Jessica Bergeron, Senior Vice President of Operation Hope, joins Dr. Vanessa Weaver, CEO of Alignment Strategies, to speak about the status of Black and Brown-owned businesses in the wake of the COVID-19 pandemic. She also talks about how Operation Hope’s One Million Black Businesses Initiative has been helping Black and Brown businesses bounce back and thrive during the pandemic. The following is an edited excerpt of their conversation.
Weaver: Today, we’re talking about the challenges and opportunities facing Black-owned businesses. There are more than two million Black-owned businesses in the United States. They generate 150 billion, which accounts for less than 1% of the country’s revenue generated by other businesses. As we think about the impact of COVID, particularly on Black and Brown businesses, we see that the data has consistently reported that over 40% of Black businesses were wiped out because of COVID. For those left standing, many of them need significant resources to really continue to repair the loss they had in their businesses and then grow them in meaningful ways.
Bergeron: Black-owned businesses are such an amazing and important part of the economy, but we haven’t had the opportunity to build infrastructure for Black businesses, which is why they were so devastated by COVID.
Weaver: What do you mean that they didn’t have the infrastructure?
Bergeron: Infrastructure for business owners is several things that allow businesses to thrive and be resilient. Infrastructure can be anything from where to go for things like the paycheck protection program (PPP) loan that the federal government gave out. Many White-owned businesses already had relationships with banks, and a lot of the banks were the ones who distributed these loans.
The second example of infrastructure is things like generational wealth, having 50,000 or more startup costs to start a business, and then the third one I want to mention is mentorship. Being able to have people in your environment that can walk you through the process. Black-owned businesses are really starting behind the start line, that’s the reason why they were so negatively affected by COVID, but also the reason why in general, their revenue is significantly lower than other business owners.
Weaver: Even compared to other minority business owners like Latino and Asians?
Bergeron: Exactly. Black-owned businesses are significantly lower in revenue, they’re also typically sole proprietors. 96% of Black-owned businesses are sole proprietors, and they bring in less than $100,000 in revenue a year. Why is that significant that they’re sole proprietors? A Black business owner is more likely to hire Black employees, that means that we’re not only creating generational wealth for our families, but we’re also creating jobs in our communities. So not having employees significantly impacts communities.
Weaver: You’re Senior Vice President of Operation Hope. Can you tell me a little bit about what you do, and how does that support the vision and mission of Operation Hope?
Bergeron: We were started founded and by our current CEO, Chairman, John Hope Bryant. Operation Hope was started, 29 years ago, after the LA riots, tackling social justice from an economic lens, thinking about financial empowerment and financial education for folks around homeownership, small business, business development, credit, money management, and disaster recovery. We provide financial literacy education and empowerment services to customers, clients at no charge.
Weaver: Free to bring up credit scores?
Bergeron: That’s right free to bring up credit scores, reduce debt, increase savings, increase disaster preparedness, we’ve partnered with FEMA and other government organizations to increase disaster preparedness. One in three people in the United States live in a county that is affected by natural disasters. Disaster preparedness financially is very important. When COVID hit, as you mentioned, 40% of our businesses were negatively affected by COVID. Last year, our CEO started the One Million Black Businesses Initiative. One million is the number of businesses that were negatively affected by COVID. This is a ten-year initiative, and we immediately started looking for partners. This is something that’s going to take a community, it’s going to take a village for us to build.
Weaver: I had the opportunity to meet you as part of the Take On Race Initiative, which the Procter and Gamble company is sponsoring, with partners like Operation Hope, PNC Bank, BMO Bank, and the US Chamber of Commerce. How do we define, declare, and demonstrate the role that corporate America must play in eradicating various forms of racial bias? How can people access one and be one of those one million Black businesses in your portfolio?
Bergeron: It is as simple as signing up for a potential client. They can enroll operationhope.org/1mbb follow the prompts and sign up, and the only criteria to participate is to identify as Black or Brown, and be able to sign up for the program, and we have lots of additional partner services.
Weaver: For example?
Bergeron: We have partnered with Shopify, one of our earliest partners that really said, you know, we would like to be a part of this One Million Black Businesses Initiative. Shopify has a Black entrepreneurship space called Build Black, and they’re committed to making sure that they’re part of this economy.
We have partnered with Intuit and QuickBooks. They provided a QuickBooks subscription for one year for all our participants. Most banks require about two years’ worth of automated accounting to even apply for a business loan.
Weaver: Is there any kind of emergency support or emergency program that you or your partners provide those businesses that could recover if they had a little financial support?
Bergeron: We are a resource for funding support, we are second responders. First responders after disaster are like American Red Cross. They help after a disaster with recovery checks. Operation Hope comes in a few months later and helps people identify the areas they need to spend their money and how they set up a bank account.
Weaver: What are the most common forms of Black business?
Bergeron: As I mentioned, 96% are sole proprietors, typically owned by Black women, and they are also mostly service industries. We need to get into the e-commerce space, manufacturing, clean energy, healthy food areas, technology, health care. When we think about long-term building generational wealth into our communities, all these areas are important.
Weaver: Do you have any example of a Black business that benefited?
Bergeron: A young woman who owned a small residential cleaning service business, wanted to get into commercial business, and commercial cleaning. Those kinds of contracts are hard to get, you must bid on those contracts. She worked with an Operation Hope business coach, and she built up her credit, she got a small business loan. She thought to herself, oh my gosh, I’m not ready for this, I can’t do this. And her coach said, “We’ve been preparing for this whole year. “You’ve got this.” She bid on the contract and won. Sometimes, the mindset prevents us from advancing, which is a big advantage of having someone who believes in you.
Weaver: You’re saying we can limit our own selves from being successful? Where is that coming from?
Bergeron: I think that all the challenges that Black businesses face, access to capital, discriminatory practices in lending, not having a startup, not having mentors, can wear a person down when they keep trying and trying and trying. The key is having somebody there who can say to them, “You got this.”
“I never dreamed of being a business owner until much later in life because I thought that was just something that rich people did. I never envisioned myself as being a business owner, and that’s where representation matters.
Weaver: I have the pleasure of working and being a partner with you looking at how do we drive more wealth creation as part of the Take On Race initiative. What does that mean, and what are we trying to do in terms of changing this dynamic?
Bergeron: The issue that we identified as a committee and a coalition was to target supplier diversity and supplier diversity is a relatively complex problem. Access to capital to grow businesses, growth and automation, education around bidding processes and procurement services are contributing to this issue.
Weaver: How can corporate America step in, and make a difference, if somebody is saying, “I want to be a business owner, “I want to look at how I can grow my business.” What would be the one thing you would tell them to do?
Bergeron: Believe in yourself and believe it can happen. Be open to the idea that you can be the next Bill Gates, be open to the idea that you can create the next app, or the next product that is just going to change the way that people live their life. And our job is to make sure you have the resources to grow that idea.
For more information visit: operationhope.org