Black entrepreneurs struggle to grow and profit from their businesses | Black History Month 2023

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Black entrepreneurs struggle to grow and profit from their businesses | Black History Month 2023

Access to financing remains a major obstacle, according to Statistics Canada.

The Kids Cuisine Santé catering service in Toronto, founded by a chef of Cameroonian origin, has about fifteen full-time employees, mostly immigrants.

Although businesses owned by Black Canadians have increased significantly in recent years, they are still struggling to reach their full potential, according to a study by Statistics Canada.

These businesses are typically smaller and less profitable than those run by white or other racialized people.

About 91% of black-owned companies in the country have fewer than five employees , compared to 83% for those of white entrepreneurs.

This discrepancy comes as no surprise to Calgary entrepreneur Sydonne Warren, who falls into this micro-enterprise bracket. She works on her own account, without employees, offering painting classes during which alcoholic beverages are served.

Entrepreneur Sydonne Warren offers painting lessons with alcoholic beverages in Calgary.

I never took any training, I didn't know other business people when I got started, so I had to learn from my mistakes, says the artist.

Black-owned businesses are also less profitable, in general, according to the study . These have a profit margin of 8.5%, which is almost half that of white owners (15%).

Even entrepreneurs from other racialized groups have an average profit margin of 10%, higher than those of Black people in business.

There is also a gap on the side of their income: black business owners, usually immigrants, pocket lower annual incomes compared to their white or other racialized counterparts.

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Guy Dongué owns a catering business in Toronto. Its small team prepares around 400 meals every day for French-speaking students in a dozen schools in the region.

If you want to cook 5,000 to 10,000 per day in three or four years, we will have to integrate the English-speaking world, says the chef, who is struggling to expand his clientele.

“Very often the doors are closed. We're just going to settle for the minimum. »

— Guy Dongué, owner of the Kids Cuisine Santé catering service

According to him, one must dare to take risks, despite obstacles and setbacks.

Guy Dongué is the owner of the Kids Cuisine Santé catering service, which prepares hot meals every day for a few hundred students in the Toronto area.

The first restaurant he opened in north Toronto more than a decade ago was a failure, he says. Other business ventures also failed, despite him.

In the beginning, I learned a lot on the job. Subsequently, I had mentors, organizations that mentored me, advised me and directed me to different sources of funding, he says.

The Statistics Canada study finds that immigrants may not be aware of the financing and support options available to them, which would limit the performance and growth of their businesses.

Toronto entrepreneur Lola Adeyemi says it was difficult for her at first to find investors and sell her idea to them, without being able to rely on a network of contacts.

“It's a huge problem because you don't see others in your midst who have been successful, so you don't think it's possible.

— Lola Adeyemi, owner of It's Souper

However, she was able to obtain a $72,000 grant for black entrepreneurs, which allowed her to to improve its packaging and increase its production. Now, his soups and sauces with African flavors are sold in Sobeys and Whole Foods stores.

Lola Adeyemi founded her company It's Souper in 2018. It offers a range of sauces and soups inspired by Nigerian recipes.

Last year, she also appeared on CBC's Dragon's Den, where she concluded a funding agreement.

What I tell a lot of people in the black community is to seek help elsewhere, she said.

Sabine Soumaré, Executive Director of Knowledge Portal for Women Entrepreneurs, highlights that white businessmen still have a greater ease in getting their hands on various sources of funding.

“That access to finance allows them to have employees, access to capital, and have a lot more income to grow their business.

— Sabine Soumaré, Executive Director of the Women Entrepreneurship Knowledge Portal

Ms. Soumaré notes, however, that the data analyzed dates back to 2018 and that grants for entrepreneurs blacks have since been created. She nevertheless welcomes the initiative of the federal agency which dissected these statistics.

For years, there was simply no data, she says.

Sabine Soumaré, Executive Director of the Knowledge Portal for Women in Entrepreneurship, Metropolitan University of Toronto

Guy Dongué, for his part, hopes to inspire young black people to get started in business and mentor them.

I just want to encourage people in my community to get much more involved in entrepreneurship, says the Toronto-born chef Cameroonian.

The stronger you are economically, the more you position yourself in society.

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