The Buck Stops Here!


At approximately 82 percent, the City of Detroit is home to one of the largest populations of African Americans in the United States. While African Americans account for the majority of the City’s population, they have become a dwindling minority in business ownership. This disparity brings to mind this often quoted anecdotal account of dollar circulation in different communities, “The lifespan of a dollar in the Asian community is 28 days, in the Jewish community the lifespan of a dollar is 19 days, and shockingly, the lifespan in the African-American community is approximately 6 hours”. While the validity of these figures remains to be proven this scenario seems to be closer to the truth in Detroit; which begs the question, where does the African American community spend their money? Black Young Professionals of Detroit will explore this topic and more at our “Experienced Entrepreneur Panel” event on September 8, 2017.

 

For the past decade there have been major developments in the city, such as, the Little Cesar’s Arena, the Q-line, and various commercial and residential developments. While these attractions are sure to bring visitors and new comers to town, the city still lacks basic amenities, like grocery stores. Of the grocers that remain in the city, none are black owned and often times sell low quality products, leading Detroiters to travel to the outskirts of the city into the suburbs to grocery shop, some by car and many by bus. Imagine the inconvenience of grocery shopping miles outside of your city’s limits and having to haul your groceries on to a bus, also, imagine taking that same bus a little bit further to get to work. This is another reality some Detroiters face. According to Detroit Future City: 2012 Detroit Strategic Framework Plan, “…61 percent of employed Detroiters work outside the city, whereas only 39 percent of employed Detroiters work within the city.” Far too many young professionals have to travel beyond their reach to access employment and basic needs. Some of these issues may be the reality of logistics living in the Motorcity or simply a lack of purposeful development.

 

African American’s purchasing power is at a high of $1.2 trillion. Imagine the change $1.2 trillion would make in our communities. With $1.2 trillion that Ma and Pa shop down the street wouldn’t have to just be Ma and Pa, they could hire their whole family and the neighborhood. They could pay their employees decent wages with benefits; their employees could comfortably take care of their families, buy homes in the area and pay taxes. The increased tax base would support community upkeep such as: fixing the roads, cutting city grass, eliminating blight, public safety and education. Ma and Pa can open up more stores, building wealth and equity into the community. When the day comes for Ma and Pa to retire, they can rest easy because they will not have to depend on social security. The employees were given opportunities to learn and have grown into leadership roles within the business, so they successfully continue the cycle.

 

This is what black business could look like. While many are successful, a significant amount of black businesses fail to launch for many reasons, including, access to capital and clientele. Although loan redlining has been deemed illegal since the 60’s, its effects still linger to an extent in black and other minority communities; leading black business owners to depend on their own personal finances to begin their business ventures. Even if a minority is approved for a loan they most often owe higher rates of interest than their white counterparts. Once these new entrepreneurs overcome this obstacle and open their doors, they are still met with yet another challenge— finding customers. One could say that the clientele issue is something any new business would face; why is this unique to the black business owner experience? These owners are under tougher scrutiny because of misconceptions and generalizations of how black businesses operate. In order to attract clientele, black businesses, depending on their industry, must overcome marketing challenges that are unlike other entrepreneurs. Some of these challenges are: being “too” black to reach a broader audience, being labeled as a “selling out” or not being black enough; and finally, fighting the perception of having an inferior product or service.

 

What if we all— black and white— patronized black businesses at the rate that we patronize other businesses? How would our communities look? Think of it this way, Americans buy lower priced goods everyday overseas because of convenience, if those purchases were made in America the benefit would be job creation and increased quality of life for American citizens. Why should buying black be any more radical than buying American? Our communities are a microcosm of the state of our country. If all communities aren’t adequately supported— we all fail. There needs to be more effort from us as the consumer to be conscience of where we are spending our dollars. While shopping at big box stores is convenient, try challenging yourself to seek out opportunities to spend that $1.2 trillion power at establishments where you can make an impact on a community, rather than just deepening a corporation’s pockets.

For more information on the event, please click here.

For further reading, please take a look at these insightful articles:

https://www.washingtonpost.com/business/on-small-business/black-hispanic-entrepreneurs-discriminated-against-when-seeking-small-business-loans/2014/06/03/70059184-ea86-11e3-9f5c-9075d5508f0a_story.html?utm_term=.dc9cebd2e7a1

http://www.blackenterprise.com/small-business/blackbizmatters-spending-1-2-trillion-black-buying-power-with-black-businesses/

https://michronicleonline.com/2016/12/19/so-many-black-businesses-so-little-clout-in-a-majority-black-city-detroit-black-business-still-lags/