Black-owned businesses weather yo-yoing support
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Black-owned businesses during persistently complicated times.

I'm David Brancaccio in Los Angeles. Today is Juneteenth. It commemorates the formal emancipation of enslaved people in Texas. We've been examining persistent wealth gaps by race now to consumers and Black-owned businesses. Following the murder of George Floyd, the social justice movement it accelerated led to a wave of support for Black-owned businesses from consumers, banks and big corporations.

But that support is more muted now. Marketplace's Justin Ho talked with Black small business owners about navigating these ebbs and flows. Around this time five years ago, Frankisha Watkins says foot traffic was booming at the beauty supply store she runs in the Dallas area. I remember working so hard, I actually walked a hole in one of my shoes, like in the toe area.

Watkins says Be Polished Beauty Supply was getting a lot of traffic from social media posts. People tagging the company as part of a nationwide effort to support Black-owned businesses. Sales were so good, Watkins opened a second location. We were getting so many new customers, people who didn't necessarily know that we were there. I honestly thought that that would stay, that support would stay with us, and it did not.

Watkins says for her, the Shop Black movement lasted about five months or so. She ended up having to close one of her locations. Watkins calls this the yo-yo effect. One month you're doing really good and then the next month people no longer support you. Like you cannot run, operate a business like that.

You can't because a business owner has to be able to make reliable forecasts to make purchases and hiring decisions based on the cash flow they expect. So the yo-yo effect has ramifications. Like late vendor payments, late contractor payments. Once in February and once in March, we miss payroll.

That's Sherar Duvall. He runs OTR Media Group, a company in Columbia, South Carolina, that films and produces documentaries and other video content. His clients include private companies and local governments. Duvall says a lot of them were eager to support Black-owned businesses for most of the last five years. His company grew. He hired more staff and got a new office downtown. Then came this year.

clients that we have that were looking to partner with a minority-owned business or were mandated to look or deal with minority-owned businesses, all stops. Duvall says going forward, he's going to be more cautious when someone comes along saying they want to partner with a Black-owned business. I think there's a lot of businesses like mine that are going to tread lightly when we get those phone calls and receive those emails or see those opportunities just to protect ourselves.

Now that Target, Walmart and other big companies are distancing themselves from DEI initiatives, there's a new wave of support for Black-owned businesses, says Brandilyn Green. She advises businesses on how to market themselves on social media. People are saying, I don't want to shop at Target, but I will support you in your website. I will support you as a Black-owned brand because these other major corporations have turned their back on you. Brandilyn Green.

Green says she's advising her clients to do whatever they can to keep those customers, offer discounts in exchange for contact information, push customers to sign up for email lists. Green says she's also advising business owners to market themselves, says industry experts.

When you consistently show up as the authority or, you know, the expert in that space, people will trust you even when there is no big viral issue going on. The goal, Green says, is to keep sales coming in when waxing support inevitably wanes. I'm Justin Ho for Marketplace. Markets are closed today, Juneteenth.

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Major films, streaming and TV studios are doing more production outside Los Angeles. Georgia, New York, not to mention Western Canada. And that's been tough for Hollywood, Hollywood. Some industry people say it feels like when big pieces of the auto industry left Detroit. And local small business owners in Southern California say the decline is hitting their bottom lines. KCRW's Megan Jamerson reports.

Julie Pop is sitting elbow to elbow with other diners at the counter inside Chili John's in Burbank. And she's about to dig into a bowl of spicy, hot, stick-to-your-ribs chili. It's made from a 130-year-old recipe. You know how people really play with chili recipes and you get pumpkin chili and lots of weird stuff? This chili is just real, big chili. It's so good. But even the best chili isn't filling seats.

On this Wednesday, only a dozen customers are here for lunch. A few years ago, it wasn't uncommon for there to be a line out the door, says owner Steve Hager. Burbank runs off the entertainment industry, so as long as the entertainment industry is slow...

All the services are going to be slow. The restaurant has been around since 1946. When Hager took over the business 10 years ago, he knew the success of the place was tied to its location. It's only a few miles from the big Hollywood studios like Warner Brothers and Disney. Walt Disney used to eat here.

And so did all kinds of entertainment workers. But they aren't eating out these days because they often don't know when their next paycheck will come. A report by Otis College of Art and Design found that last year, Hollywood jobs were 25% below their peak, which was in 2022. Even my friend that has a salon a couple doors down, she's slow. Hager is getting doubly hit by the slowdown. He also rents out the restaurant for filming. He used to book about

10 TV shows or films a year, but all location shoots are down by 22% in the greater LA area compared to last year. So far this year, Hager has only booked three productions. We knew we needed to reinvent ourselves because the restaurant was basically just like dying a slow, painful death.

California lawmakers approved a plan in June to beef up the state's film incentive program. But Hager isn't waiting around for that. So he's trying new things like a tap room with cheap beer to keep customers coming back.

Back inside Chili John's, Billy Swanson Jr. is a regular here. He was 13 when he first ate at this restaurant. Now Swanson's a retired teacher. I'm pretty old, but you never get too old for Chili John's Chili. Hager's hoping that regulars like him will keep coming back, so maybe he will be able to stay in business for another 79 years. In Burbank, California, I'm Megan Jamerson for Marketplace.

And you're listening to the Marketplace Morning Report from APM, American Public Media.

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