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Black-owned businesses saw a post-pandemic boom, but challenges still lie ahead

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Posted at 11:48 AM, Feb 23, 2023

AURORA, Colo. — Hewan Kassa brings a sense of home to her family-owned business, Endless Grind Coffee. She is using her family's Ethiopian cultural knowledge to roast and serve coffee to her neighbors in Aurora, Colorado.

"At first, it was like survival mode, 'How do we even run this place?' But the passion was there. We all wanted to do it. Fast forward five years, we actually know what we're doing," Kassa said.

Five years is an astounding accomplishment for any business, especially factoring in the pandemic. For months, as the country faced the unknown, Kassa said her coffee shop was only bringing in about $25 a day.

That is until a community push to support Black businesses turned the tides on what could have been the final blow to her family’s dream.

"Everything turned around for us, like in that moment," she said.

Investment for the Kassa family made all the difference; data shows that’s been the case nationwide.

In 2020, research from the University of Santa Cruz reported that 41% of Black-owned businesses closed during the pandemic, compared to 17% of white-owned businesses.

University of California Santa Cruz Professor Robert Fairlie reviewed Census data after stimulus checks went out. The data showed that the amount of Black business owners was 28% more in the third quarter of 2021 than it was pre-pandemic.

Jice Johnson, the founder of the Black Business Initiative in Colorado, says while the statistics are promising, there are still a lot of challenges ahead for new businesses.

"Ninety-six percent of Black-owned businesses are single-member LLCs and self-proprietorships. That makes them weak. They're still undercapitalized and they're still in low barrier to entry opportunities," she said.

Johnson says many of these problems Black-owned businesses faced before the pandemic are present, like a lack of employees and collateral.

"So, understanding that before I lend you money, I want to know that you own something that I can collect against. Sounds reasonable," said Jice. "Except the Black community doesn't own homes. Why doesn't the Black community own? Well, now you would get down to all the way back to systemic redlining."

"What looks like one problem just opens up a plethora of other systemic problems, and it becomes very convoluted as to how to address them," she said.

Jice notes that the stimulus money showed the kind of difference investing in people who were historically underinvested can make.

"I absolutely think there needs to be government investment, but I also think that there needs to be private investment," she said.

That’s precisely what the Kassa family hopes the next step is for Endless Grind Coffee, attracting private investment by becoming a supplier for offices or other businesses.

"That's what investment would look like for us. I feel like when people come in here, they love us. So, the hardest thing for us and the like biggest hurdle that we always have to jump is just trying to get people in here and getting our name out there," Kassa said.

Business can be hard for everyone, but the right investment can be the make-or-break opportunity that can keep the American dream alive.