Now in its 50th year, Black Enterprise has moved beyond its newsstand roots into a $15 million multimedia company. The New York-based firm, founded by Earl G. Graves Sr., is focused on Black entrepreneurship in print and digital publications, broadcast television and live events.
President and CEO of the historic Black-owned company, Earl “Butch” Graves Jr., recently spoke with JPMorganChase and Chicago-area Black leaders. Graves, who joined Black Enterprise after graduating from Harvard Business School in 1988 and assumed his current role in 2006, shared the following takeaways.
How did Black Enterprise get its start?
My father was an advance person for Robert F. Kennedy’s 1968 presidential campaign. All of us, my two younger siblings and myself, were in California when Robert Kennedy was assassinated. So, my dad went from thinking he was going to be on the fast track to Washington, DC, to suddenly being unemployed. When he came back to New York, people said, “You learned a lot through Robert Kennedy. Perhaps you should do something tied to Black business development.” Out of tragedy comes triumph. Without any publishing background, he said, “I’ll do a newsletter.” Then he figured he might as well do a magazine. He did it not knowing anything other than the courage of his own conviction. My father went to all the banks to pitch his idea and only one was interested and said yes: Chase.
What early challenges did Black Enterprise face in establishing itself, and do those continue today?
Things have changed more in the past 15 years than the past 150 years. When I joined the company in 1988, we were having challenges with advertisers—it seems crazy talking about [it] today. No matter what we would tell them, [the advertisers] didn’t believe it. At the time, we had about 500,000 subscribers, representing a large audience of middle, upper-middle class African Americans with needs and desires and investments.
So, we decided to diversify the business by doing professional events as a way for people to see, feel and touch an audience they did not have access to otherwise. It wasn’t because we knew that events were going to be the tail that wagged the dog in our business, which it is today. It was to demonstrate that we existed.
Black Enterprise gives as much attention to building personal wealth as building companies. What’s your goal?
I think the growth and development of Black-owned businesses have been crippled by this crazy attachment to title and ownership. Would you rather own 100 percent of a company that generates $100,000 in revenue or 10 percent of a company that generates $50 million of revenue? I mean, it’s fairly simple. We had a private equity business for a number of years where we invested in established minority-owned businesses. And I was shocked by how many CEOs would rather own 100 percent of nothing than 25 percent of something.
I’ve made the decision to invest in other businesses. My friends have invested 10 percent, 20 percent in other businesses, and they receive a monthly check from that ownership stake. It’s important to amass wealth.
Is funding the biggest growth obstacle for Black-owned firms
I think the biggest challenge for Black entrepreneurs today, and this will sound strange, is not access to capital, [though] that’s still a great challenge. The biggest challenge for African American entrepreneurs is scale. Ninety-six percent of Black-owned businesses are sole proprietorships. The only person who’s employed is you and when the big opportunities arise, the business is not in the position to have the team needed to execute.
[The answer] is to create businesses of scale. And then we can do business with corporate America. A small contract at Walmart is like $35 million. Companies need to do their research on the potential client. If they have a significant amount of suppliers—let’s take barbeque sauce as an example. In addition to proving how your product is unique, your presentation that you can produce 1,000 bottles of barbeque sauce a week will not satisfy that kind of buyer which needs 100,000. We need to take our respective resources [among multiple founders and investors] and work together to build companies that can attract major customers. Microbusinesses can’t do that on their own.
"I think the biggest challenge for Black entrepreneurs today, and this will sound strange, is not access to capital, [though] that’s still a great challenge. The biggest challenge for African American entrepreneurs is scale. Ninety-six percent of Black-owned businesses are sole proprietorships."
— Earl “Butch” Graves Jr., President and CEO of Black Enterprise
How important is having a digital-first approach to building a new business?
Black-owned businesses that have not embraced technology are going to falter because technology, frankly, is a way to level the playing field. Companies that do use technology rather than fighting it have benefited. If you think about a Black business and you have $10 million-plus in revenue, technology is one of the most critical things to help your business scale and grow. You don’t have the luxury of time to figure it out because people are always figuring it out in a faster, cheaper, better way.
While we’re on the subject of technology, how has your operation pivoted?
I’ve been blessed with four children. They’re not children anymore; they’re adult millennials. So, I have an in-house focus group for what people between the ages of 25 and 30 want and do. This generation is very smart; they just do things in a different way. So, we have started putting on virtual conferences and offering creative experiences. We now have six million unique visitors to the digital components of what we do. You’ve got to adapt to change. You’ve got to be willing to embrace and accept change and be nimble enough to do so.
