Why doesn't Rochester have more Black-owned business startups?
Pandemic aid fueled startups in other parts of the country. A Rochester-based business consultant explained why we don't see more of them here.
A recent report by the Poynter Institute found a surge of Black-owned business startups in 2020 and the first few months of 2021.
The report examined statistics in states including Florida, Georgia, Kentucky, New York, Tennessee, Texas, Vermont and Washington.
But during that time, there was not a corresponding rise in Black-owned business startups here, in Rochester and the surrounding southeastern Minnesota region. The outlook here suggests that only one new business, Loving Touch Productions , got its start during the pandemic.
Why did our area not see the same surge of Black-owned business growth that other parts of the country did? What can be done to encourage more of it? And is what needs to be done, possible to do?
To get the answers, we turned to Tawonda Burks, who consults with aspiring entrepreneurs in Minnesota and the Upper Midwest through her business, Elocina . She's based in Rochester.
Contrary to official statistics, Burks said, there is actually "a lot of movement" in the Black community here to become self-employed. The pandemic prompted more phone calls to her for advice – calls from people who'd had "the itch" to start their own business.
And many did start a business – only, those home-based hair salons, accounting offices and other businesses operated unlicensed, known only to select communities via word of mouth. Getting over the hump to become a fully licensed, publicly advertised business seems to be a challenge, Burks said, because of a host of factors, including access to capital, lack of how-to knowledge, and the social culture of our area.
"Because of those barriers, we don't see the numbers in the community," Burks said.
Poor credit is a common condition among Black would-be business owners, she said. It's why Elocina is starting a new service next month to assist clients with "credit repair." Burks took courses and received a state license to offer the credit service.
"It's a huge need," she said. Some of her clients have "a great concept that can be successful, but they lack the finances that they need" to start the business.
What many also lack is the knowledge it takes to run a business, or even where to begin to get it. "They don't know what they don't know," Burks said.
She, along with Lee Green, who owns Greenhouse Grafix , and Andre Crockett, of Barbershop & Social Services , are forming a nonprofit organization, Black Entrepreneurship Team, or BET, to help counsel young startups.
"The goal of it is to provide the resources, the education, to provide the network to support each other," Burks said. The trio is obtaining nonprofit status for BET and plans a June 26 grand opening.
Just as financial resources and knowledge have been barriers, so, too, has been a pervading sense that "Rochester is not the place to be to have a business if you're Black," Burks said. Some "feel their business may not be welcomed." There aren't enough Black business owners to serve as role models and mentors, she said.
But there are glimmers of hope. One Burks saw recently at Apache Mall, where Black-owned pop-up shops had success.
"It shows people that there is a potential to do something like this (own and operate a business)," she said. It gives people a taste of the risk and adventure of self-employment, "to know if this is something that I want to do."
"Opportunities like that are needed more," she said.