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African American-owned businesses growing in the Valley with community support

August is Black Business Month, and it's a chance to recognize black-owned businesses across America, especially right here in Phoenix.

PHOENIX — August is Black Business Month. It's a chance to recognize black-owned businesses across America. 

While African Americans are the fastest growing demographic in Arizona, a new report found that black entrepreneurs face even more challenges here in the Valley when starting a business. However, new groups and resources are ready to help change the numbers.

At the Straw and Wool men's specialty hat store, "where cooler heads prevail," business is on fire.

"We went on a search to find products that men would like and hats were one of the ones that stood out," Owner Henry Dickerson said.

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That store, along with several other black-owned businesses, call Roosevelt Row in downtown Phoenix home.

"Stardust and Sage, and Brownstone Spa and Grassrootz Bookstore... There's household names who have come through the marketplace and are real institutions," said Ali Nervis, one of the founders of the Archwood Exchange.

The program initially began as a business for Nervis in 2016, as a neighborhood store that he billed as the “Black Walgreens.” 

But when resources became tight and limited, he decided to rethink the idea into something he said would be more advantageous to everyone.  

Now, the exchange is a neighborhood marketplace where black and brown businesses owners have a platform to showcase and sell their products, and can find mentoring and guidance.

"We know the challenges it's access to capital. It's getting support from abroad," said Nervis.

Straw and Wool is one of the Archwood Exchange's success stories.

"This is actually the second business that I've started," Dickerson explained. "The first I went at it alone and by the time I realized that I needed help, I was so deep into it... It was successful, but I couldn't maintain it."

But for many black entrepreneurs, the race to the finish line is plagued with hurdles and tough lessons.

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A report on the state of black businesses, authored by the State of Black Arizona and the Greater Phoenix Economic Council, found that African Americans have the lowest rate of entrepreneurship of any race in America.

Black and Hispanic entrepreneurs often start businesses with less than $10,000 in capital; one of the biggest barriers to entry.

Black businesses account for just 1% of all businesses in Phoenix, but the potential is there to grow to more than 4,945 black-owned businesses and create over 15,133 new jobs in the metro.

While acknowledging the challenges, the report also lists the programs currently available to help with access to capital, and recommendations on programs nationwide that could be brought to Arizona. 

From the research, there’s now a focus on developing research to study  Arizona's black business ecosystem.

Officials are now working on creating a comprehensive site that provides useful information, and insight for businesses, investors, community organizations, and government entities. 

The City of Tempe is especially looking to provide more help to black business owners.

After the 2021 report did not list a single black manufacturer, the city began the process of creating its own program to solve the challenges. 

“The two main challenges manufacturers often face are a lack of space and capital,” said Maria Laughner, Deputy Economic Development Director for the City of Tempe. 

With $800,000 in funding the city launched a program aimed at providing both. 

So far, the city said it has received five proposals from businesses owners. All five are set to receive contracts from the city through the program. 

"For Arizona to thrive, attract industries and be a place where people will want to live work and raise their families, we cannot afford to financially or morally leave anyone out," said Teniqua Broughton, Executive Director of The State of Black Arizona. 

As more and more black business owners call Arizona home, Henry Dickerson said there's space for several ideas.

"It's a community of people that are figuring it out, and it's a community that is growing," Dickerson said. 

"You may have the best idea, the best vision, the best plan but if you don't have the resources to sustain it, it will be impossible to sustain it," said Nervis.

Organizations like the Archwood exchange said they're ready to help others turn business plans into reality.

You can read more details about the State Of Black Business report here.

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