Going ‘in-depth’ to understand the potential of Black owned businesses

Brooklyn Communities Collaborative and Hunter College collaborated on a study of Brooklyn-based Black Owned Businesses, highlighting in the report the success of local entrepreneurs, circulation of wealth locally and impact such an investment has had into the health and well-being of East and Central Brooklyn households. 

“Small, locally owned businesses return dollars spent to the local economy at a much higher rate than their larger, chain counterparts” said Gretchen Susi, Brooklyn Communities Collaborative’s Deputy director. 

“Where Brooklyn Communities Collaborative sees additional opportunities is in sourcing from local minority-owned businesses by large, place-rooted institutions like hospitals and colleges, or what we call ‘anchor institutions.’” Susi explained in an interview with New York Nonprofit Media. “These organizations spend billions of dollars annually on goods and services but only a very small amount of that money they spend stays within the communities around them. Brooklyn Communities Collaborative conducted an analysis in 2022 that found that for hospitals in Brooklyn alone, local procurement opportunities could equal up to $2 billion annually. This amounts to an incredible opportunity for Brooklyn institutions to localize and diversify their spending and for local businesses to secure valuable, ongoing contracts – both of which strengthen the economic conditions in our communities.”

The report indicated a variety of key findings. It emphasized the dual impact of gentrification and the role gentrification has played in boosting foot traffic and purchasing power for minority owned businesses while also increasing the risk of displacement due to rising rents and the racial real estate wealth gap. It also highlighted the racial and gender biases that create obstacles for minority entrepreneurs.

“There was a deep sense of pride and determination among those interviewed. And while our research team reported resilience in spite of headwinds like gentrification and racial and gender biases, interviewees were candid in sharing the challenges they’ve faced, particularly around real estate costs and access to capital – two of the areas where structural racial inequity in Brooklyn and around the country is deepest,” said Susi.

The study emphasizes the difficulty these entrepreneurs have in terms of access to capital for funding and expanding. Access to capital is often hindered by skepticism, mistrust, and avoidance from conventional banks, affecting initial funding, working capital management, and plans for expansion. Furthermore, the report brought attention to certifications and securing government contracting opportunities for business owners. Minority and/or women-owned business enterprise certification offers priority consideration for government contracts, however challenges still persist in bidding despite having this certification. 

The study entailed desk research on focus neighborhoods with the compilation of information on key demographic and economic indicators in areas such as Bedford-Stuyvesant, Brownsville, Canarsie, and East New York. Researchers also conducted business owner interviews which involved hour-long dialogue interviews with 32 different business owners discussing how the respondents came to start their businesses, how they raised capital, who their customers are, where they have found support, and what challenges they face. 

“To really understand the process and obstacles Brooklyn’s Black business owners face, we needed to go in depth. By conducting one-on-one interviews, we were able to get a more comprehensive understanding of their experiences, getting to the core of what keeps them going, what challenges they’ve faced, and allowing us to pinpoint the most common strengths and pain points.” said Susi. The researchers also conducted neighborhood walk-arounds in which they spent time in each of the focus neighborhoods, often combining these walk-arounds with business owner interviews. 

Another aspect of the study that was unique was a focus group of student entrepreneurs. 

“Reaching the next generation of businesses is crucial to long-term engagement with local Minority and Women Owned Business Enterprises and to contributing to closing the racial wealth gap. Younger generations bring new ideas and inspirations, and at the same time they face new sets of challenges that they are uniquely positioned to identify and address,” Susi told NYN Media. “Many students we spoke to felt a strong allegiance to their community and mentioned a wish to ‘give back’ to the place where they grew up. Their ideas often stemmed from the needs of the communities around them. They, like those already in business, expressed a frustration with the impact of gentrification and concerns about discrimination when attempting to secure capital for their ventures.” 

Veronica Marlow, a professor at the Brooklyn College Koppelman School of Business, made it possible for Brooklyn Communities Collaborative to conduct three focus groups with student entrepreneurs in September 2022. 

“It is our hope that this research, report and the capacity-building activities surrounding it will bring more attention and innovation to the issues, more opportunities and access to capital for business owners and entrepreneurs, and, if we stay at it long-enough, will bring more generative dynamics to the policies, practices and culture around health, wealth and wellbeing in Brooklyn,” Susi said. “We see part of our work as building a community of inquiry – to use a favorite phrase of Roger Green, one of our founding members – and are working hard to develop effective ways of sharing what we’re learning so that we can also serve as a model to other communities where people want better outcomes in health and all of the factors that affect us most.”

Another study conducted last year was based on participatory action research (social inquiry based on the principle that those most impacted by research should take the lead in framing the research process) and focused on engaging Black business owners and their success, challenges, and potential to become suppliers and contractors with the healthcare anchor members of the collaborative. 

In these types of reviews, participants help to design the studies, frame questions, collect data and strategize about how to act on findings. Brooklyn Communities Collaborative researchers recognized that small business profitability, wealth building opportunities, and retail corridor vitality are just important. 

“Participatory action research is directly actionable. Its recommendations are more likely to be embraced and sustained because they are generated by the people to whom they matter most. Participatory action research is a galvanizing force, too. It informs, builds connections, and, when it is most successful, creates the kind of momentum and know-how that is really needed to make the kind of changes that materially improve health, wealth and wellbeing,” Susi told NYN Media. 

Brooklyn Communities Collaborative is a nonprofit organization that works with local institutions and stakeholders to address long standing health inequities in Brooklyn. 

Founded in 2019, Brooklyn Communities Collaborative works towards the goal of leveraging the financial power of anchor institutions and community resources in order to address the economic factors that improve the social determinants of health. They harness community voices to identify pressing obstacles and incubate innovative solutions in neighborhoods where health disparities are more evident. One of the critical elements of health and wellbeing in communities is the generation and retention of financial wealth by local residents, not just as business owners but also as employees of local enterprises. 

Brooklyn Communities Collaborate has worked to support the expansion and nurturing of Black owned small businesses. 

“As soon as we finished the interviews for the research we knew we needed to regularly bring together the Brooklyn organizations that have long been supporting local businesses and entrepreneurs. In January 2023 we launched the Brooklyn Health Enterprise Advisory Council, a group of local business leaders that meets regularly with us and our research team to share expertise, provide mentorship and bridge the gap to support inclusive procurement practices,” Susi told NYN Media. “Last year, we secured commitments to increase Minority and Women Business Enterprise spending tenfold from two major Brooklyn health systems – Maimonides Health and One Brooklyn Health – and created a Minority and Women-Owned Business Enterprise Directory available to partner health systems. Right now we are preparing a guide to doing business with hospitals and other large institutions, especially in the areas of food and construction/maintenance.”