Black business owners face challenges in Arizona, report reveals

Fernanda Sayles, CEO and founder of FernDiggidy Sweets & Treats, begins preparing her special banana pudding mix at Local First Arizona Community Kitchen in Mesa on Sept. 13, 2022. (Photo by Justin Spangenthal/Cronkite News)

Fernanda Sayles, CEO and founder of FernDiggidy Sweets & Treats, places banana slices on a pudding tray at Local First Arizona Community Kitchen in Mesa. (Photo by Justin Spangenthal/Cronkite News)

Fernanda Sayles is featured on stickers promoting her business, FernDiggidy Sweets & Treats. Photo taken on September 13, 2022. (Photo by Justin Spangenthal/Cronkite News)

FernDiggidy Sweets & Treats dessert jars are sold at Uptown Farmers Market in Phoenix, Retail Therapy AZ in Glendale, and Main Street Harvest at the Mesa Community Store. (Photo by Justin Spangenthal/Cronkite News)

The Banana Pudding Tray is FernDiggidy Sweets & Treat’s best-selling item, according to CEO and founder Fernanda Sayles. He quickly assembles jars and cans of pudding, eventually leading to a full fridge. (Photo by Justin Spangenthal/Cronkite News)

Each jar of banana pudding comes with fresh bananas mixed in and topped with a wafer cookie. FernDiggidy Sweets & Treats makes other sweets, each made with fresh, local ingredients. Photo taken on September 13, 2022. (Photo by Justin Spangenthal/Cronkite News)

PHOENIX – Fernanda Sayles found her love of baking at age 10, when she started making banana pudding for her family in South Phoenix.

At the time, Sayles never imagined that he would one day have a successful business selling desserts in Mason jars.

His success didn’t come easy, however, as he started FernDiggidy Sweets & Treats in 2015 with just the resources he had in his kitchen.

“I didn’t have a lot of money to start my business,” he said. “I quit a couple of jobs to pursue my business full time, but of course the bills kept coming in, so I had to go back to work” at a doctor’s office.

Sayles’ experience is common among black business owners, who as of 2021 have the lowest entrepreneurship rates of any race and ethnicity in the US, averaging 0.28% since 1996, according to a Kauffman Indicators of Entrepreneurship March National Report. However, that average rose to a high of 0.38% in 2020.

The 2022 State of Black Business report, released in August by the nonprofit data organization The State of Black Arizona, indicates that more than 50% of Black business owners struggle with a lack of access to capital, due to low levels of personal wealth, disparities in creditworthiness, and low loan application fees.

The report also indicated that black entrepreneurs have the lowest opportunity share, meaning they are more likely to start a business out of necessity than opportunity, of any race or ethnicity.

If black-owned businesses were to reach parity with the population, according to the study, there would be 4,945 such businesses in the Phoenix metro area. According to Brookings Metro data cited in the report, today there are 1,019.

More than 132,000 jobs would be created in the Phoenix metro area if such parity existed, according to the study.

Teniqua Broughton, executive director of The State of Black Arizona, said African Americans have had lower rates of entrepreneurship than people of other races for decades, and the trend has persisted in Arizona for generations.

She attributed this to “disparities in personal wealth and the creation of adequate and equitable generational wealth, which have historically been taken away.”

In addition to access to capital, The State of Black Business report listed networking, management education, business experience, and marketing as top challenges.

(Video by Annie Lavino/Cronkite News)

Sweet launch after an uphill battle

Sayles said he had no savings or other funds to start his business. She did not qualify for the loans and was denied even after obtaining permits and tax information.

Sayles said he started small and built his business through his personal network.

“I would go to local barbershops all over the Valley to spread the word, and they welcomed me, supported me, and told everyone about my business,” he recalled. “The community was my backbone, from barbershops to friends and even complete strangers.”

Sayles said her business has its roots in her family’s cookouts. His family enjoyed their banana pudding, strawberry cheesecake, peach cobbler, and seasonal items so much that they often argued over who got the last bite, especially the crispy corners of the pie.

To settle the dispute, he began making desserts in Mason jars, which restored harmony. Soon after, Sayles decided to spread this joy and “goodness” and founded FernDiggidy.

Sayles now bakes at the Local First Arizona Community Kitchen in Mesa and sells her sweets and treats at the Uptown Farmers Market in Phoenix, Retail Therapy AZ in Glendale, and the Main Street Harvest Community Store in Mesa. She also prepares gluten free, sugar free and vegan options.

Before his business could get off the ground, Sayles struggled to keep it afloat during the pandemic. He applied for a Phoenix Small Business Microgrant and received $3,000 to cover rent, utilities, employee salaries and other expenses. The Phoenix City Council appropriated $8 million from the American Rescue Plan Act for the grant program.

But many companies suffered during the COVID-19 pandemic. In the United States, the number of black business owners plummeted from 1.1 million in February 2020 to about 640,000 in April of that year, Broughton said.

Arizona Has Help for Black Business Owners

Arizona has several programs and organizations to combat the wealth disparity gap and help Black-owned businesses launch and succeed, including the UPI Loan Fund, the Foresight Foundation, and SEEME (Social and Economic Equity for Minority Businesses).

Angela Garmon, owner of ARG Coaching & Consulting Group and founder of SEEME, said she wants to see Black businesses become visible as resources to the community.

“If we can continue to provide them with the opportunities that they deserve,” he said, “then ultimately what we are doing is creating a space for generational wealth and closing the disparity gap that exists within our community.”

As a business owner, Garmon said she has the same hopes as other black-owned businesses: to be “recognized for our value, what we bring to the table and given opportunities.”

(Audio by Annie Lavino/Cronkite News)

‘everyone wins’

Sayles said her dream for FernDiggidy is to sell her candy at major grocery stores nationwide and one day open a store.

He encouraged other black business owners to never give up on their goals, despite economic challenges.

“We have a history of determination, constant struggle and never giving up, so with our dreams and goals we must continue to do so,” Sayles said.

Despite the challenges they face, African Americans are one of the fastest growing demographic groups in Arizona, Broughton said, and are key to the success of the economy.

“Everyone wins when we invest in our black businesses and our neighbors, so that Arizona prospers, attracts industry and is a place where people want to live, work and raise their families,” said Broughton.

“The ecosystem needs to move from individual efforts and start working as a collective. Arizona must make targeted and intentional investments of political, social, and business capital as a priority and begin building a better ecosystem for Black-owned businesses and entrepreneurs.”

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