Want to grow more Black businesses in Philadelphia? Start with advocacy, funding and social capital

In her first two years of business, Lokal Artisan Foods owner Charisse McGill has found success with her French toast bites that includes a recent stint vending at Spruce Street Harbor Park.

McGill says she gained an advantage as a Black woman founder through academic institutions: Before embarking on her career in entrepreneurship full time, the Temple University alumna quit her job and enrolled in a graduate program at St. Joseph’s University.

“I had resources and access,” she told Technical.ly. “[It helps] to have two university institutions working on your behalf and organizations designed to see you succeed.”

Attending Temple as an undergraduate student and St. Joseph’s as a grad student provided McGill with access to social capital, resourceful alumni networks and insightful professors. But not every Black entrepreneur finds such success.

Philadelphia’s economy has been severely impacted by the pandemic and its Black businesses have needed even more support. Still, entrepreneurship has long been seen as a wealth generator, and there’s work being done locally to ensure more can access that opportunity.

Center City District (CCD) and Central Philadelphia Development Corporation recently analyzed the number of Black, Hispanic, Asian and white-owned firms in Philadelphia and compared it to four other cities — Boston, New York, D.C. and Atlanta — using data from U.S. Census Bureau’s 2018 Annual Business Report.

In Philadelphia, there are 1.8 Black-owned businesses per 1,000 Black residents, the lowest of the five cities researched. Philadelphia also has fewer jobs per working-age resident in the city than other cities the region. CCD president and CEO Paul Levy said that while the pandemic caused a surge in unemployment nationwide, Philadelphia’s Black and minority-owned business community, especially, is in dire need of assistance.

“To reduce unemployment and poverty as the health crisis ends and recovery begins, Philadelphia requires far more than a return to the status quo before COVID,” he said during a recent CCD event. “We need a sustained effort to increase the number of Black and minority-owned businesses as well as much greater attention to business growth overall.”

The Enterprise Center in West Philadelphia has a mission to support minority entrepreneurs with advocacy and planning. Its president and CEO, Della Clark, has done that work for almost 30 years and is aware of the issues that minority business owners face — and having capital is is one of the biggest The Enterprise Center has worked to address, she said.

“The Enterprise Center in the most recent years has become laser focused on capital,” Clark said at the CCD event. “We’ve been putting small amounts of equity into our enterprises.”

Clark said that scaling minority businesses is especially difficult because of a lack of capital. Most minority businesses try to deal with the issue in the short term by stacking too much debt, hurting themselves in the long term.

Jerry Sweeney, president and CEO of Brandywine Realty Trust, agrees with Clark. During a recent listening tour to connect with minority business owners, he heard that their growing businesses had very little liquidity.

Brandywine Realty Trust has collaborated with The Enterprise Center for the Grow Philadelphia Capital Fund, a fund designed to provide low-cost capital with a 1% interest rate to minority-owned construction businesses; an estimated 6.9% of construction firms in Philadelphia are minority-owned. Brandywine contributed $250,000 to the fund in late 2017, which was used for 13 loans to 11 businesses.

Ron Busby, president and CEO of the U.S. Black Chambers, Inc., called out the recent “trifecta impact” on local communities of color: In addition to the killing of George Floyd by police, coronavirus was a source of negative impact, as was the federal stimulus package that did not help Black and minority businesses in the way it was meant to.

“It was just redistribution of taxpayer money to firms and not for small businesses,” Busby said. “If it was the Paycheck Protection Program (PPP) loan, it was never really created for Black businesses. Many of our businesses are cash and carry but don’t have payroll.”

Busby said creating programs that intentionally help Black-owned businesses is crucial to their advancement. Certification also can help Black businesses, but the process is not easy.

“Things that get measured get acted upon,” he said. “The number of Black firms is 2.6 million, but we’ve been using that number since 2009. The only certification for Black businesses is through the federal government’s 8(a) [Business Development Program], which is very costly, convoluted and takes a long time.”

The U.S. Black Chamber has created ByBlack, a platform for all Black-owned businesses in America to be certified so that corporations, other businesses and individuals can recognize their status as full-fledged businesses. ByBlack can also inform communities on how they can shop with and support Black businesses. (For a Philly tie, check out Katika, a platform for products and services from Black-owned businesses locally and internationally.)

Some of these challenges resonate with Lokal Artisan Foods’ McGill. While networking has helped her significantly, a challenge she still faces as a Black woman entrepreneur is in finding ways to grow. She said she’s frequently looking for ways to “bridge the gap between access and opportunity.”

After the pandemic began, McGill’s successfully applied for and received a U.S. Small Business Administration loan in April but did not get the first PPP loan for which she applied. She later received a forgivable PPP loan by way of basketball legend and entrepreneur Magic Johnson’s EquiTrust Life Insurance Company.

McGill believes she owes it to her community to help other Black entrepreneurs succeed and grow more Black businesses. She intentionally hires people from underserved communities so they can learn alongside her at meetings and not only work for her as employees.

“Everyone that works for me doesn’t just work for me; it’s a continuous business opportunity,” she said. “If I have a meeting with the [Delaware River Waterfront Corporation], they can come too. I would love anyone working for me to open across the street. I intentionally hire people from underserved communities so that it’s a constant learning experience.”

The goal: more entrepreneurs like her.

“At [last year’s] Roots Picnic there were only two Black-woman owned vendors,” she said. “At Made In America, I was the only one.”

Michael Butler is a 2020-2022 corps member for Report for America, an initiative of The Groundtruth Project that pairs young journalists with local newsrooms. This position is supported by the Lenfest Institute for Journalism.