Black Entrepreneurs Pivot During Coronavirus Pandemic
While it is frustrating that many Black businesses haven’t had much luck with the Coronavirus Aid, Relief, and Economic Security (CARES) Act, it is no surprise.
To get through these tough economic times, hairstylists like Cynthia Smith, owner of Integrative Alopecia Solutions in Columbia, Md., have relied more on their clients and communities than on government aid.
“The CARES Act hasn’t addressed any of my financial needs,” Smith said. “My clients and the community have helped me the most by pre-booking appointments and giving me monetary gifts. The main challenge is not having any income coming in. My last week working, I lost 60 percent of my income. The reality hit so fast that you didn’t have time to prepare.”
Even so, Smith sees opportunity in her daily struggle to make ends meet. She believes the future success of her industry depends on Black hair salons’ willingness and ability to shift their focus to being wellness advocates in their communities: “I realized that we need to be talking about overall health and not just hair.”
So, besides their ability and willingness to shift focus, what else will be crucial for small Black business owners like Smith as they navigate the roads to reopening?
NAACP President Derrick Johnson believes the federal government is almost refusing to help them during the pandemic.
“Over the last 10 years, the fastest growing community to create new businesses was actually African Americans. However, the response in the stimulus packages that have been passed to date has created a vacuum for those same businesses because banks have been given the latitude to cherry pick their larger customers over smaller businesses, which African Americans make up a significant portion,” Johnson told BET.com in an April 28 interview.
Johnson was referring to provisions in the CARES Act that made the first round of funding ($349 billion) in the Small Business Administration’s Payroll Protection Program accessible only through banks and other existing SBA lenders. According to the Center for Responsible Lending, on this basis approximately 95 percent of African American-owned businesses had almost no chance of receiving a PPP loan through a mainstream bank or credit union.
The NAACP has been working with the Black Bankers Association and minority financial institutions, such as Carver Bank and OneUnited, to help address the financial needs of Black business owners. In the meantime, grassroots efforts combined with creativity have helped them remain afloat.
Books and Beauty
The Black book and beauty industries were particularly impacted by the closure of nonessential businesses nationwide and continue to be affected, even as states lift stay-at-home orders.
In March, W. Paul Coates, founder and director of Baltimore-based book publisher Black Classic Press and BCP Digital Printing, and Katura Hudson, marketing director for West Orange, N.J.-based book publisher Just Us Books, hosted “Black Books in the Age of Coronavirus: A Community Conversation.” More than 200 people, including publishers, authors, librarians, readers, community organizers, booksellers, and book distributors, participated in a video call.
“People are trying to cope and survive,” said Coates. “Some are applying for grants and loans. Others are finding great success with their online sales. Still others are looking past this point where we are now and focusing on building their internal structures.” (This discussion continues online via the Facebook group, The Black Book Community.)
Smith, too, turned online to connect with others in her industry and to generate income.
“I started the Texture Talk Facebook group so that stylists could communicate with each other and their clients,” Smith said. She also stepped up her online presence with the launch of integrativealopeciasolutions.com, where she sells custom, consultation-led hair care products.
Fellow stylist Sylvia Wilkins-Hawkins, owner of Fetish4Hair Salon in Towson, Md., also leveraged online resources. In the initial days of the pandemic, Wilkins-Hawkins packaged and sold hair survival kits that included shampoo, conditioner, oil, satin pillowcases and combs.
“I didn’t expect it to go as well as it did,” she said. “Everybody loved it, and I sold 35 kits in six weeks.”
They Wear the Mask
Not unlike business owners in the beauty and publishing sectors, those in the fashion industry have also found ways to shift their focus and continue operating in some form despite closure orders.
For St. Louis-based Afro World Hair and Fashion Company (www.afroworld.com), a hair and fashion retailer providing African-print cloth masks to the community, this is a family affair. Sheila Little-Forrest, the company’s president and CEO, manages the day-to-day operations of the business her father established 50 years ago.
“The decision to sell masks came out of the need to make sure our parents, who now reside in California, and other members of the community, would be safe,” Little-Forrest said. Her brother Victor Little oversees the design of the masks, and brother Russ Little Jr. created the website (africanmaskstore.com) for online sales.
Concerns about staff on the front line influenced Little-Forrest’s decision to first sell masks and now other products, including incense and clothing, via drive through.
