­come was fear — even among fam­ily and friends, many of whom sug­gested he think twice about oper­at­ing at 3402 Troost. That’s a block from the Armour Boule­vard inter­sec­tion, a KC-police-designated aggravated-assault “hotspot.”

“A lot of peo­ple talk about the need to bring more busi­ness to under­served areas. When it actu­ally comes down to doing that, there’s hes­i­ta­tion, and second-guessing,” Car­lock said.

Real­ity has proven Carlock’s skep­tics wrong. He employs four bar­bers and says his busi­ness model worked even as a new MAX bus line was under con­struc­tion along Troost last year. He also faced a few extra state reg­u­la­tory bur­dens since he is not a bar­ber him­self. More­over, Car­lock said, he hasn’t had to call police to his shop since opening.

“Every­thing is going as planned,” said Car­lock, whose pri­mary occu­pa­tion is computer-aided-design drafter at Tal­i­a­ferro & Browne, a large KC engi­neer­ing firm. “I knew going in it would be a slow process, but I’m very proud of the progress we’ve been making.”

Carlock’s inspi­ra­tion for the shop was his father’s Kansas City bar­ber­shop, where he played as a child. See­ing a ser­vice vac­uum a few years ago, he decided to apply his draft­ing skills “to cre­ate a bar­ber­shop that caters to the 21st cen­tury cus­tomer while stay­ing true to early bar­ber­shop tra­di­tions.” The shop’s ameni­ties include HDTV and a pool table. He’s also part­nered on mar­ket­ing with a nearby gro­cery store to help build business.

In the Mid­town cen­sus tract where Car­lock has his busi­ness, the black pop­u­la­tion grew in absolute terms since 2000 and became the area’s largest demo­graphic group for the first time. This in part illus­trates that, within KCMO, there’s been more of a long-term shift in where African-Americans live within the city rather than an exodus.

Lawyer-entrepreneur Sly James is an exam­ple. He may have grown up on Mont­gall Avenue on the East Side, but 14 years ago he moved his fam­ily from middle-income 81st and Holmes to the more afflu­ent cen­sus tract that’s just south of Carlock’s busi­ness — Cen­tral Hyde Park.

Car­lock didn’t seek any gov­ern­ment help to get started, but the city’s Eco­nomic Devel­op­ment Corp. was quick to rec­og­nize his efforts. In Sep­tem­ber, Bar­ber­shop 67 earned the EDC’s annual Cor­ner­stone Award in the small-business cat­e­gory. That put the Paseo Acad­emy grad­u­ate in the same cir­cle as Antheus Cap­i­tal, which is spend­ing more than $62 mil­lion to restore hun­dreds of nearby apart­ments on Armour Boule­vard to market-rate housing.

KCMO’s city-government web­site sug­gests that only a small per­cent­age of African-American busi­nesses in the city bother to deal with the bureau­cracy as a source of busi­ness. Only 209 minority-business enter­prises (cov­er­ing all eth­nic­i­ties) have filed the exten­sive paper­work and tax dis­clo­sure needed to earn pref­er­en­tial sta­tus in the award­ing of city-government contracts.

While much anec­do­tal evi­dence might be avail­able well before 2014, econ­o­mists and the pub­lic won’t get a defin­i­tive sta­tis­ti­cal look at how the Great Reces­sion and 2009’s fed­eral health-care law impacted the region’s black busi­nesses until then. That’s when the next fed­eral sur­vey mea­sur­ing change in the minor­ity busi­ness com­mu­nity through 2012 is likely to be available.