Thursday, September 3, 2020

The rampant success of #SupportBlackBusiness

To "The unintended consequences of #SupportBlackBusiness" -  Vox, Sept 3, 2020

"Brittney Winbush, founder of the wellness company Alexandra Winbush, had her first $10,000 sales day in June. Rather than purely elated, though, she was anxious. “Will this last?” she wondered."

Every small business owner wonders this.

"afraid to make long-term business decisions based on good faith, as history has shown these moments of reckoning rarely linger."

Long-term decisions are always a risk, especially for small businesses.  This is not at all unique to this moment.

"A reported 41 percent of Black businesses had been shut down in April due to Covid-19."

As Tim would say: compared to what?

Per Forbes, 73,000 businesses have closed due to the pandemic.  The Washington Post says 100,000, and CNBC says up to 7.5 million are at risk.  

So: How does the 41% of Black-owned businesses compare to the overall percentage of businesses closed due to COVID?

Or:  What's the overall percentage of Black-owned businesses overall?  (I wonder if it's around 40% of all businesses.)

Sure, 41% sounds scary.  But scary numbers without any context are meaningless.

(Also, isn't it a truism that two-thirds of all small businesses fail within a few years?  Just sayin'.)

"Black businesses had been denied loans and other buffers the government had put in place while big, mainstream businesses were offered millions."

It is entirely possible this is true, but this isn't evidence.  It's just stated that this is, full stop.

And why, exactly?  Is it because they're Black-owned?  Or are there other reasons?

It also seems almost equally certain that White-, Asian- and publicly-owned businesses have also been denied loans as well.  How many, we don't know.  Maybe the same?  More?  Less?

"The challenges that Black businesses face are more fundamental than cashflow.”

OK, possibly true.  But again, hardly unique to Black-owned businesses, and no evidence to back it up..

"The reality, too, is that many small Black businesses, due to their size, aren’t equipped to handle such surges."

This is true for any business around and about that size.  White, Black, Latino-owned - that makes absolutely no difference whatsoever.

This reminds me of the UPS commercial about the new company that gets too many orders.  Hardly ANY business can even so much as double in capability overnight, much less a 5x to 10x increase.  Again, NOT unique to Black businesses in any sense whatsoever.

"Although such deluges can result in capital and growth, until customers adjust expectations and push for structural reform that enables Black businesses to grow, these calls will always feel inadequate."

Dramatically increased sales IS growth.

“$10,000 is so little to some in the entrepreneurial world, but this money was giving me the capital cushion to hire someone, restock, and just grow,” she says. For Winbush, this was a testament to the disparities that Black entrepreneurs, especially Black women entrepreneurs, often face."

Potentially true.  I would like to think that banks will go where the money is, but according to her, that isn't happening.  I can't say it isn't or it is, and the article again does nothing to inform.  It just says it's true, doesn't even bother to cite a specific example.

If this were true, would it be so difficult to do an article about how Black-owned businesses are being unfairly denied the financial tools they need due to rampant discrimination by angel investors and/or banks?  If it's as widespread as all that, should be pretty easy to do.

"She worried about whether this interest would convert to consistent sales; she noticed that a majority of the people who were creating these lists weren’t even making purchases themselves."

Oh Lord, so what?  Free advertising!

No, seriously.  If you put an ad on the bulletin board at the local sewing club, and heard people talking about it at the coffee shop, you'd be happy, even if most of those people didn't themselves buy.  Buyers are undoubtedly best, but getting the word around is essential to finding those buyers.

“People are posting these Black-owned businesses without even researching to see what they do and what they support. It’s the same list going around. I’m not just a ‘Black-owned business.’ There are a lot of interesting things about me and my business besides my identity,” says Subrina Heyink, of Subrina Heyink Vintage."

Yes, you sell things.

OK, you probably "stand for" things, "believe in" things, or "support" things too.  That's lovely.  

But, your business exists to sell stuff.  By definition.  The rest is just image and window dressing.

