- Coming up on "American Black Journal," we'll examine the impact of tariffs and rising costs on small businesses.

We'll talk about the top concerns of entrepreneurs and possible solutions.

Plus the CEO of a national think tank brings a message of racial and economic justice to Detroit Future City's Annual Forum.

Stay where you are.

"American Black Journal" starts now.

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Thank you.

(bright music) - Welcome to "American Black Journal."

I'm your host, Stephen Henderson.

Tariffs, rising costs, and supply chain disruptions are some of the challenges that face small business owners this year.

The current economic climate has entrepreneurs really concerned about their futures.

It is especially worrisome for African American business owners who have less access to capital and thinner profit margins than many of their white counterparts.

Joining me now with more insight on the economic fallout is marketing consultant Mark Lee, who is president and CEO of the Lee Group.

Always great to see you, Mark.

- Good to see you.

Thanks for having me.

- Well, so I mean, you know, I hear constantly from business owners whether they be white or Black, about the effect that tariffs are having.

And in some cases, it's the surprising, I guess, or unexpected effect of tariffs.

I think we all knew that would make things hard.

It is making things harder than many people believed.

But let's start by talking about the special effects of things like tariffs and supply chain disruption on businesses in our community, which already have it harder than other businesses.

- You know, right now, quite frankly, it's a challenge.

And I think over the last six months or thereabouts, the challenge have continued to increase.

And for example, what we're seeing is, particularly amongst our businesses and businesses at large, costs have increased 10 to 12%.

10 to 12% in terms of raw material costs have gone up as a direct result of the tariffs.

And when you think about that, if you're a small business owner, you have very limited access to resources or dollars compared to a large business.

So a large business can absorb that cost.

A small business cannot.

A survey was recently done where 60% of small businesses have also mentioned that their profit margins continue to be squeezed.

So those some significant challenges that are confronting small businesses.

- So if you're a small business, what are your options?

What are the things that you can do to make sure that you don't go outta business while this is going on?

- I recommend several things.

One is make sure they evaluate your costs.

Not weekly.

Heck, daily.

You know, make sure you evaluate your costs on an ongoing basis.

Number two is continue to negotiate with your suppliers.

So make sure that you can, if they're supplying you with product, try to see if you can get a better price with them.

It's gonna be a challenge right now, but at least it's worth the negotiations.

Number three is be totally transparent with your customers.

Make sure you're not trying to hide anything from them.

Explain to them exactly what's going on.

And number four, you have to consider whether or not you need to either, you, the business owner, absorb the cost or do you pass that cost onto the customer.

Now that's the tough conundrum.

Because I've had a relationship with you.

I wanna maintain that relationship with you.

Now I gotta come back to you and say, "Hey, I might have to pass this cost onto you."

- Yeah.

Access to capital is always an issue for African American businesses.

Look different than it does for other businesses.

How does that get worse or does it change even, while things like costs are going up?

- Access to capital will always be a challenge irrespective of the economy.

Let's be quite honest about it.

And when we think about access to capital, it's gonna be even more of a challenge right now because financial institutions are gonna continue to increase the scrutiny.

And so if you don't have your financials in order, if you don't have your cost structure in order, if you were to go in and consider getting a loan or some type of loan at this point, it's gonna be a challenge.

- It's harder.

- It's more difficult.

But the option, there is an option here, is to look at grants.

The difference is a loan you have to pay back within certain terms.

A grant, you don't have to pay back.

So what we can do with the grant is, is you just need to explain how you're gonna use the money, demonstrate how it's gonna be... Give a return, so to speak.

But you do not have to pay the grant back.

- Yeah.

Where are some of the sources for those grants?

I mean, I think that's a pipeline that a lot of people aren't terribly familiar with.

- There are many nonprofit organizations out there offering grants.

A lot of times we think of financial institutions, the traditional banks, for example, for loans.

But there are many organizations where, so I don't, you know, show favoritism, but there are some organizations that will offer micro loans and micro grants up to $50,000.

And those, that is an organization that's focuses specifically on women-owned businesses.

There are Black-owned organizations that will supply you with grants as well.

The best way to answer that question is Google it.

