CHAPTER IIToC

The Volume of Business

Indications of the volume of business are in accord with the conclusions from the size of Negro business enterprises. Volume of business was measured (1) by the valuation of tools, fixtures, etc., used in the conduct of the business, (2) by the amount of merchandise kept on hand, if the business was such as required a stock of goods, and (3) by the total gross receipts of the business during the two years, 1907 and 1908.

I. VALUATION OF TOOLS AND FIXTURES

Wood and ice dealers need to invest very little in tools and fixtures. Fourteen out of 19 coal, wood and ice dealers had less than ten dollars so invested. They needed only shovels, baskets and push-carts. The estimated valuation of tools and fixtures of the largest number of establishments fell between $50 and $399; 90 were estimated to be between $50 and $199, and 63 were estimated to be between $200 and $399. Besides these, 37 establishments—1 broker, 5 employment agencies, 1 grocery, 5 hairdressers, 9 restaurants and lunch rooms, 2 "busheling" tailors and 14 miscellaneous had tools and fixtures estimated, with allowance for depreciation, to be worth more than $10 and less than $50. It is important to note, however, that while the numbers with estimated valuation of tools and fixtures between $400 and $1,499 is only 50, those estimated at $1,500 and over number 33.

Table XXIII. Estimated Valuation of Plant, Tools and Fixtures of 309 Negro Business Enterprises, Manhattan, 1909.

Judged, then, from the valuation of tools and fixtures, the magnitude of Negro business enterprises is considerable and falls into three classes: one of comparatively small valuation, 184 estimated below $400; one class of medium valuation, 50 estimated between $400 and $1,499; and one of comparatively large valuation, 33 at $1,500 and over.

The details of these valuations of tools and fixtures are given in full in Table XXIII (p. 110).

2. THE AMOUNT OF MERCHANDISE ON HAND

Next to valuation of tools and fixtures, the amount of merchandise kept in stock is a good index of the magnitude of the business done by many enterprises. Of course, the business of brokers, express and moving-van firms, employment agencies, and some miscellaneous enterprises could not be measured by the amount of stock kept on hand. Also barber shops and pool and billiard rooms sometimes keep a small stock of cigars, tobacco, etc. So these firms can not be so measured. The statements about merchandise on hand were accurately estimated either from figures on the books of the firm or from rough inventories of the stock on hand made with the assistance of the proprietor.

Negro business enterprises for the most part are small retail enterprises and do business on the scale of establishments of this type. They have not yet accumulated the capital nor gained the credit to engage in wholesale trade or to carry a stock of merchandise large in quantity or variety such as an extensive patronage demands. But they do handle a considerable amount of business with the small capital they have to invest. When this is compared with the gross receipts for 1907 and 1908 the showing is very creditable.

Table XXIV. Estimated Valuation of Merchandise on Hand in 241 Negro Business Enterprises, Manhattan, 1909.

For, of the 302 enterprises for which estimates of stock on hand were obtained 159 firms, including 46 barber-shops and 9 pool and billiard rooms that kept small stocks of cigars and tobacco, had a stock of merchandise on hand estimated at less than $50; 20 others ranged between $50 and $99; 38 others had stock on hand in amounts between $100 and $299, while 23 fell between $300 and $599. Thirteen enterprises kept a stock estimated between $600 and $1,000; six ran from $1,000 up, while seven were unknown. In a word, classified by amount of merchandise kept on hand, the firms fell into three classes, the largest class was composed of those having a stock valued at less than $50, the next class grouped those between $50 and $600, and the third and smallest class contained those with stock on hand valued at $600 and above. It will be of help to see in detail how enterprises in each class were grouped according to estimated valuation of merchandise on hand, so Table XXIV showing this is given (p. 112).

3. GROSS RECEIPTS IN 1907 AND 1908

The final and concluding item in measuring the magnitude of Negro business enterprises is the amount of gross receipts of the firms covering a given period of time. For this purpose the years 1907 and 1908 were selected, the first because the greater part of it was before the panic of 1907, the second instead of 1909 because a completed year at the time this canvass was made. A close study of the accompanying table shows that the panic had considerable effect upon the gross receipts of these firms. For example, in 1907, 32 firms had gross receipts less than $1,000; in 1908, 38 firms were in the same group; in 1907, 37 firms did a business of between $1,000 and $1,999; in 1908, 38 firms had the same fortune. And even this does not always show the falling off in gross receipts of the individual firm unless the decrease was sufficient to carry it into a lower group.

Of the total 309 Negro enterprises, 118 were established too recently to have gross receipts in 1907 and 1908, and 63 did not furnish sufficient evidence, so they are classed as doubtful and unknown. This leaves, therefore, 128 enterprises about which sufficient statements of gross receipts were secured to justify discussion. The figures for these, however, were carefully ascertained. For 115 establishments the exact figures were taken from records kept by the firms for the years 1907 and 1908, or the larger part of those years, while the other 13 are estimates based upon careful statements from proprietors and employees of their receipts for months or weeks at different seasons of the two years.

