LOUISVILLE, Ky. (AP) - It wasn’t easy for Nichelle Thurston to save $20,000.
She was working as a front desk clerk at the Louisville Water Co., raising four kids with her husband and attending nursing school. But she was also saving money, and diligently so. After a few years, she had enough to buy a food truck.
She created her own website, paid a local artist to design a logo, and, with three employees, began operation as The Seafood Lady.
It took off. Within six months, she had a brick-and-mortar restaurant, and today, she and her husband, Luke, operate three establishments.
“I took everything that I had, and put it into my business, and thank God that it became a successful business. Had it not, I would’ve been set back, because I took all of my personal resources to build a business,” she said.
As a Black business owner in Louisville, Thurston is among a small group - one that has dwindled over the years.
In 1969, Black people made up 13.3% of Jefferson County’s population, but owned 4.6% of the county’s businesses. Today, although the Black population has grown - to 22.4% - its ownership of businesses has shrunk to 2.4%.
That mark places the city last out of 16 peer cities, according to Greater Louisville Inc. Nationally, based on 2012 census data, 9.4% of businesses are Black-owned, while Black people made up 13.1% of the population age 18 and over.
One of the key reasons for the disparity is the racial wealth gap.
Not all white people have wealth, and not all Black people lack it. However, because of historical factors - including the ability to accumulate wealth for centuries - white people, generally, have significantly more wealth in America than their Black peers. Based on 2016 national data, the median white family has more than 10 times as much wealth as the median Black family, a disparity that is even larger than it was in 1968.
To overcome that disparity and create a stronger, more equitable economy, leaders say the city needs to support Black companies through business accelerators, technical assistance and significant financial support.
“Black people can be very creative and innovative with ideas and skills and abilities, but don’t have the capital to venture with,” Louisville Central Community Centers President Kevin Fields said, “and if they do, it’s going to be more to sustain livelihood than to be a risk-taker and try a business venture.”
‘STARTING BEHIND THE STARTING LINE’
Aaron Barbour, of Dasha Barbour’s Southern Bistro, said when he and his wife, Tumeka Bethel, began their restaurant in 2013, they weren’t able to get any grants, and when Barbour sought a loan, banks often wanted collateral. They weren’t impressed by what he could offer: “I had a car,” he said, “but it wasn’t even worth $1,000.”
Like Thurston, all of their money to start the business came from savings.
They received no financial support from their family. Barbour’s father, who is 73 years old, grew up in rural Kentucky, where he was not permitted to eat inside restaurants due to segregation, and Bethel comes from a low-income background in Louisville’s West End.
Both Barbour and Bethel, who are Black, are 40 years old, and both have used the bulk of their 401(k)s to keep their business afloat.
“We’re starting behind the starting line. That makes it hard to get your foot in the door to get the funding that we need because of the role that racism has played. We’re basically starting 200 years behind the competition,” Barbour said. “It’s not impossible to catch up, but it’s definitely catching up when others have a head start.”
In “A Path Forward for Louisville,” a petition developed to outline actions and solutions the city can take to support the Black community, leaders call for a $50 million Black Community Fund, part of which would go to financially support Black-owned small businesses - both existing and new ones.
The document states Black people have the ideas to start businesses, “we simply lack the funding needed to build businesses that respond to the economy that we participate in.”
While many white people have had the opportunity to accumulate generational wealth for decades and even centuries, many Black people have not, due to slavery and Jim Crow laws that have existed for the bulk of American history. Funding for Black businesses would come from the city, corporations and philanthropy and be essential in the search for equity, said A Path Forward co-author Sadiqa Reynolds, president and CEO of the Louisville Urban League.
SOLUTIONS TO A LONG-STANDING ISSUE
Fields called lack of wealth the “biggest barrier” of Black business ownership, and he also pointed to varied customer bases. Often, he said, white people patronize businesses owned by white people, and Black people patronize those owned by Black people.
Fields said for Black businesses to achieve sustainable success, they typically need to attract a wide customer base.
“From an economic standpoint, if Black business owners can’t attract white customers and only depend on Black customers - primarily, Black customers don’t have wealth and don’t have disposable income - then Black businesses, what happens?” he said. “They struggle. They die on the vine, even when they start out great with an idea.”
Fields pointed to the fact that there used to be considerably more Black businesses in Louisville, especially concentrated in the Old Walnut Street business district. From the 19th century until the mid-20th century, it was a thriving business district, totaling more than 150 Black-owned businesses, according to a University of Louisville archive.
But suburbanization and desegregation - “Integrated out of business?” a Courier Journal headline read in 1963 - changed the business landscape, and urban renewal, a federal program that tore down buildings, destroyed the vibrant business community.
Now, “there are not a lot of role models for Black businesses that are visible, whereas we used to have blocks where Black businesses thrived,” Fields said.
Black people are also less likely than white peers to have access to a network of people with experience in the field of entrepreneurship. Reynolds pointed to the importance of technical assistance from business owners and leaders who can lend advice or connections.
“There are a lot of things that people with privilege get just through their relationships that people who have not been exposed, who have not had those friends, those family members, they just don’t get,” Reynolds said.
The city is taking some measures to increase Black business ownership, which would, in turn, create more role models for Black entrepreneurs.
Louisville Mayor Greg Fischer recently signed an executive order creating a task force focused on supporting underrepresented business owners.
And Greater Louisville Inc. President and CEO Sarah Davasher-Wisdom highlighted GLI’s new Minority Business Accelerator as a way to connect minority-owned businesses with people who can help with, among other things, marketing, legal coaching and accounting.
“The accelerator is bringing in some of our contacts who are willing to offer pro bono, discounted or contingency fee-based services to enable those small businesses that are trying to grow those discounts on the big-ticket items that typically make it difficult to start a business,” Davasher-Wisdom said.
FOUNDATIONS AND FUNDING
Thurston, the owner of Seafood Lady, pointed to other ways Black business ownership can be increased. It starts with education, she said.
“If you’ve got a great foundation then nine times out of 10, you turn into something great. But if you have a rocky foundation and you’re constantly rebuilding, you’re constantly reinforcing your foundation, and so it’s a little bit harder, and it takes a little bit longer to get where someone is that started out with a perfect foundation,” she said.
She also added there is a level of intimidation for many Black people that prevents them from pursuing business opportunities. Not because of a fear of failure, necessarily, but “because of who you are, because of where you come from, because of how you look.”
Well-allocated funding could alleviate that, she said.
“There needs to be an influx of funding to Black business owners, so they can afford the opportunities to open business for themselves. I also think that African Americans need to not be intimidated by the business industry, and drop the fear and move forward,” Thurston said.
Thurston couldn’t believe the way her business took off five years ago, ultimately landing her on the Food Network’s “Diners, Drive-Ins and Dives.”
Last month, Thurston spoke via Zoom with fifth graders from Coleridge-Taylor Elementary School, answering questions about her business and encouraging the students, who were from many different racial backgrounds, to not let barriers hold them back from business ownership.
“They said they wanted to be cooks and chefs and stuff like that,” she said.
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