The doors will not be closed on Black entrepreneurs

Since the onset of the COVID-19 pandemic, upward of 41% of all Black-owned businesses in America have closed their doors for good.

This comes at a time when the share of new Black entrepreneurs was increasing, despite the fact that for the past 20 years, the rate of new entrepreneurs overall has essentially been flat.

Now, America’s entrepreneurs are at the frontlines in the battle to preserve and restore our economy. New and small businesses are at extreme risk in this COVID-19 crisis. Nearly half don’t have the financial reserves to last more than a few weeks. More than a quarter are unprofitable.

Before the crisis took hold, the playing field was far from level. The increase in Black-owned businesses was achieved despite significant barriers to start up – especially in regard to access to capital. Kauffman’s Capital Access Report outlines that Black entrepreneurs are three times less likely to have their loan request approved than their white counterparts. The disparity in the median net worth between white families ($171K) and Black families ($17,600) illustrates a wealth gap that greatly inhibits the ability to start up and the creation of generational wealth.

Now, under the pressure of a pandemic, these inequities are magnified. In our hometown of Kansas City, Black entrepreneurs are doing their part to keep our economy going; to adapt, to innovate; to keep their doors open and folks employed; and to continue growing.

Here, we share the perspectives of six entrepreneurs whose stories extend beyond their own personal success to positive change for their community – despite challenges, pandemic or not. Because our goal shouldn’t be just to restore the economy, but to rebuild it better by ensuring all Americans – especially those who have been historically marginalized – have an equitable opportunity to be a part of it.

Ajamu Webster: Would you rather own a Volkswagen or chauffeur someone else’s limousine?

Just before the 1979 economic crisis, the job market for engineers was hot, and Ajamu Webster asked his mentor why he wasn’t working for one of the big companies. His answer has stuck in Webster’s mind: “He said, ‘Son, I’d rather own my own Volkswagen than to chauffeur someone else’s limousine.’ And that’s all he had to say on that subject.”

During and after college at Southern University, Black engineer, professor, and entrepreneur Morgan Watson, mentored Webster. Watson owned Minority Engineers of Louisiana, or MEL Incorporated, in Baton Rouge.

“He was the one that taught me the importance of being an entrepreneur and also being an entrepreneur in engineering,” Webster says.

His mentor gave him the confidence and knowledge to move to Kansas City and found DuBois Consultants, a civil and structural engineering firm, in 1988. His firm mainly focuses on water infrastructure. And, so far, he says the business has effectively weathered 2020. Though the challenges of a pandemic were new, for Webster, creatively facing adversity is not.

While his mentor’s wisdom and experience was a type of wealth that transferred to Webster seamlessly enough, other types of wealth transfer remain extremely difficult in the Black community.

“There are structural systems of racism that are built in and baked into the American apple pie; and unpeeling all of that and examining that is a very hard conversation to have with people,” Webster says.

Being an African-American owned business and in minority business programming, the program itself, Webster says, can set up a business so that it functions as what he calls a junior player. “It’s very unfortunate. I don’t think that was the intent, but when you put out ideas and strategies, they fall into a social construct. And if the social construct has delegated a role for African Americans, then even the programs that are coming up will fall in that construct,” he explains.

For instance, if he wanted to sell his business right now – as a designated minority-owned business – it would be far more difficult, and he’d be left with far less, than a white-owned business owner would. Webster says the transfer of wealth, and the ability to transfer wealth in a way that allows another to build on it, is next to impossible under the current system.

“Right now, the wealth limit is $1.6 million,” Webster says. “So, if anyone has a net worth of $1.6 million, they couldn’t buy this company, even if they’re African American because that’s too wealthy to be in a program.” The only person he could transfer it to would be another minority without enough net worth go out and get the financing necessary to buy him out and sustain the business.

Webster says that local, state, and federal policy has ensured since the 1860s that the wealth gap between Black and white won’t close. “So that’s why you needed a Civil Rights movement; that’s why you needed amendments to the Constitution,” he says.

