“The State of Black Arizona,” a nonprofit organization, released a report earlier this summer showing more than 50% of Black businesses in the Copper State are struggling.
According to the report, the reasons Black businesses in Arizona are hurting include many of the same factors Black entrepreneurs across the country are dealing with. A lack of access to capital, low levels of personal wealth, and racial disparities in obtaining credit and more.
Additionally, the report said Black entrepreneurs have the lowest opportunity share among races in the U.S., meaning they’re more likely to start businesses out of necessity rather than an opportunity to make more money.
That could be why Black businesses skyrocketed during the COVID-19 pandemic when Black people were the first to be laid off. The report also quoted Brookings Metro data, saying if Black businesses reached parity with the U.S. population, there would be 4,945 additional businesses in Metro Phoenix and an additional 132,000 jobs in the Arizona capital.
In addition to financial issues, the report cited networking, management education, business expertise, and marketing as challenges facing Black business owners.
Fernanda Sayles, the owner of FernDiggidy Sweets & Treats in Phoenix, started the business in 2015 while working at a doctor’s office, using her home kitchen.
“I didn’t have a lot of money at all to start my business,” Sayles told Tuscon.com. “I’ve left a couple of jobs to work my business full time, but of course, the bills kept coming, so I had to go back to work” at a doctor’s office.
Sayles added she was forced to start small and slowly grow her business through personal contacts and face-to-face meetings with other entrepreneurs and the local Black community, which embraced her business.
“I would go to local barbershops all over the Valley to get the word out, and they welcomed me in, supported me, and told everyone they could about my business,” she recalled. “The community was my backbone, from the barbershops to friends and even complete strangers.”
Black entrepreneurs across the U.S. grow their businesses beginning with people they know and using word of mouth to promote their products and services. Black entrepreneurs have also used social media as free advertising to reach new customers.
Teniqua Broughton, the executive director of the Black State of Arizona, told Tuscon.com, “disparities in personal wealth, and building proper, equitable generational wealth, which have been historically taken away,” from Black men and women are among the reasons why Black-owned businesses account for just 2.4% of US businesses despite a 30% increase in Black entrepreneurs from pre-pandemic levels.
