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Small Business Saturday Gives Black-Owned Stores A Boost, But Retail Still A Hard Sell

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Oyin Handmade, Facebook
Oyin Handmade, Facebook

Every Saturday is Small Business Saturday for Oyin Handmade owner Jamyla Bennu. Her 3-year-old shop in the budding Charles Village neighborhood of Baltimore has welcomed customers only one day a week since she opened its doors in February 2009. But there is one particular date, she said, that really bolsters sales -- the Saturday right after Thanksgiving.

"It drives traffic both to our Internet business and to our brick-and-mortar business," Bennu told The Huffington Post, referring to American Express' annual Small Business Saturday initiative, now in its third year. "We get lots of people through social media ... [who] may have waited for the sale to try [our products] for the first time even if they had heard about it before and had been interested," Bennu said. "That discount or sale may be the thing that's pushed them over the edge."

Melinda Emerson also plans to use Small Business Saturday to build her client list.

Emerson, an entrepreneur expert, said she is discounting her latest ebook, How to Become a Social Media Ninja, this weekend. "If you buy something from me for $10, next time you'll probably spend $50, so it's more valuable to me to discount my hottest product right now," she said.

Bennu and Emerson are not alone in looking to capitalize on Small Business Saturday's success. An estimated 103 million Americans shopped at small businesses on the Saturday after Thanksgiving last year, with merchants reporting a 23 percent increase in card-member transactions that day.

Yet Bennu and Emerson are still unusual. Although African-Americans together wield a trillion-dollar spending power, retail isn't a sector where black entrepreneurs are cashing in.

"A lot of our successful businesses aren't retailers," said Harry Alford, president of the National Black Chamber of Commerce. "They're architects, engineers, IT [specialists], accountants, so [Small Business Saturday] may not really apply to how they do business," he added.

Maggie Anderson, who wrote the book Our Black Year chronicling her family's attempt to shop only at black-owned businesses for 365 days, said that black entrepreneurs have trouble in the retail sector. She blames that difficulty on a lack of access to capital, mentors and networks, and on the "sometimes arbitrary and latent racism" that keeps many businesses from even getting off the ground.

"Black business owners have to do what any other business owner has to do in order to succeed," Anderson told HuffPost Black Voices earlier this year. "The difference is that it is harder for a black business owner even when they do exactly what any other entrepreneur does," she said.

In their 2008 book Race and Entrepreneurial Success, economists Robert W. Fairlie and Alicia M. Robb made a similar point. Conducting in-depth research on why businesses owned by Asian-American entrepreneurs tend to be more successful than those owned by white and black entrepreneurs, Fairlie and Robb found that a high level of startup capital was the most important factor in the Asian business success while too little startup capital contributed to black businesses' relative lack of success. Asian business owners were also boosted by their higher levels of educational attainment relative to both white and black business owners, while white self-employed workers benefited from more opportunity to acquire work experience through a family business than their black counterparts had.

Despite Fairlie and Robb's findings, the U.S. Census Bureau reported that black entrepreneurship is on the rise, with the number of black-owned businesses in the U.S. increasing by 60.5 percent between 2002 and 2007, according to the most recent data from the bureau's Survey of Business Owners. During that period, the retail trade accounted for 15 percent of black-owned business revenue, the report said. Yet during the same period, black-owned businesses generated only 0.5 percent of the total receipts of all nonfarm businesses in the United States.

"According to the U.S. Census Bureau, black business is the fastest growing piece of American business," Alford said. But "despite the demographics that show [an increase], many of us are sole proprietors [and] have one or two employees at best," he added.

Faced with her own lack of startup capital, Bennu turned to the Internet to launch her hair and body care business. "We were in business online before we opened our brick and mortar, and I think that the much lower entry cost in opening an online business was instrumental for us in being able to get started period," she said. "If we had had to rent a kitchen and hire people in order to get started ... we wouldn't have been able to afford it."

Philadelphia business owner Joel Morgan believes that it's important for startups to mix 21st century social media savvy with traditional, in-house customer service. "I was initially concerned about getting the money ... but before I started the business, I talked to people in [the small-business community] and they were more focused on customer service than anything else. That was a surprise to me," Morgan said.

Just six months into his own entrepreneurial endeavor, a body sculpting and chiropractic business called Philly Lipo Laser, which he operates with his brother and mother, Morgan plans to take advantage of Small Business Saturday.

"We are a local business, but we're heavily reliant on the Internet," he said. "We've done the majority of our business on social media with Groupon and Living Social," he added.

Morgan cleared the initial capital hurdle by borrowing from family and savings. When that option falls short, this year's Jumpstart Our Business Startups (JOBS) Act may offer some help.

"The most important thing is that it's really cleared the way for crowd-funding," Emerson said, highlighting the provision that allows startups to gather in small investments from many individuals without making an initial public offering.

"One of the things that I have been struggling with is that everyone in the small-business community thinks that all the super smart people that deserve venture capital and angel investment live in Silicon Valley," Emerson said. "I'm really glad to know that anybody with a good idea ... a good enough story ... a compelling enough video can get funding. The crowd-funding platforms are going to do wonders and help small-business owners that otherwise would have no way to raise some capital."

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