Barriers to growth for Black entrepreneurs can often be subtle, local biz owners say

Black-owned businesses in Canada tend to be smaller and perform less well financially than businesses owned by white people or by other racialized groups, according to a recent report from Statistics Canada. 

While this is often because Black entrepreneurs have trouble accessing financing, research suggests, some of Ottawa’s Black business owners say the reasons behind the recent findings can be more subtle.

Jidé Afolabi, owner and president of Afolabi Law in Ottawa, says Black business owners in the city would benefit from “full-frontal tackling” of racial prejudices in the business community.

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Born in Zambia and raised in Nigeria, Afolabi came to Ottawa at age 18 and was called to the Ontario bar in 2000. He worked as a public servant until the federal civil service was reduced under the Harper government. Afolabi left the government voluntarily to pursue his dream of opening his own law firm, using the financial compensation package he received to fund it.

While he says he has seen some “explicit” racism as a Black business owner from some clients, he acknowledges that if a client decided not to work with his firm due to a racial prejudice, he wouldn’t even be aware.

That was not the case when Afolabi ran for Ottawa city council some years ago. The racism he experienced then was harsh in comparison to his experience as a business owner, he says. On a corner that displayed four or five campaign signs, Afolabi says his would be removed or defaced and the others untouched.

I think, because of that experience, I’m aware that there is a challenge there and an element of bias, but the way you face it is different,” he explained. “In business, they wouldn’t show up and you just wouldn’t know.”

Afolabi said there could be better support for Black entrepreneurs. “I would like to see more full-frontal tackling of issues and finding ways to welcome new interns into the business community because in business you can end up very isolated,” he said. “There could be breakouts for specific challenges people face based on race, gender or sexual orientation.”

Medjine and Medjaly Hyppolite are co-owners of Ottawa-based Frizé Frizé, a hair product boutique specializing in coily, curly and wavy textures. The Ottawa-born twin sisters, 45, founded Frizé Frizé using their own money after embracing their natural hair texture and struggling to find products for people who are underrepresented in the industry.

“We noticed there weren’t any services in our community for our hair texture,” Medjine said. “Medjaly and I had to know how to do our hair, but we also didn’t find what we wanted for products, so we decided to jump into this business and help in that area.”

Their products are for all types of hair textures and they can supply any salon, but Medjine says the sisters have seen “resistance from people who don’t look like us.”

“Although we know we can help them, they look at us colour-first and don’t think we can help them,” she said. “So with some clients, we have a barrier. Once they know we can help, it’s fine, but at first glance it’s, ‘Oh, you can’t help me because we don’t have the same hair.’”

Getting the word out about the quality of their products has been tricky. “Business people sometimes don’t think (our products) will be well put together, they don’t expect it to look good or be presentable or be organized,” she said. “When they see it, they realize it’s handcrafted and good quality, but there’s some prejudice.”

The recent Statistics Canada report analyzed data from several sources up to 2018 and found that the proportion of Black business owners among all business owners has been increasing. At the same time, the numbers showed that Black-owned businesses struggle more on average and have lower profit margins. Black business owners make lower incomes on average than business owners who are white or from other racialized groups, the report found.

A 2021 report by the Canadian Black Chamber of Commerce in partnership with the Business Development Bank of Canada found that Black business owners are often not comfortable applying for funding, or unable to find funding that would fit their business. Some respondents described encountering racial or gender discrimination when they dealt with banks.

Also in 2021, a survey commissioned by the African Canadian Senate Group found that more than three-quarters of Black entrepreneurs said their race makes it harder for them to succeed. They faced significant barriers to funding or financing, the report found, and many had low trust in banks and lacked access to support and advice.

Earlier this month, the federal government announced an investment of more than $1.3 million for the Federation of Black Canadians to “enhance its services to support and mentor more Black youth and young adult entrepreneurs.”

With files from the Canadian Press

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