Starting a business can come with a lot of challenges, and even more so when you’re a person of color.
The U.S. Census Bureau’s most recent assessment of businesses in 2018 found that Black Americans owned 124,004 employer businesses, accounting for 2.2% of 5.7 million businesses in the country, even though they make up 13.4% of the U.S. population.
Research conducted at Yale University in 2003 found that an “unexplained” disadvantage Black-owned businesses experience compared to their white counterparts is the limited opportunities in obtaining access to capital due to lending discrimination and consumer discrimination against Black-owned firms.
Tynesia Boyea-Robinson, owner of Dallas investment and advisory firm CapEQ, believes redlining is one of the biggest reasons that Black business owners are unable to qualify for the loans they need. Redlining is a discriminatory practice in which banks and other lending institutions refuse or limit loans to people from specific areas.
“Black businesses tend to be over-indexed and low-growth businesses as a result, because high-growth industries require more significant capital and they’re less likely to get access to that capital,” Boyea-Robinson says. Over-index means to give an attribute — in this case, race — too much prominence in a discussion or analysis.
Boyea-Robinson adds that it’s difficult for minority and Black owners to get the significant upfront investments that are required for high-growth industries because they require more patience and trust in the business models. “So a lot of Black business owners tend to go into low-growth industries, like restaurants, cafes and barbershops, as a result,” she says.
Mia Moss, founder of Black Coffee, opened her café in 2019 on the east side of Fort Worth, where she grew up.
“I really just wanted a coffee shop for the community,” Moss says. “It was a little difficult because I wanted to work with other coffee shop owners. And I think initially they didn’t take it seriously because that is not an area you would think someone would put a coffee shop in.”
After hearing about other Black business owners and their issues attaining startup funding, Moss decided to raise money by reaching out to her community. She worked on the business plan for Black Coffee in 2017 and started talking to friends and family about investing shortly after. Moss says coffee shop startup costs can run anywhere from $50,000 to $300,000, depending on location. For Moss, it wasn’t difficult to raise the funds, because she was pulling from investors she knew and who believed in her, instead of from investors who didn’t know her vision.
“What we found is other business owners have had a hard time being able to rely on their bank that they’ve been using for years,” Moss says. “It’s probably best to try to pull from the people around you, with Kickstarters [a crowdfunding platform] and different donors and things like that, instead of just going the normal route.”
Tara McDaniel, an owner of Soirée Coffee Bar on Singleton Boulevard along with Clive and LaFree Ryan, decided to self-fund the jazz-themed café instead of going through a bank. After figuring out the financing, they had to find a location.
“When we were scouting, we definitely had our eye on Trinity Groves, simply because it’s a gentrified area and it’s a predominantly Black area,” McDaniel says. “So we felt like this was a way to kind of buy into the block and bring that presence back from a standpoint of ownership.”
McDaniel drew inspiration from the birth of jazz in the 1900s as she sought to blend coffee and jazz music into one café. Historically, the culture of jazz has brought people together during tumultuous times, and this is what McDaniel aims to do with Soirée.
“That’s exactly what coffee does; People come together to talk,” McDaniel says. “We felt like in the midst of social injustice and all the things that were going on in our climate, we wanted to also be a beacon of light.”
The Black Lives Matter movement and other social justice initiatives have opened a dialogue on what it means to be Black in America, and has shone a light on Black- and minority-owned businesses.
“I’ve seen Black-owned businesses ... just come out of nowhere,” McDaniel says. “I think what this climate has done is give Black people a little more fire to do the things that we wanted and kind of come into the realization that we might have been building tables that we never got a seat to. And it’s time to build tables and seat ourselves.”