Compared with the general retail lines in New York City the magnitude of Negro business is creditable when judged by gross receipts. Of the 128 establishments, 87 in 1907 and 85 in 1908 handled a gross business of $2,999 or less; 32 firms in 1907 and 38 firms in 1908 had gross receipts between $3,000 and $10,000; and 9 firms in 1907 and 5 firms in 1908 carried on business operations which ranged in gross receipts above $10,000, four of these in 1907 and two in 1908 being $15,000 or more. Considering the amount of merchandise kept on hand and the valuation of tools and fixtures, this business showing indicates that the small amount of capital invested is handled with considerable energy and ability to carry on such an amount of gross business.

It should be noted also that out of 69 establishments in 1907, which had gross receipts less than $2,000, 14 were barber shops, 8 were coal, wood and ice dealers, 4 were employment agencies, 3 were express and moving-vans, 9 were tailors, pressers, etc., and 8 were miscellaneous—a total of 46. And in 1908, out of 76 establishments with gross receipts under $2,000, 18 were barber-shops, 8 were ice, coal and wood dealers, 4 were employment agencies, 3 were express and moving-vans, 10 were tailors and pressers, and 9 were miscellaneous—making a total of 52. The majority of the more important classes of business firms such as brokers, barber shops, grocers, printers, hotel and lodging-house keepers, restaurant and lunch-room proprietors, saloon and café firms and undertakers have gross receipts from $2,000 a year and over.

Table XXV. Gross Receipts for 1907 and 1908 of 309 Negro Business Enterprises in Manhattan.

The full showing of classified gross receipts of the 309 establishments is given in Table XXV (p. 115).

Measured, then, by valuation of tools, fixtures, etc., by merchandise on hand, and by gross receipts in 1907 and 1908, Negro enterprises with a small command of capital and credit do a comparatively large gross amount of retail business.

CHAPTER IIIToC

Dealing with the Community

The severest test of a business enterprise is its relation to the community, both the commercial houses with which it deals and the consuming public to whom it sells. With the former a firm must establish credit, with the latter it must build up confidence. Credit is established by the prompt payment of bills, the length of time a firm has been in operation allowing time to make a good reputation and its business methods in dealing with its suppliers. The confidence of customers is secured by the care and accuracy with which orders are filled, the length of time the firm has been in a certain locality and patrons have dealt with it and by the whims and prejudices of the community or locality.

It was out of the question to get data which would cover all of these points, but sufficient material was gathered to throw considerable light on (1) the length of time the firms had been established, (2) the length of time they had been situated at the particular address where they were found, (3) the means used in keeping the accounts of sales, expenditures, etc., (4) whether they gave credit to customers and whether they received credit from suppliers, and (5) what proportion of their customers were white and what proportion were colored.

I. AGE OF ESTABLISHMENTS

Negroes are often said to be able to start but unable to continue in undertakings which require determination, persistence, tact, and which involve strenuous competition. This opinion is certainly not borne out by the age of their business enterprises in New York. For, in the face of conditions they had met in beginning business in New York City, only 51 out of the known 309 enterprises had been established less than one year; 67 between one and two years; 114 between two years and six years, and 33 between six years and ten years. Twenty-two had been established between ten and fifteen years, and twenty were fifteen or more years old, nine of them having been established twenty years or more; the age of two was unknown. When it is remembered that during the first decades after emancipation the larger number of the most energetic Negroes was absorbed in professional occupations, principally teaching, because of the great need in race uplift, and that business pursuits have had until within the last few years minor consideration, to say nothing of trials and failures in the effort to gain business experience, the age of these enterprises must be counted a creditable showing. And it is a good recommendation to the commercial world that the Negro has not made a reputation for bankruptcy assignments. When one reflects that nearly all of these proprietors and promoters have migrated to New York City from less progressive communities and that the chances to get experience in a well-established business before they attempt to start an enterprise for themselves is, except in very rare cases, denied Negroes, the permanency of the ventures in the commercial current deserve commendation.

2. PERMANENCE OF LOCATION

No less interesting than the length of time a firm had been established was the length of time it had been located at the address where it was found by the canvasser in 1909. The exact causes which induce the Negro firms to change addresses could not be ascertained, but 81 out of 275 had been at the address where they were found less than one year, although, as shown above, only 51 were less than one year old; 72 had been at their present address between one year and two years, which leaves a smaller margin between that number and the 67 shown to have been established that length of time. There was a similar small margin of comparison in the groupings of two to four and four to six years between the time the firms were established and the length of time they had remained at the one address. This shifting is due probably to the movements of the Negro population upon which the firms depend for patronage, but partly to inexperience.

Table XXVI. Showing Length of Time 309 Business Enterprises had been at Addresses where Found, Manhattan, 1909.