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Some Black-Owned Businesses Thrive Despite Pandemic, While Others Continue To Struggle

Steve Marroni pennlive.com

WWR Article Summary (tl;dr) Steve Marroni speaks with several Black business owners in Pennsylvania over the struggles they have faced and continue to face during the pandemic. 

Harrisburg

Amma Johnson has always been an artist. Being an entrepreneur was something she picked up along the way.

“It’s my little girl’s dream to be a fashion designer,” she said from her Amma Jo brand Strawberry Square showroom recently. “I started in 2014 with just one handbag and $100.”

Things were going well and her business was growing as she sold her designer handbags, decorated with her original, digital artwork, in 17 states.

Then, 2020 happened.

“That was obviously very, very tough for us,” she said. “We had to close our retail showroom.”

The lockdown of the coronavirus meant few stores were open and most shoppers stayed home.

But Johnson, like so many other business owners, learned how to “pivot.” That became more than a keyword for business owners. It meant survival.

The coronavirus pandemic was a challenge for all small businesses, but particularly minority-owned businesses, which in general were hardest hit and already at a disadvantage for a variety of reasons, such as lack of access to capital, lack of established mentorship relationships, and fewer overall business opportunities.

“It’s really about relationships,” said David Dix, owner of Luminous Strategies and co-founder of the new PA Chamber for Black Owned Business. “If you don’t know your banker, he’s less likely to call you back.”

A year ago, PennLive spoke to Johnson, Dix and a number of other Black business owners about their struggles and triumphs during the pandemic.

With vaccinations in people’s arms and the country making a return to normalcy, things appear to be getting better, but the pandemic did lead to changes. And many of the same inequities remain.

New and old challenges The coronavirus pandemic disproportionally hurt Black-owned businesses and brought to light inequities that have existed for a long time.

In 2020, Black business ownership rates dropped 41 percent between February and April 2020, the largest rate of any racial group, according to the US House Committee on Small Businesses. An April 2020 study by the University of California, Santa Cruz, produced similar findings that more than 40 percent of Black business owners said they weren’t working, compared with 17 percent of white-owned businesses.

The coronavirus had proven to be more than twice as deadly for people of color under the age of 65, according to the U.S. Centers for Disease Control and Prevention. About 30 percent of people of color who contracted COVID-19 died, compared to 13 percent of white Americans, the CDC found.

A disproportionate number of Black-owned businesses are located in industries and geographic areas hardest hit by the pandemic.

And Black-owned businesses found it difficult to get help from federal Paycheck Protection Program, designed to throw a lifeline to small businesses, the Center for Responsible Lending found. The program required business owners to apply for aid through banks or credit unions, but during the five years preceding the pandemic, only 31 percent of Black-owned businesses obtained loans from banks or credit unions. Without existing banking relationships, many struck out when they sought help.

“When we look at the end of the year of 2020, a lot of businesses didn’t survive,” Dix said. “A lot of businesses didn’t have access to PPP. A lot of businesses didn’t gain those very critical small-business grants that they needed.”

That’s when he realized that Black-owned businesses needed to do something different. The pandemic showed that many of those who worked together thrived.

So Dix and his wife and fellow entrepreneur, Marcia Perry Dix, decided to form the new PA Chamber for Black Owned Business, or PACBOB.

“We were talking about the Black-business infrastructure and the pandemic of COVID and, as the year is rounding out, it’s clear that we didn’t do that well,” Dix said. “There are many businesses that were lost, and it was going to take a real group and collaborative effort to build an infrastructure necessary to support these businesses in the future in the event of a pandemic or in the event of there being opportunities available.”

While there are regional organizations, such as the African-American Chamber of Commerce for Central PA, Dix saw the need for a statewide group to bring everyone together, advocate at the state level and to fill in the gaps where opportunities and programs may be missing.

One of the biggest issues facing Black entrepreneurs is lack of access to capital, he said. That’s why the new chamber is bringing in partners who have experience working with Black-owned businesses and directing them to resources and where they can get funds. They also have partners in the PA Chamber of Business and Industry, further expanding their reach with access to 12,000 other businesses.

But the chamber is still forming, and through the summer, Dix and the initial members of the chamber will be figuring out exactly what role they need to play, what gaps need to be filled in and how they can best level the playing field.

One thing is for sure, though. Collaboration is key, Dix said. So is the entrepreneurial spirit.

And key to survival seems to be the ability to pivot. “It’s vitally important,” Dix said.

Just look at Stefan Hawkins.

The pivot Hawkins is the owner of House of Vegans, central Pennsylvania’s first Black-owned vegan restaurant.

The brand-new Harrisburg restaurant was gaining popularity and growing a base of happy diners, but when the pandemic struck, he lost 60 to 75 percent of his business because no one was dining out. Hawkins was forced to close temporarily.

But he pivoted and applied his skills, ingenuity and talents in another direction.

In the middle of the pandemic, Hawkins launched not just one, but two new businesses.

He opened Good Brotha’s Book Café in January, and he also launched Fifth Acres Coffee, the first Black-owned coffee brand in Pennsylvania, which he said will be on the shelves of Giant and Karn’s grocery stores soon.

“I did all this during the pandemic,” he said. “It was networking, talking, meeting good people who want to help you when they believe in you, your brand and what you can do.”

He did it on his own, but he said an organization like PACBOB would be a big help to find grants and funding, had it existed when he was struggling. He said he’s glad it’s here now.

“Something like PACBOB is crucial for businesses like me because I wasn’t able to find any type of funding to keep my establishment open,” he said.

Hawkins noted he was not eligible for some of the loans that were available during the pandemic because House of Vegans opened after the cutoff date for those programs, and so was unable to show the required tax documents from the previous year.

The resource that seemed to be missing most during his ups and downs during the pandemic was extra funding. But he pushed on.

“It was just straight networking and people believing in the brand and believing in what I’m trying to build,” he said.

Business is picking up now, and with more and more people dining out, he hopes to reopen his vegan restaurant soon.

With two new businesses, it’s still too soon to say if Hawkins has been successful, but he said he is optimistic.

“I wouldn’t call it a success story just yet because I had to close a business,” he said. “I opened up in a pandemic and I closed in a pandemic. I would say I took the opportunity and I took the risks all at the same time. But I can say I’m a success in the sense that I wasn’t scared and I didn’t allow the pandemic to stop me or hinder me from going full entrepreneur.”

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