A conceptual model of small business performance is developed to show the determinants of subjective indications of business success and lucrativeness, using a sample of Black American business entrepreneurs. A framework is constructed for an investigation of how socioeconomic environmental factors as family background, support from the community, assistance from family and friends, and the characteristics of individual strategic decision-making that involved seeking capital, acquiring information external to the community, organizational membership, attracting customers of other ethnicities, providing better service and adopting unique products and services contributed to self-perceptions of business success and a belief that being an entrepreneur is more lucrative than working for wages. This is an initial step toward a theory of Black American small business performance. This approach allows us to utilize the literature on small business as well as the rich literature on race and ethnic enterprises. In this study an entrepreneur is defined as person who presently operates a small business that he or she started.

Key words: Black American entrepreneurs, self-perceptions of success

Measuring the performance of entrepreneurial firms has produced a significant and rich tradition of scholarship. This research is nested within efforts to understand the dynamics, or the many dimensions, of small or growing firms. The literature on business performance includes definitions that are either objective or subjective, with some observers concluding that no consensus exists on how to define the performance of small entrepreneurial firms (Murphy, Trailer & Hill, 1996).

Among the objective definitions are: simply continuing to stay in business (Van de Ven, Hudson, & Schroeder, 1984; Reid, 1991), the amount of sales and financial returns (Duchesneau & Gartner, 1990; Kalleberg & Leicht, 1991; Tigges & Green, 1994), and operational performance indicators such as the introduction of new and quality products (Venkatraman and Ramanujam, 1986). Objective financial measures are criticized because small business owners may be unwilling to reveal accurate and specific information related to their financial condition. Further, Kotey and Meredith (1997) have argued that small business owners do not always equate financial performance with business success. Instead, they create businesses for a variety of reasons and their perception of business success can include a wide range of expectations concerning performance.

Among the subjective factors related to business success are the entrepreneur's personal assessment of having demonstrated appropriate personality characteristics and managerial skills (Ibrahim & Goodman, 1986), having an internal focus and belief that one has important control over business results (Brockhaus, 1980), and having the personal satisfaction an entrepreneur derives from the business (Solymossy, 1997) irrespective of the financial returns involved (Cooper & Artz, 1995). Subjective evaluations of success made by entrepreneurs do not differ a great deal from objective indicators according to Venkatraman and Ramanujam (1986), and they remove the problem of response bias due to participants not answering sensitive financial questions (Besser, 1999).

This purpose of the present study is to develop and test a framework that addresses how Black American small business owners perceive their performance. A conceptual model is developed where the outcomes reflect the entrepreneur's subjective view of his/her business performance. The independent variables include measures of family socialization, Black community resources available to assist small business, resources from family and friends; and measures of business strategy that include acquiring financial capital, locating business information external to the community, attracting customers of other ethnicities, and market orientation. The approach to studying business performance synthesizes the extant literature on small business as well as the rich literature on race and ethnic enterprises. In this study an entrepreneur is defined as a person who presently operates a small business that he/she, or a larger group, initiated (Becherer & Maurer, 1997).

Theoretical Model

Ahiarah (1993) advanced a multidisciplinary theoretical framework that included three factors, which facilitate Black American business success. The first, individual-specific factors, requires the entrepreneur to have drive, knowledge, emotional and mental ability, interpersonal skills, the ability to make correct decisions and the motivation to act when opportunities and deadlines occur. The second, environmental-consequent factors, include access to customers, capital, personnel and possible government assistance. The third factor, Black American group activities, include lobbying for affirmative action and emphasizing community values and attitudes which provide role models and networks resulting in the start up and support of Black American business.

The Ahiarah model is more applicable to the well-developed Black business communities of the past. Many Black communities today do not have the resources and human capital to encourage and maintain small businesses that were so prevalent during the early years. In today's world one must give consideration to selling outside the racial community. While Ahiarah's model is comprehensive and provides useful direction, a model is needed for Black communities of different sizes, including those that are less well organized, and which provide insights on how to develop a small base with limited human and capital resources.

