Rhett Buttle, Contributor, Forbes,
With protests entering their third week across all 50 states, and an ongoing pandemic exposing brutal disparities in both economic and physical health, this country is at a pivotal moment. The issues at stake are far from new. But a sudden convergence of tragic events have again exposed the dramatic inequality in America’s foundation. The federal government, corporate sector, financial institutions and small business will all have a role to play in delivering justice for black communities.
In order to explore a path forward, I turned to Ron Busby, President and CEO of the U.S. Black Chambers, Inc. I have known and worked with Ron for more than a decade. He’s a successful former business owner, who grew his first company, USA Superclean, into a $15 million business and the largest black-owned janitorial firm in the country. Before that, Ron honed his skills at some of the nation’s largest corporations, including Exxon, Xerox, IBM and Coca-Cola. He has served on the Small Business Administration’s Council on Underserved Communities and the White House African American Leadership Council. I spoke with him about this historic moment, the challenges of health and wealth creation in black communities, and the role all of us can play in supporting black-owned businesses.
On a more personal note, I am thankful that Ron took time during this critical moment for this discussion. We all have the responsibility right now to lift up small businesses—especially black-owned businesses. I have long believed that small business and entrepreneurship are a key pillar to promoting equality, democracy and a more equitable economy. Promoting black business must be part of the solution.
Rhett Buttle: We’re living through a really visceral moment where the linkages between health, wealth and systemic racism are perhaps clearer than ever before. How do you think about this moment?
Ron Busby: Right now, Americans across the country are repeating the words “I can’t breathe,” but black Americans have felt that way for centuries. Last year was the 400-year anniversary of when the first black people arrived here in Virginia, and we have felt this fear, anger and uncertainty for the last 400 years.
I think what you’re seeing right now is a three-pronged pandemic. It started with COVID-19, where you saw the health disparities in black communities and the fact that we were dying at higher rates. Some folks equate health to wealth—well, we didn’t have either of those.
The second prong was the implementation of the stimulus package. Right from the beginning, in calling it the Paycheck Protection Program (PPP) it was clear to me that it was never meant to support black businesses. The policymakers know our businesses often don’t have payroll. They know we’re in the industries that have been hit the hardest. They know that we’ve been locked out of capital. So when they said “go to your bank,” they knew that $349 billion was going to go out and 50 of their best friends were going to get many of those dollars.
And third, is the outright racism in policing—that just the color of our skin is enough to get us thrown in prison or get us killed on the street. Social media and technology is now showcasing to the rest of America what black America has felt ever since we got here.
Buttle: The protests about police brutality and equality are playing out on our Main Streets. What can small business owners do to support the protestors and the cause?
Busby: I think small business owners and consumers can show their solidarity by supporting black-owned businesses. I think coming out of these protests, lots of people will make a conscious effort to go out and spend their money at black-owned businesses. But one challenge is that, these days, consumers are able to rate their experience of a business on platforms like Yelp. And we’ve seen that, often, outsiders come into our communities and rate our businesses much lower than white-owned businesses where they had the exact same experience. We’re being penalized just because of where we’re located and the ethnicity of the owner. So I would ask consumers and business owners looking to support black businesses to understand the challenges we’ve had over the decades and realize that there may not be a quick fix in regard to your experience of that business.
Buttle: You mentioned decades of challenges for black-owned businesses. What are some of those challenges, both historically and in this particular moment in America?
Busby: Last week was the 99-year anniversary of the Tulsa Massacre. This was a district run by freed slaves, and they had their own banks, hotels, businesses. It was a thriving community. And 99 years ago, white people in a neighboring community felt so challenged that they burned it to the ground—the entire city, with all its residents. So that’s what happens when black people start to build success in America. We know other people will want to burn it to the ground, because they know if there is real equity, then we have a chance to prosper.
The only way that we can create wealth in black communities is through the creation of new black-owned businesses and broad support of those businesses. The main challenge that black-owned businesses have always faced is access to capital and opportunity. I think corporate America bears a huge responsibility for addressing this issue. Corporate America and the federal government know that the average black family has about $17,000 of wealth versus $171,000 for a white family. They know that, during this pandemic, the average black family has only $400 set aside for an emergency—and now you’re asking them to survive off a $1,200 check for two-plus months?
As trillions of dollars of stimulus have gone out, the government still won’t provide the data that would allow us to have a true conversation about accountability and about the displacement of wealth in America. We’ve been asking for data about where those dollars went and where the opportunities are. There’s been a lot of conversation about infrastructure—that’s a great conversation to have, but I don’t want outside organizations, companies and investors coming into black communities when all of this subsides. Those opportunities to build new infrastructure and construct new buildings should go to businesses that are part of the community. You can’t ask us to support outside investments in our communities and not have anger like we’re seeing on the streets today.