Even with a successful, high-skill, employer business, he can’t help but feel concerned about what he’ll be able to pass along to his children. He says that if folks really look at the history of systemic racism, there is only one conclusion: “We’ve got to be more intentional of how we correct that imbalance.”

Dre Taylor: Wealth is health

Dre Taylor is an entrepreneur who isn’t exactly out to make money. His business ventures are about feeding, nurturing, and bolstering the good in his community – changing it from within.

Taylor started Nile Valley Aquaponics in 2015 and the Kansas City Urban Farm Co-op at Swope Park in 2016 with the goal of providing fresh fruits and vegetables to people in Kansas City’s food deserts. Within the next 20 years, his goal is to have grown and distributed a million pounds of produce.

This is only one of his contributions to generational wealth in the urban core.

“I don’t think wealth is always in the form of money,” Taylor says. “Wealth is in the form of information. Wealth is health. So, teaching about how to live a healthy lifestyle … It doesn’t do anybody any good to have a million dollars if you’re not healthy.”

He’s also volunteered to mentor area youth since 2007, first through Big Brothers Big Sisters, and for the past eight years, through Males to Men.

“Our mission is to raise strong, conscious, productive, young men, and re-establish accountable and productive leadership in the community,” Taylor says.

He says he and other mentors have worked with 150 young men from the urban core, teaching them how to navigate society, what it means to be a man, financial literacy, and providing any kind of support for any industry they plan on entering in the near future.

“We’re basically planting seeds in these young men to help grow, and they can help plant more seeds and continue to grow in that form or fashion,” Taylor says.

In a way, like the young men, the farming co-op is still in its investment phase – no returns until the fruit trees mature. And Nile Valley is mid-revamp; Taylor is working toward raising $912,000 in capital to rework the entire set up based on a plan by HOK architecture and engineering firm.

Once it’s up and running, Nile Valley’s model will act as a prototype of a system that Taylor hopes other cities around the world will use to feed people without easy access to fresh food.

The pandemic has slowed fundraising for that, Taylor says, because everyone with an idea is competing for the same funds, which are depleted this year. He’s not terribly off-schedule and says while he doesn’t personally feel that he’s run into too many obstacles as a Black entrepreneur, he knows that’s generally not the case for others in his community.

“I don’t see myself as an individual, I always see myself as a collective, so just because I’m able to do something, I don’t think it’s because of me individually,” Taylor explains. “Access to capital has always been racial.”

He wants to see traditional lending systems dismantled and reassembled with equity in mind. He sees lenders recognizing past injustices toward people of color and working to broaden access to capital, but he doesn’t think that’s creating change quickly enough.

“The same practices can’t take place over and over again just because you give some individuals funds which you benefit from,” he says.

Taylor says he understands that we, as a society, must start somewhere. “You have to start with systemic issues and do more things of substance.” And even in a challenging year, Taylor will keep after the changes he wants to see.

Kendael Armstead: An opportunity with no limits

Kendael Armstead owns a mobile cleaning business and has big plans for scaling up. Furthermore, the 21-year-old has plans to take others with him.

“When you’re working for someone you have a limit on how high you can go. You can only go so high before you reach your max,” he says. “I always had big plans. I was always determined, I had ambition whether it was my company or improving someone else’s company.”

After founding Ken’s Elite Detail in May of 2019, he’s just hired his first employee. His business has done well during the pandemic. Armstaed says he feels fortunate that the nature of his work has lent itself to what a lot of people want during the crisis: cleanliness.

But it wasn’t luck. He chose this particular type of business precisely because he knows that in spite of everyone’s best efforts, everything gets dirty again and again.

“I’ve seen an increase in business just because people just wanted things cleaned, everything from their carpets, to their furniture, to the interior of their vehicles,” Armstead says.

Rather than pivoting as many other businesses have had to in recent months, he ramped up what he was already doing by adding special COVID sanitation packages to his list of services.