Simply Google grant opportunities here in the city of Detroit to support a small business.

- Yeah.

Is the strategy, while this all goes on in Washington and gets hashed out, to kind of hunker down and kind of pull things in, in other words, temper your expectations and plan for slower growth or just kind of stasis while it happens?

Is that a realistic way to think about it?

'Cause the truth is, you don't know how long this will go on.

Is it that you have to have a more fundamental change in the way you think about your business?

Or do you just adjust to the current climate?

- You know, I've had this conversation before and the bottom line is to go back and look at your foundation.

Hunker down.

And what we're seeing right now is that people, even larger organizations, are delaying their hiring practices 'cause they're not sure they can afford to bring in new people right now.

So there's an option there of do you 1099 employees, right?

That you delay the hiring to when we think it might be coming down, the care of cost.

So to answer your question, the best strategy right now is go back and look at your foundation.

Again, look at the cost.

Talk to your customers.

Don't make any rash decisions at this point.

Do what you can afford to do.

Don't do what you can't afford to do moving forward.

- Yeah.

What about if you are someone who's thinking about starting a business and you think, "Ah, the 2025, 2026, that's when I want to pull that trigger."

Is this a good time to do that?

Is this a terrible time to do that?

Or is this just like any other time when you're making that decision?

- You know, that's a great question.

I get asked that question a lot.

And the time for you to start a business is when you're most comfortable.

If we had a crystal ball, we could predict the future, we could certainly have that stability.

Including we are in unstable times.

If you have the resources, if you have the plan, if you have the product, if you have the relationships, it's always a good time.

That's counterintuitive.

But it's always a good time to start a business.

The challenge is when you focus on sustainability and growth is, do you understand those other factors out there?

IE tariffs.

And how do you navigate and plan for those?

So it's always a good time if you have the resources and a plan.

The challenge is making sure you stick to that plan and you have the resources moving forward.

- Yeah.

What about businesses that are in trouble?

Businesses that are looking at the bottom line and saying, "Look, we're underwater because of this climate."

When do you throw in the towel, I guess?

And if not, what do you do to get through, if really, literally you are just going out of business?

- Let me tell you, at Black businesses right now, under normal circumstances, the average Black business entrepreneur has less than $10,000 in the bank.

That's enough to get you through two weeks.

That's it.

- [Stephen] That's it.

- So now if you think about the tariffs and you get your bottom line, you gotta make some hard decisions.

Now here in Detroit, we're fortunate, we have a lot of great businesses.

We've still got a lot of businesses opening.

The challenge right now, over the last several weeks, we've had a lot of businesses go out of business.

Restaurants, those in service industry.

So when do you decide?

That's a decision that you have to make for yourself by opening at your financials.

How much money do you have to bank for sustainability and growth?

- What are some of the resources for businesses that are in that position?

In other words, kinda last chance, kind of lifelines that they could reach out to just to get through to the next payroll or to the next year?

- One of the lifelines, I'm looking to the camera right now as I look at you and I'm talking to the audience on the other side of the camera is support small businesses.

Spend local.

Right?

I know we have a lot of big box businesses out there in the world.

Detroit has over 60,000 small businesses.

75% are women- and Black-owned.

Get out there and spend your resources here in the city, across the neighborhoods.

And in terms of also a lifeline is, again, continue to be faithful, be honest, you know, be trustworthy, talk to your customers and just continue to keep moving forward.

Don't throw I the towel just yet.

- Yeah.

You know, that idea of spending in the community, that's gotten us through lots of things in the past is the way in which businesses kind of interact with each other, make sure that they are buying from each other.

And the way that customers patronize those businesses.

It seems like right now is a great time to kind of double down on that and think about your life and your habits and adjust them if you don't feel like you're giving as much support as you could.

- Detroit is a supportive city.

We support each other, and now more than ever, we need to double down on that support.

And a lot of our businesses, I'm talking specifically Black-owned businesses, we don't have the resources as the white-owned businesses, the general businesses, if you will, Caucasian businesses.

So again, we have to double down and help each other because if we don't do that, we're not sure how we're gonna look moving forward.

So right now we're trying to double down, help each other, be supportive, and just make sure that you continue to invest the resources within the community.