Accordingly, a Black American socioeconomic environmental model of business performance is proposed that assumes interdependent links, among the components of family background, level of human and capital resources of the Black community, primary group assistance from family and friends that influence the kinds of business strategies chosen by an entrepreneur to produce perceptions of business success and lucrativeness. This model is based on the theoretical assumption that perceptions of business performance are a multiplicative function of various socioeconomic environments and strategic managerial skills.

In an effort to build a theory, key constructs and their interrelationships are displayed in Figure 1. This is a process model with components hypothesized to have a significant effect on a small Black American entrepreneur's perception of business success and lucrativeness. This conceptual model recognizes that bidirectional influences, such as family socialization or the level of primary group assistance from family and friends, may mutually affect how the Black community provides assistance. Dimensions of each component in the model overlap and a component may have a reduced influence depending on where various human and capital resources are primarily found - whether in the institutions of the ethnic community or among family and friends. While the mechanism for the model is still hypothetical and insufficiently specific empirically, it is posited that the level of socioeconomic resources in the Black community influences the kinds of strategic business decisions made which also affect self-perceptions of business success and lucrativeness.

The first component of the model is childhood family background, measured by whether or not a parent is or has been in business and a parent's level of education. It is assumed that higher achieving parents socialize their offspring to be successful in whatever occupation they choose. Childhood learning experiences are not limited to the family but are also influenced by the community role models and culture.

The second component and core construct refers to the availability of human and financial resources from the Black community to assist the small business owner. Black communities differ in their ability to provide resources and this ability affects an entrepreneur's decision on whether or not to seek resources from the larger society or rely more heavily on the resources of family and friends. To account for the influence in different levels of Black community socioeconomic resources on strategic decision-making, a typology of three kinds of Black communities and their available resources is constructed. A typology is valuable because each type includes key dimensions applicable to members of the same type to produce a group profile.

Figure 1

Associations Between the Components of the Conceptual Model of Black Small Business Performance

Type 1 represents a Black community with significant resources including financial institutions, potential customers of higher socioeconomic status, strong self-help networks, and numerous high performing entrepreneurs who mentor new and developing businesses. High performance oriented entrepreneurs may successfully conduct their businesses entirely within the Black community. Type 2 have an intermediate level of resources with fewer Black lending institutions, a lower number of potential customers in the middle to higher socioeconomic bracket, weaker self-help networks and fewer high-performing entrepreneurs available to advise smaller business owners. Type 3 may have a small population with few to \no lending institutions, a population composed primarily of lower socioeconomic individuals, limited community resources, few high-performance entrepreneurs, marginally performing business persons who cannot advise new business owners and weak self-help networks to provide assistance. An entrepreneur may be willing to be marginally successful according to the criteria of a low socioeconomic resource community or may look outside the community for assistance and have different criteria for success. It is against the backdrop of a socioeconomic environment represented by one of three types of Black communities that an entrepreneur must work out a plan for a high performance business.

The third component in the model is primary group assistance, measured by family and friends who may provide advice, paid or unpaid employment, and financial help. In a Black community with many financial resources and mentoring opportunities, an entrepreneur may not find it as necessary to rely on family and friends for low wage or no wage labor and financial assistance. In a Black community with medium-sized resources, it is more important for an entrepreneur, especially in the early stages of start up, to rely on family and friends for labor and capital. In a limited resource Black community with few successful entrepreneurs available to mentor a new business, help from family and friends for labor and finances may be critical to the startup and continuance of the business.