We understand that it’s always going to be a challenge to be black in America. But when there’s a conversation about equity or a conversation about wealth creation, we want to be part of that conversation.
Buttle: What’s coming through loud and clear is that black business owners need an opportunity for wealth creation. Can you talk a little bit more about what needs to happen to promote this opportunity? Are banks doing their job, especially during this economic downturn?
Busby: I thought from the get-go that the PPP wasn’t created to address the needs of all American business owners. Only 109,000 Black-owned businesses have even one employee. So a very small percentage could participate in PPP coming out the gate. If we can’t write off a 1099 employee, and you know that’s the majority of our workforce, you were never trying to be inclusive. Then there’s the reality of banking relationships in our communities. Maybe I’m old school, but I want to know my banker, I want him to know me. When I opened up a bank account as a business owner, it created endless opportunities for me. Black business owners have to be able to connect with financial institutions in their community. We know that 70% of the loans made by black-owned banks go to black homeowners and black businesses. So if I have a chance to put my money somewhere, I’m going to put it where I know it goes back into my community. The challenge for black-owned banks is they don’t have enough loss reserves or funding to make loans. When the PPP came out, black-owned banks were forced to make PPP loans and then wait on payment from Treasury and the SBA. If a bank is undercapitalized—like so many of our businesses are—they just can’t compete. So it was tough for them to fulfill all the requirements for PPP.
So this whole stimulus package has never felt inclusive, especially for minority-owned businesses. And banks have a huge role in making access to capital more inclusive.
Buttle: Beyond the banks, you’ve talked about a couple sectors—corporate America and the federal government—that have a big role in fostering wealth creation in black communities. What can these entities do to support black-owned businesses?
Busby: Again, the top concern for black-owned small businesses is accessing capital. So the government needs to remove barriers for black-owned businesses to receive the capital they need. It’s projected we will lose 40% of black-owned businesses because of COVID-19 by the end of the year. There will still be opportunities for growth, because those businesses had customers, clients, vendors and employees. Black entrepreneurs have to figure out how to buy those firms, merge those firms, or at least acquire those customers and clients that they had. There is opportunity in chaos.
Historically, many of the opportunities that African-American business owners have had came through the federal government. When they finally passed laws about diversity and inclusion, it was really created for black businesses. The 8(a) program is a SBA-sponsored minority business development program that I participated in, and it really changed the trajectory of my firm. It allowed me to go from bidding on contracts in the hundreds of thousands of dollars in the private sector to millions of dollars in the public sector, literally overnight.
Corporate America has come out with the 15 Percent Pledge, which calls on major, big-box retailers to pledge 15% of their shelf space to Black-owned businesses. So I see where corporate America can participate, both in access to capital and access to opportunity.
Buttle: What role can entrepreneurship play in bringing equality to our country over the long term?
Busby: Entrepreneurship is going to be critical to getting us out of this three-pronged pandemic. New ideas and vision come from people who are willing to take risks, willing to see beauty in the midst of all this ugliness. Entrepreneurs have that ability, more so than any other group in America. So I believe that entrepreneurs—especially minority entrepreneurs—are going to be critical in America’s comeback.
You hear a lot about how black people represent about a trillion dollars in spending power each year. But it’s usually not black people talking about that, it’s usually corporate America trying to figure out how they can market to capture some of that spending power. So black entrepreneurs have to change the conversation to figure out how we can meet the needs and demands of that trillion dollars in our community. We don’t want to do the same businesses that we’ve done in the past and end up missing out on the new opportunities. Whatever this new normal is going to be, we have to start thinking about the future of our businesses. Forty percent of all black revenue comes from five industries—and those are the industries that are hit the hardest by this pandemic. In the restaurant industry, Black restaurateurs are coping with a tremendous loss of foot traffic due to social distancing, coupled with the necessary gridlock of the Black Lives Matter protests. What is the future of the restaurant business? Black-owned restaurants are innovating and equipping their businesses to run off deliveries via online apps and takeout orders. We have to be forward-thinking about the future of our communities and businesses as we come out of COVID-19.
The same goes for the protests. I think a lot of people are worried that we’re going to go back to where we were before the police officers in Minneapolis got arrested. But I don’t think we’ve ever seen Americans come out in this force and numbers—and it’s not just black people, it’s everybody coming out and saying, “There’s got to be some change.” So I think right now really is a moment that there could be change that happens in this country because of all the conditions—health, wealth, racism—all coming together at the same time.