African American Small Business Owners’ Attitudes Toward Business Training

The attitudes toward training courses are documented for the rapidly growing African American segment of small business owners. The study provides evidence supporting the training-business creation model suggested by the Small Business Act and by Becker's work on human capital. Over 700 responses to a mail survey were divided into African American small business owners and Caucasian American small business owners. The African American small business owners rated the training courses as significantly more important than the Caucasian American small business owners for all 23 of the areas tested. A matched sample was created from the data set to evaluate the idea that demographics such as type of business and number of employees may have influenced the results. The findings from the matched sample were consistent with the findings from the total sample. Various reasons for these unusually strong results are offered as well as directions for future research. Introduction The number of African American business owners increased a dramatic 97 percent in recent years as the number of firms grew from 424,165 in 1987 to 823,499 in 1997 (United States Census Bureau 2002b). Though the growth is remarkable, African American owned businesses remain underrepresented in terms of the proportion of African Americans in the general population. In a 1997 survey, the United States Census Bureau estimated that African American businesses accounted for slightly less than 4 percent of the total number of firms (United States Census Bureau 2002b) whereas in another survey (United States Census Bureau 2002a), it was estimated that 12 percent of the population over the age of 18 were African American. Clearly, the percentage of African American firms is substantially less than the proportion of African Americans in the population. Therefore, variables that impact business ownership for this group are of special interest and may provide important insights into small business creation. For some time, politicians have noticed a discrepancy between the African American population and the percentage of African American firms, as well as the general need for small business development in the United States. The United States Congress has taken actions to address this gap and to support the growth of small business. The Small Business Act (Public Law 85-536 as amended, see United States Small Business Administration 2001) was designed to encourage full and free competition, free entry into business, and opportunities for the expression and growth of personal initiative and individual judgment. Among other significant ideas, the act proposes a relationship between training courses and small business development that will be referred to in this paper as the training-business creation model. The training-business creation model posits that the actual and potential capacity of small business is encouraged, enhanced, and developed by the use of training. The goal of this paper is to investigate African American attitudes toward small business development training courses. Another purpose of this study is to provide indirect empirical support for the training-business creation model. Theoretical Development and Literature Review The training-business creation model proposes that training courses are one of the helpful (but not always necessary) conditions for small business development. Training refers to the transfer of information in a formal setting for the purpose of increasing human capital. In this study, training refers to courses on various aspects of small business maintenance, enhancement, and creation (and thus entrepreneurship) made available to the general public usually at no or minimal cost. Human capital refers to the knowledge, skills, and capabilities a person possesses (Becker and Murphy 2000; Becker 1993; Coleman 1988; Schultz 1981, 1971). In the entrepreneurship field, the two main variables that have been discussed as comprising human capital are education and experience (Chaganti and Greene 2002). …