By Kevin Haas
Rock River Current
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ROCKFORD — Sharde Calloway turned misfortune into opportunity.
When the former financial analyst lost her job at a local hospital during the cutbacks caused by the pandemic, she began building the brand of Hello Beauti, a women’s fashion and skin care company that has now operated for more than two and a half years.
“I loved what I was doing before, but this is something that’s always been my passion — being a business owner,” Calloway said.
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The Rockford woman built her company handling nearly every role of the business. She curated the clothing she sells, hand made the natural body butters on her shelves and she poured her personal savings into financing Hello Beauti’s startup costs.
Her entrepreneurial efforts mirror many small business owners who formed companies in the post-pandemic startup surge. It is also emblematic of a first-of-its-kind survey that sought to measure the state of Black-owned businesses in Illinois.
That survey, conducted by the Illinois Department of Commerce and Economic Opportunity’s Office of Minority Economic Empowerment, found that about 66% of Black-owned business are solo entrepreneurs who, like Calloway, handle all aspects of the business. It also found that 71% relied on their personal savings to form their company.
“Black entrepreneurs, as we can see, tend to be fighting alone,” Matthew Simpson said during a presentation on the survey’s findings in Champaign this summer. “I’m doing sales. I’m chasing down inventory. I’m trying to do my accounts receivable, making sure people pay my invoices. I’ve got to do customer service. I’m trying to think about a new promotion.”
Simpson is a Rockford native serving as the African American business development manager for the state’s Office of Minority Economic Empowerment. He’s been presenting the findings of the survey across the state this year as a means to showcase how supporting Black entrepreneurs can be good for the economy as a whole.
The study, in part, points to a need for education about how to access startup capital that could help Black business owners accelerate their growth. The survey included responses from 1,355 Black-owned businesses. There are an estimated 141,000 in the state.
“It’s not about charity. This data is not about handouts. It’s really data from a community that’s fighting for its life every day,” Simpson said. “What we can do is look at the information and see how much opportunity there is to grow the economy by supporting and ensuring that Black businesses are on strong footing.”
The study also showed that most Black entrepreneurs say they were inspired to start their business to solve an issue or bring needed resources to their community, as well as earn a living.
Calloway attests to that with her business.
“This could definitely help other people feel beautiful, help other people who might not know what to wear or be looking for something different,” Calloway said of Hello Beauti, which is inside the East Wind Business Complex, 129 S. Phelps Ave. “I definitely just wanted to spread that to other people.”
Maurice Jermon, 33, said he and his business partner Clydale Hilson similarly said they started their business with the community in mind. They started The Hub, 522 Seventh St., which an entertainment venue and art gallery that aims to reinvigorate Midtown’s cultural scene.
“I wanted to help my community and help those around me and grow,” Jermon said, “and potentially not only have a Hub on Seventh Street but have one downtown and then have one in Aurora, and Chicago and Tokyo and New York, etc.
“I’m just starting from the ground up.”
About 11% of all businesses in Illinois are Black-owned, but just about 2% of employer firms are owned by Black residents, according to the study. Black people make up roughly 14% of the state’s population.
There are similar numbers nationwide, with about 2% of the nation’s 5.7 million employer businesses being Black-owned, according to a 2019 study by the Brookings Institute. That study concluded that supporting Black-owned business could grow the nation’s economy overall.
“You can grow your economy by supporting these entrepreneurs who want to solve problems, who want to create jobs, who want to extend services,” Simpson said.
By the numbers | Illinois Black business survey
Here’s a look at some of the key data points from the first Illinois Black business survey, which was released in February. Findings from the report have been detailed at events around the state all summer.
66% are microenterprises and solo entrepreneurs who reported no parttime or full-time employees.
53% are home based
71% said personal savings was the primary source of startup income
60% run small businesses earning $50,000 or less
Read the full survey here
Jamar Luster of Rockford started his business from home with just a few hundred dollars and a blender.
After he was laid off from his manufacturing job in 2020, he started making healthy juices from home and marketing his products through Facebook.
“It was just a dollar and a dream,” Luster said. “All of that money I was making I put that into starting my business, buying my first equipment. … I’ve never had real funding.”
Luster, 36, opened Ripe Life Juice Co. in downtown Rockford in 2021, and now he’s preparing to move the business into the former Rockford Roasting Co. building near North Main and Mulberry streets.
“When it comes to Black-owned business, it’s flourishing, but I still feel like our group as a whole needs more education as to how to operate or move within the business world in the most effective way,” Luster said.
In the survey, about 33% of respondents said they had difficulty getting financing from banks. Some used personal credit cards to finance their startup costs.
Luster said part of the issue is that many Black business owners have a feeling, whether it’s justified or not, that they’re not going to be approved for funding. “You feel defeated a lot times before you try,” he said.
“We already have this feeling that we won’t be allowed or accepted into something, and we carry that in the group as a whole,” Luster said. “A lot of times that, too, that’s what even stops us from pursuing the knowledge of what’s available funding wise.”
The funding, in many instances, is available, Simpson said. “The connections are not.”
That leaves Black business owners starting with their personal savings, which is on average about 13% of that of white families, according to a Federal Reserve System survey. That survey showed that Black median wealth is $24,100 compared to $188,200 for white families.
“Firms which have higher initial startup capital tend to earn higher revenues,” Simpson said. “The old adage I know to be true is that it takes money to make money. … If you start out with more money, you can make more money as you operate.
“This means as a community, we need to find ways to help Black business capitalize properly on the front end. Not with credit cards, and not trying to tap that $24,000 wealth that they have.”
Francisca French, economic development diversity and procurement coordinator for the city of Rockford, said the access to startup capital is often the missing piece for all small businesses, not only for Black entrepreneurs.
Helping Black-owned businesses understand how to access capital is one of the reasons Think Big exists. The small business development center was founded by Sheila Hill and Duntai Mathews to help women and minority entrepreneurs strengthen their business. The nonprofit has a deal with the city to renovate and create a center at 1311 N. Main St. on the North End.
“To get that money, the business has to be set up and structured to be able to cash flow to be able to take advantage of those funds,” Mathews said. “That’s our goal to make sure that business is prepared and properly ready to take on that task of getting funded.”
There have been 162 graduates of Think Big’s School of Business, including Calloway, and 96 have gone on to officially register their business or get an Employer Identification Number.
Hill said that, much like the study showed, many of their participants were reliant on personal savings.
“Since we started the school of business, we have found that individuals have taken money from their 401K, from their children’s college fund, taken out second mortgages on their homes,” Hill said. “They have this drive and this passion, and it’s by all means necessary I’m going to start this business and this dream, and they hope to create generational wealth for their children.”
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The study illustrates both the perseverance of Black entrepreneurs and the risk they often take on. Eight out of 10 fail within the first 18 months.
“This is not a woe-is-me message,” Simpson said. “These are people who are fighting for their lives every day, and with the right collaboration the community can catapult to new levels.”
Beverly Thompson said she sees many entrepreneurs like herself who started with a dream and a few dollars. Thompson founded BT Goodies, Crafts and More as a post-retirement career after working at Mondelez for 34 years.
“We always see each other at all the vendor shows,” she said. “We share the struggle of trying to maintain and doing it on our own.”
Thompson sells a variety of peanut brittles and pound cakes, as well as various seasonal crafts. All the recipes are her own or from her mother and grandmother.
She began the business a couple years back and mostly operates from home, as well as finding space at vendor shows around the area.
“It is very hard for Black entrepreneurs to make it. The struggle is real,” Thompson said. “But you have to take that risk.”