The fourth component of the model relates how the level of the community's socioeconomic resources influences Black American entrepreneurs and their choice of business strategy. Within a high socioeconomic resource community, successful Black entrepreneurs may choose to market goods and services appropriate to the needs only of co-ethnics, gain business information primarily from Black American periodicals and become immersed solely in the institutions of the Black community. To have a high performing business in a Black community of intermediate socioeconomic resources an entrepreneur may have to include non co-ethnics as customers, sell products and services that recognize the needs of other ethnicities, join a mixture of Black American and other organizations, and gain information from both Black and non-Black magazines and newspapers. In a Black community with limited socioeconomic resources a high performing entrepreneur will more likely have to enlarge the customer base to include other ethnicities, market unique and better products and services that reflect the needs of these customers, join non-Black American organizations, acquire loans from lenders outside the Black community and get a majority of business information from non-Black newspapers and magazines.

The last component of the model, or the outcome component, is the level of business performance. It is measured by personal attribute indicators of self-perceptions of business success and whether or not being in business for oneself is more or less lucrative than being an employee.

Supporting Literature

The model outlined above will be used as the conceptual framework for organizing the literature review. The business literature has utilized social learning theory to show how successful business performance by an entrepreneur is influenced by childhood family socialization experiences (Scherer, Adams & Wiebe, 1989, 1988). Parents who are in business act as role models and influence their offspring's decision to become an entrepreneur (Hout & Rosen, 2000; Fairlie & Meyer, 2000; Dunn & Holtz-Eakin, 2000). An association was found between a father who has a higher level of educational attainment and a child's choice of becoming a small business owner (Hisrich & Brush 1983; Fairlie, 1999). Higher achievements by an entrepreneur's parents create in their offspring higher expectations and then later a more realistic perception of successful business performance.

The collective resources of a minority community can provide a support network for the acquisition of human and financial capital to enable an entrepreneur to set up and maintain an entrepreneurial business (Cummings, 1980). Minority communities differ in the extent to which their support networks provide adequate resources to assist small businesses. This difference can be related to a movement from the status of immigrant newcomer to the reality of assimilation for the second generation. The creation of self-help networks and institutions was especially strong among Japanese immigrant communities where rotating credit associations to raise capital were established and labor and customers were provided for their small businesses (Levine & Rhodes, 1981). As Japanese Americans became better educated and more jobs became available in the dominant society, ethnic community ties weakened and family life including smaller family sizes reflected the EuroAmerica experience (Rhodes & Woodrum, 1980).

In the Black community religious groups encouraged small business development and provided training in church related enterprises (Fratoe, 1986). The period of trust and self-help for Black Americans occurred during the years between the late 1700s (for free Black Americans) to the late 1950s (for Black Americans who had experienced slavery). The successful business enclaves that were created by Black Americans declined as more opportunities developed in the larger society as a result of the Civil Rights Movement (Butler, 1991). Today, many Black communities do not have the resources to provide sufficient assistance to small businesses (Butler & Greene, 1997). Consequently, many Black American entrepreneurs use personal savings and funds acquired from their families. In interpreting the data from the Characteristics of Business Ownership of the Census Bureau for 1986, Fratoe (1988) found that 10% of Black American entrepreneurs received financial help from their families, a favorable percentage when compared to non-minority and Hispanic groups but far less than Asian entrepreneurs. As Black American entrepreneurs establish credit ratings their ability to get loans from mainstream banking is based on business performance rather than a relation to a racial group.

An important financial and human resource for an entrepreneur is the family, a source for unpaid or underpaid employees. Utilizing family resources make businesses more successful (Butler, 1991) and are also associated with long-term growth (Upton & Heck, 1997). The amount of resources available from family, friends, and the ethnic community depends on the size, social cohesion and wealth within the ethnic community. When resources within the ethnic community are limited, entrepreneurs who strive to be successful must turn to the larger society for assistance. Access to financial resources outside the minority community is necessary for small, limited-resource ethnic communities.

Bates (1989) analyzed the characteristics of non-minority and minority businesses in a nationwide study and found that 26 % of Black Americans who borrowed from banks had larger businesses with higher success rates than Black American non-borrowers. In a study comparing access to capital among minority and non-minority businesses Chen and Cole (1988) reported that Black firms faced their greatest discrimination from banks, except when minority owned financial institutions competed for Black American clientele. To overcome high small business failure rates in the Black community, Black American entrepreneurs need sufficient education, work experience and training, be frequent borrowers of capital and be more leveraged in order to produce enough revenue to survive (Bates 1996).

