For Black-Owned Businesses, Pandemic Shutdowns Followed by Resurgence

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The rib and whiskey bar that Terri Evans opened in Chicago’s South Loop with her 401(k) savings attracted mostly tourists and convention-goers — until the coronavirus pandemic and stay-at-home orders swept the countries from March 2020. Evans worried about keeping his 12 full-time employees on the payroll.

“When things got dark, they got really dark,” Evans, 47, said. “It was time to get creative and get a little scrappy.”

She decided to start a new business delivering food and alcohol to the city’s boating community, spread across Chicago’s 10 ports in Lake Michigan.

In the early months of the pandemic, black-owned small businesses closed twice as fast as other businesses, with 41% closings, according to April 2020 census data. Concentrated in retail, in the restaurant and other service industries, black-owned businesses have found it harder to pivot given pandemic restrictions. They operated on thinner margins, lacked bank connections, and were excluded from the federal government’s small business assistance package.

Then black business ownership rebounded, climbing higher than it had been before the pandemic, a Washington Post analysis of the Bureau of Labor Statistics showed. In 2021, black-owned small businesses were created at the fastest rate in at least 26 years.

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Evans’ restaurant, Windy City Ribs & Whiskey, is two miles from the water and the city’s 6,000 boat launches. She launched Dockside Delivery on her restaurant’s website in May 2020 in hopes of catering to this new clientele.

“I’m going to focus on that audience that still has money, that’s still hanging around in the middle of this pandemic,” she said.

It started at the nearest port, favored by established, mostly white boaters. They weren’t welcoming at first. “They were like, ‘Why are you in my port trying to sell me packets of food?’ ” she says.

Her business took off later that summer when she focused on the black boating community, particularly young female boat owners. “They were going to figure out how to get me to win,” Evans said. “I realized that I should always have started within my community.”

She brought in other restaurants owned by struggling women and blacks, offering menu options ranging from Cajun to organic salads and sandwiches. Its operations team picked up orders and made deliveries. His liquor license—and the relaxation of liquor laws to allow liquor delivery—made the business profitable. She was able to retain all of her staff even though she had stopped serving lunch at the restaurant.

It is now looking to expand Dockside Delivery to other cities with larger boating communities like Miami by 2023. It first needs the capital and technology resources to build an app. But her parents had always warned her about debt.

“The only way to scale is to use money to scale,” Evans said. “Otherwise, you remain a small business. It’s minimal to think that you can’t bet enough on yourself to go out and get a loan.

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After pivoting successfully at the start of the pandemic, some Black-owned businesses now face the economic challenges of labor shortages, supply chain delays and inflation.

Tyrone Foster, owner of a 20-employee landscaping company in Portland, Oregon, expected his residential clientele to dry up during the pandemic recession. He obtained minority-owned business certification in hopes of landing commercial and public works contracts with more stable budgets.

His company, Precision Landscape Services, was awarded a two-year contract now a 10 miles section for the city’s transport network in October 2020, a job that represents around 10% of its activity.

To his surprise, demand for outdoor living spaces skyrocketed as families hunkered down at home.

“People were like, ‘Okay, I’m not going anywhere. I don’t want to just sit inside and have a muddy mess in my garden. I’m going to turn this into some kind of oasis that I can enjoy during the pandemic,” said Foster, 51.

His company ended 2020 with record sales. But the demand for residential landscaping services amid a booming real estate market quickly outstripped its ability to deliver. Without enough workers, Foster found himself turning away 50% of potential customers.

“I was sick of it,” he said. “I could have literally doubled the size of the company if I could have hired people. I found no one.

He offered a signing bonus of $1,000, which he increased to $1,500 after receiving no applications. He offered employees a referral bonus of $1,500 for each new hire they brought in. With no takers, he pooled the bonuses and announced a raffle for those who worked three months of the summer to win $10,000 in September.

“Goose eggs! Nothing! It still hasn’t moved people,” Foster said. “At that point, I gave up. There’s nothing else I can do.

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He said some people didn’t want to put their health at risk by working, even after he started paying workers’ mileage to follow the company truck in their own car to avoid having more than one person in a vehicle. Others told him they could get away with federal stimulus checks. And it faced competition from other companies such as Amazon aggressively hiring for warehouse jobs and Taco Bell offering managers $100,000 a year. (Amazon founder Jeff Bezos owns The Washington Post.)

Salaries, gas, product and material costs have also increased. Equipment, spare parts and even factories have become harder to find.

And he expects demand for landscaping to plateau as people begin to spend their time — and budgets — on travel, dining and other experiences. Families who had lost between $20,000 and $100,000 to renovate their gardens will not need large-scale works for at least five years, he said.

Foster said its 2021 earnings fell more than 2%. Yet in March he bought another landscaping company across the river in Vancouver, Washington, hiring 15 employees.

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In New York, Tammeca Rochester was about to expand its spin studio, Harlem Cycle, when the pandemic forced it to close.

To keep the business afloat, Rochester rented its studio bikes and delivered them to customers’ homes. This income covered her monthly rent of $3,750. Its instructors have generated income by teaching classes broadcast live on Zoom. She’s created an on-demand platform with over 250 workout videos ranging from cycling, cardio, strength and recovery to cooking demonstrations.

Rochester, a former mechanical engineer, and her boyfriend had opened the studio in 2016, with savings after she was repeatedly denied loans despite her excellent credit and six-figure salary.

With no relationship to traditional banks, Rochester said, it was at a disadvantage when it came to getting government pandemic assistance through the Paycheck Protection Program. Eventually, another small, black-owned business put her in touch with an accountant who helped her get the money. She has also received grants from corporations and foundations concerned with saving minority-owned businesses.

“The corporate racial reckoning only lasted a year and a half,” Rochester, 40, said. “These $5,000 to $10,000 grants helped create a buffer, but it wouldn’t take us to a whole new level.”

His studio reopened after 15 months.

And with an interest-free loan from a community foundation and two more loans from an economic development corporation and a community lender, Rochester was finally able to launch its second studio in Harlem in April.

Reggae and soca blow through the courts. The smell of peppermint permeates the air. To make up for the shortage of instructors, many of whom left the state during the pandemic, one of his instructors began training clients to teach.

“I felt like I had started a business four times during the pandemic,” she said.

Andrew Van Dam contributed to this report.

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