"She declined interviews at the time and asked to be taken off lists once she realized that many of the people who were sharing them were doing so mindlessly, in what felt like tokenism."

Coming from a fellow small business owner, that's just idiotic.  As in "You absolutely have to be shitting me" idiotic.  No sane small business owner would EVER turn down free advertising.

"She says that some of the white influencers sharing these lists were part of a racist fashion industry that had previously hurt her business: a former fashion editor, who had once mocked Heyink for taking an activist tone on her platform, had added her to an Instagram list of fashion businesses to follow. This upset Heyink, so she asked for her name and business to be edited out of the Instagram post."

OK, absolutely.  If one wants to stand on principle and decline such advertising, of course they can.  It's a free country, after all, and people can do what they want.  

But that's still a stupid business decision, and it's entirely on you.  YOUR principles cost YOU money - nothing to do with COVID, customers, or anything, and the consequences are anything but "unintended".  YOU own that.

"More important than these lists, says Heyink, is the prospect of structural support in the form of mentorship for Black business owners, particularly Black women entrepreneurs. She says her business saw growth earlier this year when she was given the capital and mentorship to grow, and the accompanying knowledge that she could fail and try again."

All entrepreneurs take risks.  Again, not at all limited, much less unique, to Black-owned businesses.

And, if entrepreneurial Black women are all looking for mentorship, couldn't they mentor each other?  With all the free social media tools available, they can't get together?

OK, maybe there are not a lot of them.  But surely there are more than two, and that's a start.

"Still, the lists that she had been added to brought new customers her way, and she wasn’t about to let the demand overwhelm her."

Finally, someone who is taking advantage of success instead of whining about it.

And to be clear, this IS success.  Not an "unintended consequence".  This was always the entire point of starting the business in the first place.

"To prevent blowback from delays in shipment or bad reviews, she communicated to customers about her business operations, informed them about limitations that come with small businesses run by Black women, and adjusted her inventory — listing only as many items as she could afford to fulfill without falling into extreme fatigue."

So, she declines new customers and still gets piles of new customers?  Good on her!

No, really - good on her.  She's making the most of her success, entirely correct.  Excellent management of the situation.

But it's still success.  Not "unintended consequences".

"...10,000 orders between May 30 and June 1. These orders were mostly for titles which had been selling out everywhere, forcing publishers to reprint. The company did not have the manpower to fulfill that many orders and so came the backlash from customers accusing the owners of theft and fraud."

Yes, the difficulties of success.  But they're in much less danger of going under now, aren't they?

So which is it - are Black-owned businesses always screwed and eternally doomed to die, or are they suddenly riding a new market wave to more success than they can handle?  Can't really have it both ways, you know.

"The owners posted a statement to customers after complaints: “We are also receiving a number of disheartening emails asking us to cancel orders and refund payments, criticisms about how slow we are and that we have poor customer service because we have not answered an email. We do hope each and every one of you who has shown us support by purchasing through our website believe we are not accepting your money with the intention to keep it and not send out your orders.”"

Yes, the problems of success.  Seems like they're dealing with it as well as they can.

Although - OK, I'm not at all suggesting that they were somehow able to predict, cope with, or even manage such an incredibly large volume of unexpected orders - but don't most bookstores sell what's in stock, and put the rest on backorder?  Sounds like a rather large hole in their ordering system.

"The small company had channeled money into manufacturing products for the collaboration, and thus the drop resulted in uncertainty and precarity despite the company’s popularity."

What?  Small businesses take financial risks?!?  What a discovery!  What insight!! Give the author a Nobel RIGHT NOW!

OBVIOUSLY applies to every business, ever, anywhere.  Ownership has zero to do with it.

"Community rallying and hashtags not only brought Telfar and Gap to a resolution, but also catapulted the bag to new heights of demand, with the item selling out mere minutes after being released."

So - rampant success is now the problem?