Business management strategies require information acquisition from various sources for a small business is to succeed. Birely (1985) dichotomized sources of information that significantly affected the running of a business. These include, formal networks such as legal institutions, lawyers and accountants; and informal networks such as family, friends and business contacts. Pineda et al. (1998) distinguished between sources of information, which were either internal to the small business or external from the surrounding environment. Entrepreneurs who saw themselves as competent to make specific kinds of decisions used more effort gathering information from external sources. Some small businesses prefer to network personal, instead of impersonal, contacts to learn about their competition. Specht (1987) examined demographic and population data to understand their markets and acquired information from suppliers, customers, employees and newspapers about their competition without making systematic analysis of the information Hartman et al. (1994) showed how a variety of information sources are necessary to provide new ideas essential for small business survival.

Successful small businesses combine a market orientation focused on satisfying customer needs and a complementary entrepreneurial orientation that involves introducing new products and services and taking risks (Smart & Conant, 1994; Becherer & Maurer, 1997). Both these orientations reinforce the other to produce a learning environment that facilitates the generation of new products and services (Slater & Narver, 1995). Kalleberg (1986), in a study of small businesses in Indiana, found a relationship between innovative behavior that included the introduction of new products and services and an increase in sales and profits.

The Research Study

To test the proposed model, cross-sectional survey research was undertaken. The respondents were Black American small business owners living in West Texas. They were initially selected from lists of entrepreneurs recorded with Black American Chambers of Commerce. Since most Black American business owners did not belong to the Chamber, a majority of the respondents were located through reputation. Once a respondent hadcompleted a survey, he or she was asked to name another entrepreneur who was also surveyed; which created a snowball sampling design.

Eighty percent of the sample of 133 respondents was collected from two neighboring cities forming a total metropolitan area population of 237,132 (U.S. Census, 2000). In City 1, the total population is 121,123 with a Black American population of 5,593 that represents 4.6% of the population of the city and 45% of the total Black American sample. In City 2, the total population is 116,009 of which the Black American population of 8,101 or 7% and represents 35% of the sample. Four percent of the sample came from City 3 of 242,628 with a Black American population of 18,602 or 7% of the population of the city. The remaining 16% came from small rural communities of 25,000 or less, where the Black American population was less than 1%. In Cities 1, 2 and 3, the Black business community was located primarily in areas with large Black American populations where most of the customers were Black American with a geographically adjacent Hispanic population. In the rural communities of 25,000 or less, the small Black American population did not form a community but was dispersed in different sections of the communities where Black American entrepreneurs did business with a variety of ethnic groups. The demographic characteristics of the sample included 62% males and 38% females, marital status, 65% married and 35% single, and a mean education level of 13.7 years.

A self-administered survey was distributed to the respondents. There were 80 questions on the survey that included multiple indicators of concepts ranging from family background and socialization into business ownership, organization affiliation and involvement, motivations for going into business, personality characteristics, community and family support for business activity, prior entrepreneurial experiences of the respondent and their family members, factors associated with successful business operation, strategies used in business, and subjective perceptions of business performance.

For the dependent variables, two indicators of subjective perceptions of business performance were singled out as the dependent variables because it is difficult to get accurate financial data and owners have non-financial bases for evaluating their business performance. The first performance indicator encompassed a variety of financial and general satisfaction dimensions that read: "Considering how long you have been in business, how successful do you think you have been so far?" The indicator was measured on a four-point scale from very successful to very unsuccessful. The second indicator involved a self-perception of financial performance read: "Do you think your business is more lucrative or less lucrative than other types of occupations (not including owning other businesses) in which you could work?" This is an indirect measure of performance in which the lucrativeness of being in business is compared with other hypothetical occupational choices. There were five response categories ranging from significantly more lucrative to significantly less lucrative with a middle category of about the same. As the data were somewhat skewed towards more lucrative responses, it was decided to dichotomize the variable into two relatively equally sized categories (1 = lucrative, 2 = about the same or less lucrative). The two indicators of performance measure different underlying constructs and for that reason does not allow for combining them into an index.