- Yeah.

Yeah.

How long do you expect that things will be like this before, you know, I mean the economy goes up, it goes down, it always goes back up.

So are we looking at a short-term problem or do you think it's a long-term issue?

- Personally speaking, as well as professionally, I think it's a long-term situation.

A lot of times when something's eventually absorbed, it becomes part of our culture so to speak, you know, people don't just walk away from it.

And as much as I wanna say this is gonna be over in a month and the rest of the year, I don't believe that.

I think we're looking at '26 and beyond.

- [Stephen] Wow.

- So this could be a long-term supposition or proposition.

That's why it's important to go back and evaluate your plans and make sure that you have alternative plans to help you get through these challenging times.

- Okay, Mark, it's always great to have you here and to give all this great advice to business owners.

- Appreciate it.

Thank you.

- Yeah.

Okay, last month, Detroit Future City held its annual forum, which brings together civic, nonprofit, and business leaders for a day of strategizing about the city's next chapter.

The keynote speaker was Michael McAfee, who is president and CEO of PolicyLink, which is a national research and action institute based in California.

His address focused on community, equity, and leadership during a time of deep division in our country.

I spoke with him after his talk.

And here's a portion of our conversation.

I wanna start with you talking about whether you feel we are ending one thing to go to another.

And if so, how do we do that on our own?

How do we separate, I guess, from what we have known, all of us, our entire lives, to go to something different?

You use the word "all."

A lot of people don't want to go with us, I feel, to something different.

So how do we make sense of that?

- Thank you for the question.

What we're asking for, the nation wasn't designed for.

We just gotta own that and accept it.

Our institutions weren't designed for it.

Our laws weren't designed for it.

That is what the tension is.

The fundamental problem in the nation right now is the founders and all who participated in the democracy and the economy in the early part of it never ask themselves one question: What happens when the thing that you've never loved becomes the majority in the nation?

See?

They forgot to send us back.

(audience laughs) And so now, you're having to sit with that.

I mean, think about it.

That's not a simple question.

What happens when the thing you've never loved, you gotta live with?

And it's become the majority in many of the places and getting ready to become the majority of the entire nation.

It's already, where I live in California, people of color are already the majority.

Think about how disruptive that is when you founded a nation that said I wasn't even human.

And now we're the majority.

You talk about disruptive.

Now you may have just wanted the economic benefit, but you still now gotta live with the consequence.

See, and that's part of the problem when you're asleep at the wheel of a democracy in an economy.

Didn't think about that.

This tension is about that.

But we can't even talk about race in America.

That's the problem.

We don't even know our history.

So the problem is what happens when you have an ignorant citizenry, at the same time, you socialize people to be maximally selfish no matter what color they skin, 'cause Black and brown folks that bought into this capitalist thing too.

So when I say this as a founding moment, because in many ways, we've gotta socialize an entire new generation of folks to hold the interest of the all.

It's not how we were socialized.

We all were socializing.

I mean, kids today, starting the time they born.

To compete, to step over you, to get into the good school.

For what?

You ain't gonna have no jobs now.

You're gonna have student loan debt.

But you're doing all this stepping over people for what?

You know, I'm fascinated by how we don't care about the all until I'm in trouble.

You know, I'm in the bay and all these folks who thought they didn't have a dog in this equity fight and wanna run away from it.

Oh, I bet you they talking about equity now that they losing they jobs because of AI.

See, now they like, "What we gonna do about the economy.

What are we going to do about the economy?"

We ain't gonna do nothing.

You just said we don't care about diversity, equity, and inclusion.

You just said we're taking that off the table.

You just said we can't talk about equity, our gaps.

So what can we do right now?

So yeah, you got that $2 million home.

Figure out how you're gonna pay for it.

That's rugged individualism.

You see my point?

Because that's real, folks.

The very folks who don't like equity, don't like diversity, equity, inclusion, they gotta eat their own dog food right now because you're not replacing that salary that helps you with that $2 million house in the bay now because AI has come for your job.

But when it was coming for low-wage workers, you didn't care about them.

It was a personal defect about them.

I wonder what the personal defect is about you now.

