By: Gregory Smith, Howard University News Service
During the pandemic, Black businesses have faced challenges. Some were forced to close or nearly shut down, while others were fortunate to have an uptick in business.
Black businesses were hit the hardest and had to adapt quickly to the mandatory shutdowns across the country while everyone was forced to stay at home. Here’s a look at how Black businesses from the nation’s capital to the deep south have managed to survive through creative strategies.
WASHINGTON – Virginia Ali is owner of Ben’s Chili Bowl, an iconic restaurant she and her husband, Ben Ali, opened in 1958 in Washington D.C. Ben Ali died in 2009. He was 82.
The restaurant has since become such a landmark that a long list of celebrities have made a trek through its doors, including former presidents Barack Obama and George W. Bush, the Rev. Jesse Jackson, Serena Williams, Jimmy Fallon, Kevin Durant, Steve Harvey, Kevin Hart, Mary J. Blige, Dave Chappelle, Chris Rock and Anthony Bourdain.
The restaurant is woven into the fabric of the city’s Black community. It helped serve the tens of thousands of protesters who came to Washington during the Poor People’s Campaign in 1968 and the March on Washington in 1963.
Ben’s was one of the few restaurants open after curfew to provide food and shelter for those working to restore order after the Washington riots in 1968 following the assassination of the Rev. Martin Luther King Jr.
Still, Ali said that COVID-19 was the hardest obstacle that her business has ever faced, because this was the first time that her business had to close its doors for an extended amount of time. It normally stayed open from 7 a.m. to 2 a.m. and until 4 a.m. on the weekends, she said.
“We didn’t receive the (federal Paycheck Protection Program) loan the first go around,” Ali said. “We had to cut back on staff, adjust our hours, and figure out a way to reach the community in a different and more effective way. This virus has been very frightening, but our community embraced and helped us.”
The Paycheck Protection Program (PPP) was a loan issued by the federal government at the beginning of the pandemic to provide a direct incentive for small businesses to keep their workers on payroll. The first draw PPP loans could be used to help fund payroll costs, including benefits, rent, utilities, and worker protection costs related to pandemic.
Ali said she began to receive letters and donations from people throughout the community. The restaurant received enough funds to deliver box lunches to Howard University Hospital and other first responders, she said. She credited her children, some who have other professions, for taking on full time roles in the restaurant to ensure the family doors stayed open.
Not every business was fortunate to receive the support from an entire community and other popular publications.
Oriel McKinney, owner of 1000 Degrees Pizza in Winter Garden, Florida, said that the pandemic was very challenging, because she and her husband, Brian, had just purchased the location in August 2019.
McKinney’s business was forced to shut down due to the Florida governor’s executive order.
When she was cleared to re-open, only a handful of staff were able to work, she said. With no customers able to eat indoors because of health department restrictions, McKinney and her husband had to alter their service model. A key factor in their success was being a part of a Facebook curbside pickup group, McKinney said.
“Our marketing plan had to shift fast,” she said. “We had to adapt to curbside pickup and continue to grow our relationship with the community.”
McKinney said she made calls to other owners to give and receive advice on how to operate business during uncertain times. She said she joined forces with local Black businesses, such as Smile Ice Cream and Full Press Juicery, selling their products in her store. Their social media page has kept the community up to date with the latest news, products, and fundraisers, she said.
Her business was able to supply food to the National Basketball Association during the 2019-2020 playoffs and championship inside the quarantined facilities, “The Bubble,” at Walt Disney World, which helped business tremendously, she said.
“We were one of the few businesses allowed to deliver inside the bubble,” McKinney said. “It was a very thrilling experience. But we still aren’t in the clear with the new Delta variant on the rise.”
McKinney said that they have adjusted their hours and made customers feel comfortable by providing curbside pick-up, takeout, and delivery.
Terry Jackson, owner of Texas First Roofing and Construction based in Dallas, said he learned from the 2008 recession and made sure that any businesses he owned would be essential. Jackson’s business, which employs about 20 workers, puts roofs on residential and commercial buildings and builds fences.
“We didn’t have to shut down completely, just had to cut back on our staff and expenses,” Jackson said. “We used to do both interior and exterior projects but since the pandemic we have done primarily exterior projects to keep our staff and clients safe.”
Jackson said that knowing the company numbers and being well structured made his business thrive. He was able to see accurate numbers which came in handy as he narrowed down his expenses.
What truly helped business, he said was the huge storm that hit the state in February 2020 and left Texans stranded without electricity for weeks. At least 210 people died, and the storm caused an estimated $200 billion in damages.
Jackson’s business was thriving before the pandemic, but work created by the storm’s damage was a tremendous boost.
“We are still restoring residential and commercial properties today,” he said.
Ernest Strickland, president and CEO of the Black Business Association of Memphis, said that many small Black businesses struggled to find consistent capital before the pandemic swept the nation.
Because they were underfunded, Strickland said, they began to operate in survival mode government quarantines shutdown businesses and fear of infection caused customers to stay away.
H&R Block conducted a study that revealed more than half of Black-owned businesses experienced at least 50% decrease in revenue during the pandemic compared to 37% of White business owners.
A study by the University of California, Santa Clara found that 41% of Black-owned businesses across the country shut down between February and April in 2020 compared to 17% of White businesses.
“A common problem that I saw in most Black businesses that failed was the lack of proper accounting and bookkeeping,” Strickland said. “Businesses weren’t able to apply for PPP loans because they didn’t take care of their books.”
In response to the problem, Strickland said his association partnered with the local government to provide a grant program to those businesses in need of assistance. The program targeted solo entrepreneurs such as barbers, hair beauticians, and other small business owners, he said.
“We helped raise and distribute over one million dollars to local businesses who were greatly impacted,” he said.
Everett Burton, a nationally known Certified QuickBooks consultant who resides in Memphis, Tennessee, said that he held QuickBooks classes for businesses in different cities before turning everything virtually due to the pandemic.
The businesses that failed or struggled through the pandemic didn’t keep track of their books, their financial accounting, Burton said, and that’s why companies turned to him for help.
“Most businesses weren’t allowed to get loans, because they had no books,” he said. “Businesses weren’t paying appropriately. You can’t pay people cash out the register. Then businesses who did receive the PPP loan couldn’t be forgiven because they had no proof of how they used the money.”
Businesses were able to qualify for loan forgiveness during the 8–24-week time period following the loan disbursement. But businesses had to show proof of employee and compensation levels, loan proceeds are spent on payroll costs and other eligible expenses, and at least 60% of the proceeds are spent on payroll costs.
Burton said that the pandemic made people conduct their business the correct way.
“The smart ones used the pandemic to become more educated,” he said. “I tell people that you have a business, but you’re not doing business. There’s a big difference.”