Seriously - every other novel / unique item that sells out in minutes is reported as an unqualified success.  But this Black-owned business enjoys the same success and suddenly it's an issue?

"This was cause for celebration, yet brought with it resale bots and profiteers who wanted to capitalize off the attention a Black business was getting.  These problems created complaints from consumers, with some even accusing the company of creating false scarcity to drive demand. The company tried to address this by launching a “bag security” program allowing customers to preorder the bags they wanted."

Well done.  And - well, done then.  It's sorted.  And very easily, it sounds.

Tim would also (undoubtedly) point out that this is market forces at work, raising prices to cope with scarcity.  This really cannot be avoided in any meaningful sense.

"Other Black-owned businesses like golde and Hanahana Beauty also switched to a preorder model, following an influx of orders."

Yes, entirely sensible when demand exceeds supply.  The pure economist would say the prices should rise, but putting stuff on backorder works too.  

But every mail-, phone- and internet-order business has done this for simply ages. Exactly why is this suddenly a huge issue for Black businesses in particular?

"Faced with the pandemic and consequent shipping delays, she applied for a Paycheck Protection Program loan — with apprehension, due to past refusals she had gotten applying for loans as a Black small business owner. After waiting weeks to hear back and getting no response, she moved on."

This asserts without proof that she was denied the loan simply because she was Black.  Maybe, maybe not.  Some kind of evidence would be ni... oh, wait, we said that.

"Around this time, she began to appear on lists of Black businesses to support. Abena was excited, she says, because the majority of the lists — including one on BeyoncĂ©’s website — reflected an understanding of Hanahana’s mission."

OK, missions are great.  But sales are usually better.  Your mission doesn't pay the bills, sales do.

"Business got even better, but in July, the company announced that it was taking a “sustainable work vacation.” Making items available for preorder had helped Boamah, but it wasn’t enough. She realized that the company couldn’t produce or fulfill enough orders at the rate things were going, and it was important for her to keep in line with her company’s mission of sustainability and transparency. Despite the allure of new revenue, she took a break so the team could rest"

So business is good enough that she can put everyone on holiday, AND get free money?  

Perhaps these consequences were unintended - or, at least, unforeseen - but what sane business owner WOULDN'T want such luxury?

Lord knows I would sure like to be able to tell my customers to come back later in a couple of weeks, just so I can take it easy for a while.

Or, put another way - just what is she thinking?  She has UNPRECEDENTED demand, and should be moving heaven and earth to score as many of those sales as she can possibly get.  Not go off for a little lie-down after hugging Gaia.

Of course, she didn't do that at all, as the last line reveals:

"hired new team members, and applied for grants, many of which had only become available to her after the pandemic and uprisings started."

She's expanding both her team and her financial resources, presumably as fast as she possibly can.  Which is, of course, the correct and sensible response.

"Even after orders are completed, Black business owners have struggled with how to navigate shows of appreciation; many are making sure to restate their gratitude for fear of driving away customers, some of whom have implied that for them, #SupportBlackBusiness is an act of charity."

Yes, corporate image is a bitch.  But for everyone, not just them.

Seriously, how many big businesses have put their foot in it lately?

"Still others are figuring out exactly how to openly discuss the ways the influx of attention has affected operations, for better and for worse."

Oh dear God.  

EVERY business, big and small, White or Black, has operational problems.  That these problems are realatively new due to newfound success isn't a problem to be shared with your customers - it's cause for celebration, because now you're moving up in the world.  Smiling in front of the clients while working your ass off behind the scenes is the definition of small business.

"“Some Black business owners are scared to share the realities we face,” Winbush says, “because they don’t want to seem unprofessional, as coming off as unprofessional could negatively impact your business.”"

Just so.  This is Marketing 101 - make it look easy, come off calm, cool, and capable - while hiding all the hard work, frustration, and endless issues.  Regardless of what you sell - coffee, clothes, or conversation - that's exactly what you're being hired to do.

Honestly, I've never heard people whine so much about success.