Charity Dean knows all too well the disparities that exist for business owners of color. As the former director of Detroit’s civil rights department, she saw how others rallied together, and she wanted Black-owned businesses to do the same.
“It really became apparent during COVID, the numbers and the ways the pandemic hit Black people more than other folks,” she said. “Not just the health implications. The businesses were suffering and really needing some entity to lead it and to advocate.”
Dean, who also owns a law firm, gathered with Black business owners, and together, they started an organization focused on helping such entrepreneurs in Metro Detroit obtain financing and access professional services, such as accounting and legal representation.
This month marks one year since the Metro-Detroit Black Business Alliance launched with $1 million in support from TCF Bank, now merged with Huntington National Bank. In that time, the MDBBA launched programs that provide technical assistance, networking opportunities and business advice, and grew its membership to more than 350. It also helped business owners secure nearly $2 million to start up and expand. And leadership says there’s more to come with programs focused on youth and suburban businesses.
LaTrice McClendon, community president of Detroit for Huntington National Bank, said the alliance is filling a critical need during a challenging time for Black entrepreneurs, who traditionally have struggled to obtain sufficient financing to start businesses and keep them going during economic downturns.
“As the first corporate donor to contribute to the alliance, we knew there was a gap in capital access to Black-owned businesses,” she said. “We wanted to back organizations that build them up — especially those in Detroit. With the initial support of Gary Torgow, our chairman of the board of directors, and now other Huntington National Bank executives, our pledge of $200,000 a year for five years will allow the alliance to continue its efforts”
Domonique Bowen, owner of Chita’s Nefertiti Bar & Grill in northwest Detroit, said the organization helped her navigate COVID restrictions and renew her business license. She learned about the organization while chatting with a customer, Kai Bowman, the MDBBA’s chief operating officer.
She said the organization helped her obtain capital, including a Restaurant Revitalization Fund grant, and resolve a paperwork issue she needed to address to renew her business license. Help with those challenges allowed her to focus on her core challenge: staying afloat as COVID-19 dragged on.
During the pandemic, Bowen said she had to deal with capacity restrictions, taking a hit to her liquor business. Since then, she’s focused on increasing her food service, something that “actually grew my food business because I’m on DoorDash,” she said. “We get a lot of walk-ins now and call-in and online orders.”
She said the MDBBA also been helpful for networking and teaching her how to be more efficient in operating her business, which she inherited from her grandmother in 2013. She recently purchased the building she rented and plans to expand.
“They gave me a lot of exposure,” Bowen said. “I’ve met a lot of people who came to visit my bar and grill and patronize and helping me grow. That’s the biggest thing. They’re always looking for ways to help.”
Addressing the earnings gap
According to W.K. Kellogg Foundation’s 2018 Business Case for Racial Equity, the average earnings of people of color in the United States is 63% of the average earnings of White people of the same gender and age. It also found that if the average earnings of people of color increased to match, it would generate an additional $1 trillion.
The study also noted that Blacks and Hispanics/Latinos start businesses at rates similar to whites, but those businesses differ in size, survival rates and profitability.
Dean, who is president and CEO of the alliance, said she felt responsible for taking on some of the action steps outlined in the report: business development in underserved areas and access to capital for minority entrepreneurs in an effort to close the racial wealth gap.
“What we know is access is one of the major issues for businesses,” she said. “This is what our businesses have told us when they apply, what they want help with. … It’s because Black people in our country have been intentionally discriminated against and not allowed to access wealth and accumulate wealth and to also have banking relationships.”
Upon its launch, the group hosted a series of events to increase membership. In June, members started the Hasting Street Index, a listing of Black-owned businesses in Wayne, Oakland and Macomb counties.
In August, the alliance opened its Black Business Resource Center at 1234 Washington Blvd. in downtown Detroit. Members can access the center at any time for free internet, printing and co-working space.
The resource center also hosts workshops and seminars, such as a recent “Taxes and Tacos” event with a certified public accountant who provided tax help to business owners.
For businesses that need one-on-one help, there’s the Biz Wiz program. The program provides technical assistance to members who call or visit seeking help on topics such as obtaining a business license or a mortgage. Dean compares it to Best Buy’s Geek Squad, providing help based on an individual’s needs.
Perhaps one of the alliance’s biggest financial impacts is its Capital Connect program, which has helped a small group of businesses secure a total of $1.85 million.
Participants include minority business owners seeking technical assistance providers, such as lawyers and credit repair specialists. Also in the mix are funding partners, such as banks and Community Development Financial Institutions, including Independent Bank and Invest Detroit.
“Those are banks and CDFI that have money that they want to get to minority-owned business,” Dean said. “We have the businesses, so we say our job is to connect the two.”
Business owners in the program, ranging from operators of startups to established enterprises, go through a 13-week program. The first cohort of 10 participants wrapped up in February. Interviews are underway for the second cohort.
Crystal Newble, owner of Detroit-based Leadhead Construction, was among the first group of business owners in the program. She and her crew of six perform demolition and remodeling work for the city of Detroit. Her company has also done work in Westland.
Newble said she learned how to fine-tune the documents to present to banks for funding, including her business plan, accounts receivable and accounts payable: “Not just organizing those documents, but learning how to tell a story with those documents,” she said.
Now Newble said she’s finalizing a deal for a $500,000 line of credit.
“It gives us the ability to have capital,” she said. “It positions us better to purchase equipment and also to be able to bring on additional crews to get the additional work to get the additional cash.”
An ‘essential role’
Earlier this year, Bank of America partnered with the MDBBA to host a series of events, including a membership drive.
Matt Elliott, president of Bank of America Michigan, said working with the MDBBA to boost its ranks is one example of how the bank shows its commitment to advancing racial equality and economic opportunity.
“We recognize the essential role Black businesses play in benefiting our Detroit community,” he said.
As for the MDBBA’s second year, Dean said the group plans to start a summer internship program focused on entrepreneurship. Young people ages 16-24 will be matched with a Black business owner.
“We want to expand a young person’s mind to be able to see what it is like to run a Black-owned business,” she said. “We’re in partnership with the owner. You’re not just going to work at Cutter’s (Bar & Grill.) You’re going to be with Chuck the owner to see how he’s doing the day-to-day work.”
There are also plans to expand outside of the city of Detroit. Dean notes Black suburban families also experience a racial wealth gap.
“So many of our resources have been focused on Detroit and for good reason, looking at the poverty levels and all of that,” she said. “There are other cities in the metro area that really need the resources. … One of things you’ll see us being a lot more intentional about, especially second, third and fourth quarter, is really getting into Pontiac and Inkster and Ecorse, and also trying to get our colleagues who are also doing this work to really think beyond Detroit.”
cwilliams@detroitnews.com
Twitter: @CWilliams_DN
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