Turning to the independent variables, two family background measures were used that included "How many years of schooling did your mother receive?" followed by the same question for the father. The response was number of years. Sources of information was measured by "How many newspapers and/or magazines that are sponsored by your race do you read on a regular basis?" followed by "how many newspapers and/or magazines do you read on a regular basis?" For both questions the response categories range from none, 1, 2, 3, or more than 3. Respondents were asked "How much help with your business did you get from your immediate family?" The response categories were much help, some help and no help. Ethnic organization membership was measured by "Do you currently belong to any organizations that are predominately comprised of members who are Black American?" The response categories were yes or no. Respondents were asked, "If you were to have financial problems related to your business who would you ask for assistance?" The response categories were Black community members or friends who are Black and banks. A question about ethnicity of customers asked "What percent of your customers fit into the following groups?" The groups were Black American, Caucasian, Mexican-American, Asian and Other. Respondents were asked, "What best describes your business strategy?" Out of a list of nine choices those that were significantly associated with business performance, better service and a unique service/product were most often selected.

Results

Tables 1 and 2 display the results of logistic regression analysis. In Table 1 the dependent variable is the respondent's perception of his or her business success with the significant predictor variables. The findings indicate that help from immediate family members had a positive relationship to the respondent's perception of success. Those who state they receive "much help" were 2.311 times more likely to consider their business "very successful." Whether the respondents regularly read "newspapers and/ or magazines that are sponsored by your racial group" had a negative effect on perceptions of success. These respondents were 67.9% as likely or 1.47 times less likely to consider their business to be very successful. The number of non-Black American magazines and/or newspapers that a respondent reads regularly (maximum = 3) had a positive effect. For every unit increase in the number read, the respondent was 1.17 times more likely to consider his/her business a success.

Table 1: Logistic Regression Model Predicting Perceptions of Success

Table 2: Logistic Regression Model Predicting Perceptions of Lucrativeness of Business

The proportion of the respondents' customers who are Mexican- American had a positive effect on perceptions of success. For every percentage increase in the proportion of Mexican-American customers there was approximately a 4% increase in the likelihood that the respondents considered their businesses successful. This is a multiplicative term, so a 10% increase in the proportion of Mexican- Americans does not translate simply to a 40% increase, but a 49% increase. Respondents who are members of a Black American organization report they are much less likely to consider their business a success (10 times less likely). The model has an overall modified R square of .253 .

The dependent variable displayed in Table 2 is "Do you think your business is more lucrative or less lucrative than other types of occupations (not including owning other businesses) in which you could work?" This variable is dummy coded 1=more lucrative, 0=all other answers. The mother's years of education had a positive effect on the respondent's perception of how lucrative his or her business is. Each year increase in the mother's education level increased the odds that the respondent answered that his or her business is more lucrative by 1.21 times. The father's education level operates the same way as the mother's education level with a 1-year increase leading to a 16.5% increase in the likelihood that respondents will consider their business to be more lucrative than available occupations. Whether respondents would turn to community members or to banks, for financial assistance, operates similarly. Those respondents who indicated they would turn to either for help are more likely to consider their business to be more lucrative. Respondents who rank offering a unique product or service as very important are 2.745 times more likely to consider their business more lucrative. Respondents who rank providing better services are 4.131 times more likely to consider their business more lucrative. The percent of customers who are Mexican-American has a positive effect on whether the respondents consider their business more lucrative. Each percentage increase in the proportion of Mexican- American customers increase the odds that they consider their business more lucrative by 2.7 percent. The model has an overall modified R square of .395.

