Small Businesses Impacting Growth of Detroit Economy

According to a February 2023 report by the City of Detroit’s University Economic Analysis Partnership, expectations from the study found “Detroit’s resilience in recovering from the pandemic to date to translate into continued growth even amid a challenging national economy.”

“The past year featured primarily, but not uniformly, encouraging developments in Detroit’s economy. We estimate that employment at establishments located within the city had recovered roughly 86 percent of the initial pandemic losses by the first quarter of 2022,” according to the report.

In a time where small businesses are developing jobs, there is an entity playing an important role in providing the tools and technical assistance small businesses need in order to succeed.

“We go out and facilitate growth and development by doing business attraction and retention,” said Kevin Johnson, President and CEO, Detroit Economic Development Corporation, the private-nonprofit organization serving as Detroit’s economic development agency.

“We focus on small business development as well as marketing and branding the city both domestically and internationally to try to bring more job opportunities to the city.”

Johnson leads an agency that is also working with the City of Detroit to develop and redevelop properties, putting them back into productive use, work that he believes has seen a measure of success for over 40 years ever since DEGC was first stood up during the administration of late Mayor Coleman A. Young.

Small businesses play a vital role into the stability of Detroit’s economy and neighborhoods. It’s an important element and focus of the DEGC as it has partnered with entrepreneurs seeking brick and mortar opportunities through its Motor City Match program.

“We’re talking about business and in neighborhoods which is vitally important,” Johnson says, as he explained the role DEGC has on facilitating the opening of physical storefronts. “Downtown pays an integral part in Detroit’s revitalization, but if the neighborhoods aren’t participating in that by developing entrepreneurial opportunities.”

The Motor City Match program has facilitated the opening of 163 new brick and mortar businesses since the program began in 2015. The program has so far distributed up to $18 million which has fostered nearly $87 million in neighborhood investment. Currently, the agency is on a pace to distribute $1million a quarter and recently conducted it 24th round of awards to entrepreneurs who are often times witnessing “their dreams come of life.”

“There are goods and services, that without these programs and activations of storefronts, then those dollars tend to escape our city and they don’t come back, they don’t circulate. The mark of a good city is the circulation of its dollars.”

April Anderson, co-founder of Good Cakes and Bakes, understands first-hand the importance for the circulation of local dollars and how small businesses and bake shops like hers benefit the local ecosystem.

“Most of the time, the people who work there (small business), live in that community, so when they get paid, their spending money in the community,” Anderson says.

She’s also utilizing other local businesses for her bakery’s printing needs and custom boxes, being personally intentional that all aspects of her business needs are helps other Detroit companies and entrepreneurs.

Anderson understands the importance of supporting local businesses just as she has received the same favor. Her Good Cakes and Bakes shop on Livernois has received support from numerous avenues, including DEGC, support from community and resource agencies which she finds is critical to her bakery thriving and growing. Over the summer, he expanded her shop to s second location in downtown Detroit.

“We’ve worked with the City of Detroit to hire returning citizens, it’s one of our big missions for our returning citizens to earn a living wage, as well learn a hard skill, and have a medical time off.”

Efforts to secure financial support to fund the wages of returning citizens by 50 percent was a program by City of Detroit that greatly assisted Anderson initially. She says increased demands are unfortunately outgrowing worker retention and staff hiring.

They are pains that businesses will encounter over time and some pro-business experts believes it’s going to take on-going support and sustained resources for small business to thrive.

“We create programs and advocate for policies that advocate for Black-owned businesses,” said Charity Dean, President and CEO, Metro Detroit Black Business Alliance (MDBBA).

“We are very engaged in programs that are designed to help business owners get technical assistance such as marketing, legal, accounting and programs designed around capital. Our Capital Connect program connects funders directly with Black businesses.”

Founded in 2021, it’s organizations like MDBBA that are playing an important role to help stabilize operations of small Black businesses in Detroit.

“If I was a manufacturing company, I can use state resources to offset the cost of building my manufacturing facility, I can go to city government to get workforce development, …if I’m a small business owner, I don’t have any of that.”

“The way in which government creates incentives for industries that they choose is not equal to what we need for small businesses.”

Dean touts other services her agency provides such as its Black Business Resource Center which offers free co-working space with internet connectivity as it works to close the digital divide. The organization is also connecting businesses to interns who will learn entrepreneurship and participate in pitch competitions.

Despite its efforts to aid small Black business, Dean advocates for being informed about government policy which can help and sometimes harm business.

“The city is changing the way it does procurement,” Dean says. “If someone wouldn’t have called me about this ordinance, it would’ve passed, (as she explained her attendance of a recent City Council meeting). “It’s fundamentally going to change the opportunity for small Detroit contractors.”

Despite DEGC efforts that works closely with City of Detroit, Dean believes city government needs an office of small business affairs so there are proactive efforts to deal with policies that impact small businesses.

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