Sometimes he feels that his peers seem to have unrealistic expectations about making money quickly and easily. He thinks he can step up and help them succeed – entrepreneurship is a route they can take.

“Some people don’t necessarily have the skillset or don’t necessarily have role models in their life to show them: ‘this is another opportunity,’” Armstead says.

He was fortunate to know small business owners growing up who could model success. His father and his teachers also groomed him to one day own his own business, which he understands isn’t the case for many people. But he also feels that it was just in him to want to work for himself.

“Everything I’m doing right now is efforts for the future, for my family, and then for the next generation coming, not just including my family, but the next generation of kids,” Armstead says.

Alesha Bowman: Modeling Black ownership on Troost Ave.

Growing up, Alesha Bowman says the message she heard again and again was “go get you a good job, a 9 to 5, and make good money.” So, she did. For 6 years, she worked as director of multi-cultural student services at DePauw University.

But, Bowman says, “It was never me being 100% my authentic self. I couldn’t be who I authentically wanted to be.”

The feeling made her increasingly miserable, but without models of an alternative, she didn’t quite know what her options were.

In March of 2018, Bowman started UnLESHed+, the only exclusively plus-sized women’s consignment shop in Kansas City. She built the business online for a year before moving to a brick and mortar store.

She explains that though no one in her family is an entrepreneur, she later realized that several small Black-owned businesses she went to as a child had actually influenced her thinking about entrepreneurship.

Now, she says, she wants to be influential to young people of color in the area.

Bowman grew up in Kansas City in an area similar to the one where UnLESHed+ is located at 39^th and Troost Ave. Troost has been a racial dividing line in Kansas City for more than 100 years, but most noticeably since the 1940s – poorer families of color live to the east of Troost, and wealthier, white families live to the west.

“It was important for me to strategically place my business in that same place,” Bowman says.

She says she wants young Black people to see successful Black-owned businesses so that they can aspire to entrepreneurship as well. She understands that modeling business ownership will create generational wealth in her community – she’s happy to be that model for her 5-year-old nephew.

Additionally, the location of her business addresses her concerns about the gentrification she sees underway along the Troost corridor. She would like to see more people of color in positions of power so that they can help decide what businesses change the landscape.

As a Black woman, Bowman says she often does not feel heard. If more people who looked like her were in these key planning positions, they’d be able to explain to others “why bringing all these big companies in may not revitalize the city, but really hurt the people that are already here.”

So far, however, Bowman is doing well. Although she’s had to dip into her savings to pay her bills for part of 2020, she believes her business philosophy has kept her afloat during the pandemic.

During the social unrest, she decided to step up and help raise money and supplies for protesters. She said, “It was about being there for what the community needed at that moment.”

By the summer, her social media followers had increased exponentially as had traffic into her store. She’d lifted her community, which turned around and lifted her.

Then, a producer of Ellen DeGeneres’s talk show contacted Bowman after seeing an article a student wrote about the shop. Bowman appeared on the show in October, which gave UnLESHed+, and Bowman herself, another lift – and made her an even higher-profile example of a well-run Black-owned business that young people can look up to.

La’Nesha Frazier: Black and female

La’Nesha Frazier and La’Nae Robinson are sisters who love to read books and drink wine. They were certain that others felt the same, so they opened Bliss Books & Wine in May of 2019 – turns out they were right.

Frazier lives in Missouri and Robinson lives in Virginia. So far, they’ve kept their day jobs as a physical therapist and IT specialist, respectively. They try to divide duties evenly, with Frazier acting more as the public face of the company, and Robinson acting as webmaster and social media manager.

Before the pandemic, Frazier says they’d been doing pop-ups at various locations around Kansas City to host author spotlights, wine tastings, and book sales, which Robinson would fly in to help facilitate. They started the business with their own savings and broke even after the second of those events.