“I am worried about keeping everyone safe. None of my employees are working right now because they are not comfortable. No one is comfortable in retail right now,” she said.
Little-Forrest also expressed concern about the growing political stance about wearing (or not wearing) masks. “I don’t want to put my staff in compromising positions,” she explained. “We can sell successfully through drive-thru, so let me sit at my drive-thru and assist the customers we have.”
Buy the Book
Coates sees opportunities for Black booksellers and publishers who adjust their approach to sales as well.
“Creativity shows up large in crisis,” he said. “There’s tremendous opportunity for virtual engagement, and opportunities for collaboration are amplified as well.”
In May, The Dock Bookshop in Fort Worth, Texas, and Sankofa Video, Books, & Café in Washington, D.C., hosted a virtual afternoon with poet Jessica Care More. In April, Black Classic Press hosted a virtual discussion with the editors and contributors of The Osiris Papers: Reflections on the Life and Writings of Dr. Frances Cress Welsing (Black Classic Press, 2020) in which more than 400 people participated.
“I wouldn’t have normally done this event,” Coates said. “Virtual events are a wonderful opportunity to keep Black Classic Press out there [in the marketplace].”
In addition to virtual events, Black booksellers are taking orders online and by phone as well as offering curbside pick-up. Loyal customers have also come to their aid by organizing fundraising efforts, such as the online campaign that to date, has raised $117,150 (toward a $200,000 goal) for Oakland, Calif.-based Marcus Books, the nation’s oldest independent Black-owned bookstore.
Blanche Richardson co-owns the store with her siblings. “The pandemic exacerbated the plight of the few remaining black bookstores across the country,” Richardson told USA TODAY.
Longtime customer Folasade Adesanya established the Marcus Books 60th Anniversary Fundraiser via gofundme.com to support the store during its temporary closure due to COVID. Now that the store’s most immediate financial needs have been met, funds raised will go toward eventual ownership of the bookstore property, building a robust online presence that includes virtual events, and expanding infrastructure, inventory, and staff.
As Coates observed: “No one is talking about giving up. I haven’t had a conversation with anyone who’s talked about quitting. There’s a hopeful sense of survival. The innovative ones that can hit the ground running will make it.”
Finding Financial Footing
As they adapt to new ways of doing business, what does the financial future look like for small Black-owned businesses?
The Payroll Protection Program component of the CARES Act helped Coates’ business. “We certainly benefited from it,” he said. “We applied early on and worked with our bank.”
He acknowledged that business owners “who didn’t have existing banking relationships were excluded,” and said this was a lesson for Black-owned businesses: “You have to have a relationship with a banker, a lawyer, and an accountant.” Coates also noted the suspension of payments on some 7(a) loans will be “key to the survival of some Black businesses.”
According to SBA.gov, as part of its coronavirus debt relief efforts, the SBA will pay six months of principal, interest, and any associated fees that borrowers owe for all current 7(a), 504, and microloans in regular servicing status as well as new 7(a), 504, and Microloans disbursed prior to Sept. 27, 2020. Borrowers do not need to apply for this assistance.
Still, Wilkins-Hawkins and Little-Forrest represent the countless Black business owners who pursued government aid and received nothing.
Little-Forrest’s brother Russ applied, but they haven’t received any funds. “I don’t know what the government’s intentions truly are,” she said. “I can’t imagine how they can help all the businesses, and I didn’t want to be dependent on federal aid.”
Like Smith, Wilkins-Hawkins has a loyal client base that has supported her.
“My clients are paying ahead for appointments by purchasing prepaid gifts cards and certificates,” Wilkins-Hawkins said. “They will be the first to book when I reopen.”
The future is the question for everyone.
“In the beauty industry, where we’re close to people and not six feet apart, what does the new business model look like? How do you manage doing one head at a time rather than five? Do we raise prices?” Smith asked.
Faced with a new normal, Smith, a hair-loss specialist and holder of a health-coaching certificate, envisions a different focus for Black beauty professionals.
“Our business focus should be wellness,” she said. “We need to be wellness advocates. That’s the new business that I am going to create from this. Our communities look to us for leadership.”
With that in mind, Smith is focused on being in a better position than she was before the pandemic.
“My biggest hope is to come out of this ahead of the game,” she said. “If you don’t take the time to reassess, you won’t make it out of this crisis. I feel more compelled than ever to address ethnic health disparities. I was working towards it but didn’t have the time to feed and water the idea. Now I have time.”