Charlotte's Black-owned businesses that weathered the pandemic learned to build relationships
Here's something you've heard us say a lot during the pandemic: it's been tough for businesses, having to navigate shutdowns, capacity limits and supply disruptions. Something that hasn't received as much attention is how much harder the pandemic has been on Black-owned businesses. During the height of the shutdowns last spring, Black business ownership dropped 41% in the U.S., the largest of any racial group. That's according to a report by the U.S. House Committee on Small Business.
Shanté Williams, who is board chair of the Charlotte Mecklenburg Black Chamber of Commerce, has seen the impact closer to home and joins WFAE's "Morning Edition" host Marshall Terry as part of our series Rebuilding Charlotte.
Marshall Terry: Thanks for being here.
Shanté Williams: Thank you for having me.
Terry: And for full disclosure, you are a member of WFAE's Community Advisory Board.
Williams: Yes, I am.
Terry: Thank you for that. My first question is why are Black business owners feeling a bigger impact brought on by the pandemic?
Williams: What we see with Black business owners, especially in context of the pandemic, is generally Black business owners come into business with less capital to pour into their business. So they're undercapitalized when they first start out, and they have to continue to bootstrap much longer than it's valuable to do so.
So when your undercapitalized continually, you don't have the reserves on hand to withstand very much volatility when it comes to an economic downturn.
Terry: When the government was handing out the first round of Paycheck Protection Program, or PPP loans, only a small fraction of Black-owned businesses received them. How did they do with the second round of PPP loans?
Williams: The second round, I will say, I didn't see a ton of interest from Black business owners. Some had better connections to banks or alternative lenders like a PayPal lending or some of the online vendors. However, I didn't see the same amount of clamor to get those loans. I think a lot of business owners ended up discouraged, and so they decided to turn away from the PPP process altogether.
I did hear some people being able to get through, but for the most part, it wasn't necessarily a process problem in the second round. It was a bit more of a "once bitten, twice shy" sort of a scenario for a lot of business owners.
"I think a lot of business owners ended up discouraged, and so they decided to turn away from the PPP process altogether."
Terry: What are you hearing from your members at the chamber right now? How are Black-owned businesses doing now in Charlotte and are some doing better than others?
Williams: Definitely some are doing much, much better than others. The pandemic has allowed some business owners to completely overhaul their models. We saw a lot of businesses take advantage of some of the local funds and build out their e-commerce platforms or build out their delivery systems. And so they kind of changed the way they operate and how they bring revenues into better withstand another shutdown if we were to have one.
So some are doing very well. Overall, if you were able to survive that initial shutdown and able to reopen, most of those businesses are still in business. Some of them are in a still tenuous situation where they may have taken on debt or other types of capital that are pulling on their revenues to this day, still.
Terry: Can you give us some examples of some of the businesses that are doing better than others?
Williams: My favorite example is a local salon and spa here. The owner came in, she was kind of uncertain as to where to go. She came through our technical assistance program and she went from a space in NoDa that supported her and another massage therapist, to now, she's moved into a much larger space where she's got several employees and offering lots of services. But she was able to do that with good financial planning and turning the way in which customers came into her into something that was much more scalable. So she used our technical assistance grant to build out her website and her e-commerce platform so people could find her easier.
Other examples are business owners who were maybe in the restaurant business, and after they figured out how to turn their food business into something that could be easily applied to a delivery model, they started working with maybe local organizations and getting the word out. And so they started (being) able to turn revenue in that way because previously delivery was just too costly of a mechanism for them to deploy in their business.
Terry: What do you see as the biggest challenge for Black businesses in Charlotte moving forward as we hopefully start to emerge from the pandemic?
Williams: I believe the biggest challenge is always going to be capital and being properly capitalized as they move forward. Business owners really aren't able to gain those funding relationships that will help them advance. Frankly, in Charlotte, we need greater pools of risk capital to support our entrepreneurs and our small businesses. And until we really create a system that doesn't weigh so heavily on maybe the past that maybe looks at the current business dynamics. Businesses are really still going to have that undercapitalization challenge that prevents them from growing and scaling.
Terry: What advice are you giving your members as we move forward in the pandemic?
"Relationships, relationships, relationships. Build relationships with banks, build relationships with the grant-making organizations, build relationships with other business owners in order to pool your resources, maybe to do some joint venturing to help grow in scale."
Williams: Relationships, relationships, relationships. Build relationships with banks, build relationships with the grant-making organizations, build relationships with other business owners in order to pool your resources, maybe to do some joint venturing to help grow in scale. We're really preaching to our business owners that we have to continue to use the power of networking and working together in order to really build businesses that can really go to the next level and cross the 10 or 15 or $100 million points and really become economic engines for our community.
So we're preaching relationships and building them wherever they can.
Terry: Has the pandemic delivered any kind of silver lining over the past year and a half for Black business owners in Charlotte?
Williams: I think people are really seeing that there is an imperative to support your local businesses, your local community, your local Black businesses. And it's allowed everybody to recognize that, hey, I may have thought that I was doing really great. And you know, the pandemic has kind of laid some of the underlying issues that all of our businesses are suffering from kind of laid them bare, and allowed us to form a stronger network of Black businesses that are willing to work together and to collaborate in order to solve some of those challenges. So I would say that's the silver lining. We not only put a spotlight on the issues, but people have really come together to start solving them.
Terry: Thank you for taking the time.
Williams: Thank you.
This conversation was produced as part of our series Rebuilding Charlotte, WFAE's look at how life has changed and the challenges ahead because of the pandemic. Support for rebuilding Charlotte is provided by Lowe's home improvement.