Large windows displaying plants and colorful African-style robes beckon customers into the Nile Cafe, on Germantown Avenue. Inside, funk music plays to a table of young men dining on vegan soul food like soy-based chicken and duck substitutes, accompanied by sides like okra and collard greens.
The Nile has been a Germantown Avenue institution for 23 years. In that time, though, restaurant owner Michelle Joseph says she’s seen a large-scale changeover of other shops on the nearby Germantown blocks. “I’ve seen a lot of businesses come and go,” she says. Today, some blocks of the avenue are thriving—but examples of successful pockets of African American-owned businesses are rare in the city at large.
Philadelphia can be a difficult city for anyone to do business in, with relentless waves of taxes, fees and regulations. Rates of African American ownership are particularly low: Only 2.4 percent of businesses in the Philadelphia area are black-owned, according to a recent Pew report—depriving neighborhoods of wealth, job opportunities and control of their economic destiny.
In an effort to increase support for black commerce, the Nile Cafe is one of more than 280 businesses taking part in the iBuyBlack discount card, offering price reductions, free gifts, and other perks to customers. The program was launched in April by the Philadelphia Community of Leaders (PCOL), which sells the card for $10 on an iBuyBlack website. The directory of participating businesses includes restaurants, boutiques, realtors, law firms, construction companies and more, spread around the city and suburbs. At the program’s launch, the group reported an initial 1,500 cardholders, with a goal of signing up 10,000 Philadelphians and 500 businesses by the end of the year.
“All this will be good for the city of Philadelphia,” says Bilal Quayyum, a community activist and PCOL member. “Support of black businesses helps the city grow as well.” He says the effort is based on a similar program one of the members observed in Detroit. The organization cites statistics showing that a dollar earned by blacks stays in the black community for six hours, while a dollar earned by whites stays in white communities for 17 days.
In Philly, where 41 percent of the city’s population is African American, the 2.4 percent of businesses owned by blacks is in contrast to 78.8 percent white-owned and 10 percent Asian-owned. Disproportionate business ownership rates are common throughout the country.
Disproportionate business ownership rates are common throughout the country, where about 2 percent of businesses with at least one employee are owned by African Americans. In fact, among large metropolitan areas with sizable black populations, none come close to matching the percentage of the population with business ownership, according to census data.
In Philly, where 41 percent of the city’s population is African American, the 2.4 percent of businesses owned by blacks is in contrast to 78.8 percent white-owned and 10 percent Asian-owned. Those numbers don’t tell the whole story. The business ownership statistic is for the Philly metro area, which is 21 percent black, while the population numbers are just for the city itself. And the Pew report only takes into account businesses that have at least one employee, not those who are just self-employed. But even that is telling: Paid staff suggests a healthier revenue stream, which could help to reduce the 31 percent poverty rate and 19 percent unemployment among African Americans in Philly.
“The more support businesses receive, the more opportunities to expand and hire more folks,” Quayyum says. “Jobs are the number one solution to cut down on the number of folks living in poverty.”
Experts cite a number of reasons African American businesses lag behind white and Asian-owned companies. For one thing, there’s the issue of capital: Small businesses are often funded by friends and family of the entrepreneur, but African American communities tend to be short of resources. As of 2013, the median wealth of black households in the United States was only $11,000, compared to $141,900 for white households. And with few black businesses in a community, there are not very many examples or mentors for younger entrepreneurs to follow.
“Black-owned businesses are not on a level playing field,” says Jerome D. Williams, executive vice chancellor and provost at Rutgers University-Newark. “A lot of studies I’ve done show that black-owned businesses and black consumers are at a disadvantage in the marketplace.”
Williams was part of a team that published research in 2014 showing that black small business owners have a disproportionately difficult time applying for loans. Other studies corroborate the challenges. A 2013 report by the Small Business Administration found that on average black- and Hispanic-owned businesses operate “with substantially less capital overall—both at startup and in subsequent years—relative to their non-minority counterparts.” And Federal Reserve data from 2012 showed that minority business owners paid 32 percent higher interest rates on their loans than white business owners.
Both implicit and explicit bias can harm black owners as well, Williams says. “If you’re a black-owned business, you have to really be on your game to meet the needs of consumers and customers because sometimes there’s a perception you aren’t as good as white-owned businesses,” he says. “People might gravitate toward a white-owned business, not even aware they’re acting with bias.” That’s why, the Chicago Tribune reported last year, some black business owners intentionally exclude any indication of race in their promotional materials, and identify themselves as employees, not the owner, when dealing with customers.
The iBuyBlack discount card offers price reductions, free gifts, and other perks to customers. The Philadelphia Community of Leaders sells the card for $10. The directory of participating businesses includes restaurants, boutiques, realtors, law firms, construction companies and more.
Phyllis Jones-Carter, owner of A Part Of Me, a boutique offering vintage, consignment and new clothing on Lancaster Avenue in West Philadelphia, says she experiences consumer bias first-hand. “White people don’t shop black businesses, period,” she says, sitting on a couch amid a diverse selection of dresses, hats, handbags and other goods. “They’re socialized to think that black people don’t have good merchandise.”
Jones-Carter, who offers iBuyBlack cardholders a 10 percent discount, opened her shop seven years ago after she retired as a program manager at the state prison in Chester. She says she expected to attract more business given the expansion of nearby Drexel University, but students rarely stop in, and most of her customers come from outside the neighborhood. “I hate to say that’s the way it is,” she says. “I thought that it would be different.”
Black entrepreneurs in Philly do have several resources: The Enterprise Center in West Philly helps businesses acquire capital, develop growth strategies and secure contracts. The city’s small business department works with the African American Chamber of Commerce to reach black business owners. And in 2015, around $300,000 in city contracts were awarded to minority- and women-owned businesses (about 32 percent of total contracts).
Sylvie Gallier Howard, chief of staff for the Philadelphia Department of Commerce, says that many of the businesses that need the most help are ones that lack information and resources to even know where to look. “They need more assistance, even with the application process. We have a big goal of making sure we reach more of those businesses,” Howard says. “We’re definitely prioritizing more equity in terms of programs that we offer.”
Anecdotally, community members say that black-owned businesses were more common in past decades, but have been replaced over the years largely by stores run by immigrants from Asia and Latin America. The exodus of Philadelphia’s manufacturing base led to a large-scale loss of black businesses, says Brother Rashid, one of the owners of the African Cultural Art Forum on 52nd Street. His store, packed with masks, statues, body products, and its trademark incense, has endured in West Philadelphia since 1969 while countless other businesses around it failed and money fled the neighborhood. “Everyone in the factories had jobs. All the businesses around them made money because people got paid,” he says. “Then the money went down. In the African American community, the money is even less. We’re suffering the hardest.”
Like Rashid, the Community of Leaders’ Bilal Quayyum notes that anything that benefits black businesses benefits the city as a whole. “It’s good for the city when we’re all buying across racial lines,” says Quayyum, stressing that the iBuyBlack card is available for shoppers of any race. “The more folks that support African American business, the better this city is going to be.”Photo Courtesy of Backstage Barbers