However, Frazier says that because they are not a winery, they’re not allowed to sell or ship wine from their website. So, to keep the wine component in play, they’ve partnered with a few local wineries that look at Bliss’ book of the month and suggest wine pairings; and the wineries sell directly to Bliss clientele.

Fraizer says that setup is working fairly well. “We’re staying afloat because we don’t have a brick and mortar to pay for. We don’t have that overhead cost at the moment.”

Book club-type events are free of charge, but Bliss does charge for virtual events like a recent “paint and sip” that Frazier created and shipped kits for.

“We can reach any and everywhere,” Frazier says. They’ve shipped as far away as Hawaii and seen customers attend events from six states.

The sisters say they have had good family role models for the entrepreneurial endeavor. Aunts and cousins operate various types of businesses, and it’s something the family talks about. However, she feels that this can be a bit atypical.

“It’s not that prevalent in the Black community to say, ‘Hey, look, you could be a business owner,’ Frazier says. “But we can.”

She hopes that the hard work and creativity they’re modelling will show their children exactly that. In fact, she hopes that Bliss will do so well that they’ll be able to pass the business to their children one day.

But she knows that’s just her family. The rest of the Black community isn’t necessarily having that experience, and she’d like to see the playing field leveled in education, finances, and job opportunities, as well as entrepreneurial training.

As they continue their search for a physical location for Bliss, Frazier understands that they’ll have to also search for funding – the sisters’ savings won’t be enough to lease a building. She says the idea of walking into a bank is intimidating enough that they’re exploring every other possible option first, even crowdfunding.

She doesn’t look forward to pitching her business to a bank where she’s guessing she’ll have to deal with a team of white men.

According to Kauffman’s Capital Access Report, at least 83% of entrepreneurs don’t receive either venture capital or a bank loan and are not well-served by the capital markets. Barriers are especially significant for Black women founders. Of all VC funding raised by startups between 2009-2017, .0006% went to firms started by Black women.

“That is a bit intimidating being a female and then being a Black female, knowing that you don’t get the same opportunities others would get. I’m a woman, and I’m a Black woman, so I have two strikes against me already,” Frazier says.

However, she adds, if a traditional lender is their only option, she’ll brave it, because she’s also aware that she’s modeling for her children. She says, “Every step of the way, my kids see the struggle of entrepreneurship; they see the joys of entrepreneurship.”

Patricia McCreary: A box she’s required to check

Patricia McCreary calls herself a “server of people.” She was raised by her grandmother who was just the same way.

Five years ago, McCreary started a business based on the idea of serving others. It’s called Margaret’s Place – named for her grandmother – and is an adult recreation and wellness center for the retired and disabled community.

“We wanted to make sure we were a beacon of light in the community, and I think we have been successful with that. We open our doors free for nonprofits on nights and weekends,” McCreary says.

Ninety-eight percent of her clients pay for the service with Medicaid, the other 2% pay $10 an hour out of pocket for their time spent at Margaret’s Place, which is open from 7 a.m. to 6 p.m. Monday through Friday.

Before the pandemic, the business was growing, enough that she and her husband have been working on two larger projects, one is a Margaret’s Place that will be in a refurbished three-story school building, complete with living quarters, a physical therapy gym, and more. The other idea is a 20-acre village for the elderly and the disabled.

It’s only sometimes that she feels all is not working in her favor. Like when people call to request a visit for an elderly relative, and the person hangs up on her after she gives the address of Margaret’s Place. It’s located on the east side of Troost Ave., a traditional racial and wealth divide in Kansas City. Encounters like these provide what she calls “eye-opening ‘aha’ moments.”

These and other incidents, McCreary says, have forced her to admit to herself that racism is real. “I hate to admit that, because I was an advocate for ‘it’s not real.’ It’s how everyone wants the world to be, you know what I mean? But it’s not like that. It really isn’t,” she says.

But she does have ideas about and actions she takes to change that reality.

Loans she applied for early in the pandemic – a Small Business Association Economic Injury Disaster Loan, SBA and Paycheck Protection Program loan – have kept Margaret’s Place afloat even as they’re still at 50-75% capacity eight months in. McCreary says her capacity is 37 clients, but during the pandemic they’re seeing only about 10 a day.

