THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Monday, September 12, 1994 TAG: 9409100450
SECTION: BUSINESS WEEKLY PAGE: 8 EDITION: FINAL
TYPE: Cover Story
SOURCE: BY STEPHANIE STOUGHTON, BUSINESS WEEKLY STAFF
DATELINE: NEWPORT NEWS LENGTH: Long : 141 lines
Charles Trumble was 19 when he opened his own T-shirt shop in a minimall near Newport News Shipbuilding.
Today, his store is four times larger and packed with bright-colored designer clothing, shoes and music cassette tapes.
``I started in the back of the mall,'' Trumble said from behind a glass counter draped with Ralph Lauren-Polo shirts. ``Now, I'm in the front.''
Trumble, 25, scrimped and saved to build up his store, Future Hits, in Peddler's Village. He furiously pumped profits back into the store, buying more merchandise and renting more space in the minimall.
What makes Trumble's venture stand out is that he started with a small amount of cash and emerged with a booming business in this shipyard community.
No loans, no investors, no small-business workshops - he had only work experience in his father's shop, his own cash and his own dollar sense.
Dozens of young minority business owners like Trumble have taken root at Peddler's Village. Although they lack loads of money and don't have clear access to conventional loans, they have been able to take advantage of the minimall's inexpensive ``everything included'' rent package and its location on busy Jefferson Avenue.
For eight years, the indoor shopping center has been an incubator for minority-owned businesses. A handful of stores have grown up and moved out, graduating to new quarters throughout Hampton Roads.
The turnover is rapid. In the past three months, five young black entrepreneurs have opened new stores, replacing others who have failed or have moved on to bigger places, the minimall's management said.
That growth hasn't gone unnoticed.
``I am very enthused with the number of young African-Americans there,'' said Glen Francis, sales manager of the Hampton Roads Black Pages, which lists many of the area's minority-owned businesses.
``They can get their feet wet there, develop clientele and then go on to bigger things,'' Francis said. ``This can only help other aspiring African-Americans. Family and friends can say, `If they can do it, so can I.' ''
Recently, bank loan officers have begun to notice some retailers in the minimall. When the phone rings at Trumble's Future Hits, it's sometimes someone who wants to help him expand.
But the young businessman is leery.
A loan?
``No way.''
Investors?
``Forget it.''
Trumble's financial attitude is echoed by other young black owners at Peddler's Village. They are hesitant to join what they call The System: banks, the Small Business Administration and other organizations.
While local officials are elated by the rising number of young black business owners at the minimall, some say they are dismayed by the merchants' distrust and do-it-alone financial attitude.
``That's the tragedy of it,'' said Willard E. Pretlow, who helps advise small businesses through the Urban League of Hampton Roads. ``There is nothing wrong to say, `This is mine.' But you can't do it alone all the time.''
Pretlow says small-business owners need more financial education. They should improve their knowledge of accounting, advertising, business law and the loan process, he said.
He also encourages all merchants to consider incorporating their business if they want to expand. Through incorporation, an owner can better sell ideas to banks and investors, he said. That owner also is partly insulated from lawsuits such as those filed after someone slips and falls in the store.
``In a sole proprietorship, you are on the line,'' Pretlow said.
There is at least one big drawback in forming a corporation: the tax bill.
Charles A. Wooding, director of the Business Assistance Center at Hampton University, suggests that small-business owners consider forming a limited liability company. That would give owners protection against lawsuits without the mammoth tax bills.
Financial advice is appreciated but not always heeded by the young black owners at Peddler's Village. And the entrepreneurs say there are good reasons behind their skepticism. They say the paperwork for Small Business Administration loans is intimidating, and it's nearly impossible to get a bank loan.
``The banks wouldn't give anything to me, so I inched my way up,'' Trumble said. ``Now, I don't need them anymore.''
Banks don't divide their business-loan figures by race, and Trumble and other merchants say they don't believe race is the biggest issue.
``It's just being in business for the first time,'' he said. ``It happens to everyone.''
The SBA recently decreased the amount of paperwork required for loans, spokesman Mike Stamler said. But he acknowledged that the agency is still working on its loans to minorities. Last year, loans to black merchants nationwide through the agency's guaranteed-loan program totaled $129.7 million, which represents just 2 percent of the total $6.41 billion.
``It's a very small percentage,'' Stamler said. ``It should be more.''
There is yet another option for merchants: attracting investors. But at Peddler's Village, some owners say incorporation and investment mean losing control.
``I really don't like to get involved,'' said 23-year-old Nicky Copling, owner of a nail salon. ``I've had a lot of people tell me about the hassles.''
Copling has been doing manicures for more than four years. In 1992, her original, flawless work - decals over unblemished coats of polish - was in demand so much that she began making house calls.
Last year, she opened The Perfect 10 in Peddler's Village.
Lately, her friends have begun to tell her things like, ``Nicky, you really need to get your own store somewhere'' and ``You can get a bigger store.''
The customers waiting in chairs to get their chipped nails filed, buffed and glossed tell Copling the same thing. In response, she set up three extra tables and hired a few part-time manicurists to help out during rush hour.
``I'm taking it slow,'' she said.
But to take The Perfect 10 to the top, Copling knows she'll have to keep incorporation and outside investment in mind, though she thinks she might lose some control.
Opening a business up to investors isn't as bad as it sounds, say Angie and Alex Rowe.
Last year, the couple took their International Art Gallery, a collection of African-American art, from Peddler's Village to Newmarket Fair mall in Newport News.
After mulling over their finances, the Rowes finally decided they needed to incorporate to expand. Last month, they opened their second gallery in Military Circle mall in Norfolk.
``Doing it alone? Yes, we did have those thoughts,'' Angie said. ``But you have to move beyond that thought and look at what is a part of growth.''
The Perfect 10's Copling says she keeps hearing that advice and has stored it away for possible use in the future. But her current approach is the essence of entrepreneurship.
``First, I'd like to see if I can do it by myself.'' ILLUSTRATION: Color photos by Ian Martin
Peddler's Village, a minimall in Newport News, has been an incubator
for young minority entrepreneurs like art gallery owners Alex and
Angie Rowe.[color cover photo]
Charles Trumble, right, owner of Future Hits, a clothing and music
store
Nicky Copling, left, owner of The Perfect 10, a nail shop.
by CNB