Discussion and Conclusions

The findings of this research suggest that the two outcome measures of business performance, self-perceptions of business success and whether or not being in business for oneself is more or less lucrative than other occupations, have both shared and differing predictors. These results suggest that the proposed model has broad application that reflects the multidimensional nature of how business performance is evaluated by an entrepreneur. Research has shown that the association between an independent variable and performance varies according to the performance measure selected (Murphy, Trailer and Hill, 1996).

The first component of the model is the construct family background. When measured by parental small business, ownership experience showed no significant association with either of the two measures of business performance. The research literature indicates that successful small business owners were likely to have been raised by parents who were or had been in business (Duchesneau & Gartner, 1990). This study found that higher parental education demonstrated a weak association with lucrativeness of being self- employed because parental socialization is mediated by the socioeconomic environment of the Black community. This also contributes to the nurture of youth and the provision of role models that later \affect a perception of business performance. In their study of women entrepreneurs, Hisrich and Brush (1983) found the respondents' parents were better educated than members of the general population. In the present study the socioeconomic conditions of the Black community did not provide the environment conducive to creating role models of successful businesspersons, both for parents and their children.

Black American parents with higher education instilled in their children a motivation to excel at whatever they chose. A generation of higher educated Black Americans saw, with civil rights legislation, increasing opportunities in government and large business and often chose not to be self-employed. When parents saw that so many family businesses in a limited-resource Black community were marginally profitable, it was hard for them to encourage their children to become entrepreneurs. In recent years, business and government organizations have been downsized so opportunities for advancement through a wage position have declined. Success- motivated Black Americans have been lured away from wage work into self-employment where, with the achievement values instilled in them by their higher educated parents, they saw more opportunities in which to succeed.

The second link in the model is the level of socioeconomic Black community resources, the backdrop that influences subsequent behavior and later perceptions of business success. In a high- resource, and to a lesser extent, an intermediate resource Black community, there are secondary group institutional structures represented by business organizations, financial institutions and successful entrepreneurs that can mentor new and developing businesses. In the sample community, the secondary institutional structures included underdeveloped Black American Chambers of Commerce, weak resourced Black American business organizations, insufficient Black community lending institutions, and few successful business persons who could provide mentoring and financial aid to new businesses. Consequently, the success oriented respondents had to direct their business behavior to the use of resources from family and friends and from outside the Black community.

The third link of the model shows how the primary group, composed of family, friends and members of the community, mediated the socioeconomic condition of the institutions of the Black community. While the primary group is affected by the character of the Black community, it can compensate for a limited institutional resource community by providing more assistance than would be required in a high resource Black community. Respondents who reported family members assisted with the business significantly predicted self- perceptions of business success. The strongest predictor that self- employment will be more lucrative than wage work was having received financial help from members of the community and friends. For example, the limited resources of a Type III Black community were compensated for by assistance from family, friends and members of the Black community who provided free or low paid labor, financial assistance and advice. The small size of the Black community and the lower socioeconomic status of its population suggested that many small businesses existed at a marginal level preventing owners from being able to sufficiently encourage and assist other Black businesses. Fratoe (1986) has pointed out that small Black communities with few businesses could not provide support networks for their small businesses, as could larger Black communities. Only with support networks coming from outside the community could small Black American businesses receive sufficient assistance.

The fourth link in the model showed how the preceding set of events affected the kinds of business management strategies used to moderate the level of socioeconomic secondary institutional and primary group structures to create a perception of business success and lucrativeness. In high resource (Type I) and to some extent intermediate resource (Type II) Black communities the business strategies used by entrepreneurs are more flexible in that they can either conduct business within the community or expand into the larger society to become successful. In the low resource (Type III) Black community under study, high performance oriented entrepreneurs responded to the challenges of their business location by selecting strategies that drew them into the surrounding society. Kotey and Meredith (1997) found that persons with entrepreneurial values, when operating in a difficult business environment, would take proactive business strategies to achieve a high performance. A significant predictor of self-perception of success, among respondents, was choosing not to read Black American publications but instead to get information from Non-Black American magazines and newspapers. Lang et al. (1997) found that entrepreneurs who sought information outside their business environments did so either because of competitive threats in their current location or because they saw greater opportunities in other domains.