She says only about $10,000 of her original loans remain, and she will certainly need more funding by the beginning of 2021.

She’s had experiences that were less positive with other types of loans. She thinks that might have to do with a box she’s required to check. “That checkbox that says, ‘Are you African American or Caucasian?’ If we could just do away with that checkbox, I think it would level the playing field,” McCreary says. Even with excellent credit, she’s had trouble securing a loan from a traditional lender and think it has to do with answering that question.

Fortunately, she says, the good has balanced out the injustices. She’s sought educational opportunities like ScaleUp! offered through KC Sourcelink where she says she learned to think like a CEO.

Pre-COVID, she worked to spread her knowledge and training to others in her community. She held weekly sessions and invited community business leaders from organizations like KC BizCare or Business Credit Works, or someone who could talk about finances or how to create a business plan.

“It was a hub for entrepreneurs and people who wanted to get away from their 9 to 5s and they wanted to start their own business,” McCreary says.

Additionally, she’s positioned Margaret’s Place as a community space for other nonprofit groups to gather, like Girl Scouts and Males to Men.

She understands that those organizations, like hers, work to give back to the community. She wants to be there for them. McCreary says, “It’s been really cool to be able to provide a space for people to connect.”

Sonié Joi Thompson-Ruffin: Power isn’t something that you own

Sonié Joi Thompson-Ruffin is a fabric artist and designer lecturer whose work is dedicated to the African-American narrative. Entrepreneurship – that is, producing a high-value product and finding those who want to acquire it – is integral to her work, but she thinks her approach may be different from that of other types of small business owners.

“We were raised to look at money not as end all to be all, but as something that we use to invest within our communities,” Thompson-Ruffin says. “We were raised to work within our communities. It wasn’t about the racial dismantling, or the racial disparities, or things like that. It was about, ‘Does Mrs. So-and-so down the street have dinner?’”

She says she comes from a family of activists, politicians, and entrepreneurs who all drove home the message that communities are what people make them, and that everyone with in those communities is in the same boat with nowhere to run. That is, each person possesses the power to positively influence their environment.

The form community activism takes in her work as an artist is through her exploration of race, human rights, and gender. Her work on these topics has been showcased locally at the Kansas City Museum, Nelson-Atkins Museum of Art, and the Kemper Art Center, but also at the Smithsonian American Art Museum, the White House Rotunda, and across Europe and Africa.

A major component of building great communities, she points out, is a commitment to generosity and willingness to communicate, which she does through her art and lectures – growing her business at the same time.

“In order for businesses to survive, and in order for the arts and education and equity, we’re going to have to sit down and have real conversations, and be very real with one another,” Thompson-Ruffin says.

And, as far as she’s concerned, the No. 1 conversation that needs to happen to affect change has to do with the state of education.

“Our educational institutions are substandard,” she says. “They are not doing the service that they need to do and commit to, as it pertains to education within our community at large. Particularly in the African-American community.”

But even outside of school, within families, education can happen, she says – education about what power is and where it comes from is a crucial bit of knowledge to discuss and pass down.

She used a recent engagement with the Carter Art Center to educate viewers about slavery. Her 4- by 12-foot quilt entitled 20 Odd depicts shackled African men brought to the United States on a ship called the White Lion in 1619. The men were from various places in Africa. However, the chains that bound them to each other and the power that forced them away from their families and into slavery erased those identities, setting the tone for 400 years of erasure. The Nelson-Atkins has since acquired the piece.

“Money, believe it or not, holds a power that if you don’t understand what that power is, then you’re going to make some missteps along the way,” she says. “Power is something that is to be shared. Power isn’t something that you own.”

Thompson-Ruffin says equitable sharing patterns are crucial, as is understanding what an individual’s power can really do for another human being – power doesn’t have to mean taking something away from another.