Organizational affiliation is a networking business strategy entrepreneurs use to advance their businesses through interacting and sharing ideas with others. The strongest predictor of perception of business success among the respondents was not to belong to Black American organizations, an indicator that entrepreneurs saw the need to make contacts and expand the market of their businesses outside of the Black community.

Access to financial capital is a primary business strategy for achieving success (Aldrich & Auster, 1986). Bates (1996) observed that Black American businesses frequently have insufficient equity capital and poor relations with banks, which reduces their sources for loans and contributes to business failures. The limited banking resources of the Type III Black community meant entrepreneurs who saw their businesses as lucrative also saw the need to get loans from commercial lenders outside the Black community.

The small Black American customer base meant entrepreneurs had a restricted market for products and services and more competition between Black American businesses for the limited clientele. Entrepreneurs who perceived their businesses as successful and lucrative expanded their businesses by including Hispanic groups in their customer base. The source of Hispanic customers is, in part, due to the heavy migration of poor Mexicans across the border and who settle in and around the Black community. Consequently, Black American entrepreneurs do not have to expand their geographical area significantly to reach out to these customers. However, they have to adjust to the product demands of their non co-ethnic customers with whom they both share minority status. D'Amboise and Muldowney (1988) found that entrepreneurs who share values with their customers are able to align and interact well with both ethnic groups.

The entrepreneurs in the study who perceived their businesses as lucrative operated in a competitive and turbulent business environment due to a small Black community, the presence of neighboring large chain stores, a growing Hispanic community, and factors that required some risk taking. They had a strong marketing orientation in that they were concerned about satisfying customer needs and subscribed to entrepreneurial values by providing better services and introducing unique products and services for their changing customer base. Support for these findings appeared in the research of Becherer and Maurer (1997) which indicated that entrepreneurs who operate in a difficult business environment need to have a marketing orientation that emphasizes new products and services in order to realize higher profits.

It is important to understand the socioeconomic dynamics that influence minority small business development, especially when the United States is increasingly becoming a multicultural society. New ethnic majorities are appearing in sections of the country whose business practices reflect the culture of the inhabitants. If American society is to prosper it is necessary that research be conducted on factors that contribute to successful and lucrative businesses in ethnic communities.

Implications for Further Research

To construct a theory of the determinants of Black American small business performance, a number of issues need to be addressed. First, future studies should include a conceptual model that involves a multidimensional operationalization of performance. Second, the socioeconomic environmental construct operationalized by the three types of Black communities needs further specification of resources. The specification would include, among others, availability of employees, kinds of competitors, particular business associations and accessibility of suppliers and vendors. Third, since the type of Black community and its resources are posited to influence business decisions, the domain of possible business strategies associated with perceptions of business success and lucrativeness should be expanded. Fourth, this study investigated Black American entrepreneurs located in a limited resource Black community. Further research should look at the determinants of a how a small entrepreneur achieves a perception of success and lucrativeness in large and intermediate resource Black communities. Fifth, this study found that independent variables measuring indicators of trait and personality characteristics were not significantly associated with perceptions of success and lucrativeness. Further research with a wider range of performance measures and an expanded number of trait and personality characteristic indicators may produce significant associations.

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Colbert Rhodes is Emeritus Professor of Sociology at The University of Texas, Permian Basin. He research interests include gerontology, statistics and social thought. John Sibley Butler is Professor of Management and Sociology at The University of Texas at Austin. He holds the Herb Kelleher Chair in Entrepreneurship and Small Business and is the Director of the IC^sup 2^ Institute. He has published extensively in organizational science.

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