You see how we get into this?

Because we've never wanted to focus on the system.

Absolutely, personal responsibility is important and so is understanding the design of an economy that is designed to extract labor at the lowest cost for all of us.

But when you don't tend to these things, you miss that point.

So that's why I think it's an exciting point 'cause I think you get into a place just from a street smart perspective where you're gonna have enough pain from everybody that folks are ready to do something different.

And what I'm asking us to think about, this is actually not that foreign.

There is a whole area of organizational development literature, it's called popular ecology, where I'm asking us to think about how do we ride these waves of these environmental jolts to usher us into something new?

Because people are going to feel the pain and the folks that I'm least worried about are poor people 'cause we know how to survive.

I ain't worried about poor people.

I'm worried about all these middle-class folks who have forgotten how to survive or never had to.

So folks think as they cut programs and things like that, that they're actually hurting poor folks.

No, you're not.

If you ain't never seen how a poor people's economy works, you really should go check it out.

I get to see it every day with my sisters and I come from it.

That's not what you gotta worry about.

There's a generation of people who have not been conditioned to perform in a society where they're getting ready to lose all supports on top of we've unraveled the basic safety net that we had.

So I think this is an exciting time because our institutions are framed, et cetera.

I mean, think about how relevant an institution is if they have to have a board meeting to say they're gonna help Black people.

Think about that.

If PolicyLink had to have a board meeting to say, "Is it safe enough for me to help poor whites?"

do you think that would be a relevant institution?

Because if you're that scared, you ain't gonna do no real work anyway.

And so what I'm trying to signal to you, our institutions were already irrelevant and feckless.

We've just not wanted to say it publicly.

So this is a moment where, if we're smart, we don't get lost in all the calamity of it all and we start building that future.

- You know, I also go back just five years, right?

To a really different moment in this country when all of a sudden, it seemed as though there was real momentum on the side of reckoning with history, of reckoning, with inequality.

This whole phrase, DEI, was kind of coined five years ago as people started to say, "Okay, look, we have to do something different."

And now DEI is a pejorative, right?

It's an insult that you watch the cable news shows or on social media, someone gets called a DEI hire or a DEI this or that.

I mean, in five years, it feels like we've lost everything that built up to that moment.

But is there anything that we can take with us from that five years into the future the to rebuild it?

- The first is to understand what would happen when you introduce a significantly new intervention into a space that was never ready for it.

You know, it wasn't like the nation did work to get ready for the racial awakening.

It hurled into it.

That was like one of those environmental jolts that I'm talking about.

And so yeah, people started having their own journeys.

I saw white folks do the most beautiful processes of educating themselves and thinking more deeply about race and changing organizations.

It was actually beautiful.

I saw Black and brown folks doing the same.

But the problem was, the nation wasn't ready for it.

But there was also a lot of bad practice going on.

You know, we never said to ourselves what would happen as a trainer if you stand up in front of a room and just tell people they suck over and over and over?

At what point do you think that they're not gonna rebel against you?

And we never checked that bad practice.

That's not evidence-based adult learning practice, folks.

It wouldn't work for any population.

So in many ways, they're on the wide spectrum of all the things that happened.

There were a lot of good things that happened, but there were a lot of bad things, but most importantly, there was not a strategic approach to advancing the agenda.

And that's why I'm asking us to be deliberate and founding.

We should have expected that there was gonna be a major blow up.

Our institutions weren't ready for this.

Our society wasn't ready for this.

Our citizenry still is ignorant about this.

And we never said, "Well, what will happen if you just then dropped this bomb in the middle of it?"

Right?

So we should be smarter as we go forward.

Now that's why I'm saying we gotta be the founders.

We live through that we should be smart enough now to know how to lead the next time we get a chance through it.

But what also happened was, and this is where we have to be honest, in many instances, because we've been hurt, we weren't holding the interest of the all.

We was just like, "Look, I'm fine just serving Black people," 'cause you know what?

Nobody cares about our issues.

So I'm signaling this because we even had to deal with this at PolicyLink.

When I centered the a hundred million at the time, living at 200% of poverty, the staff asked me a question.

They said, "Can we just focus on the 50% of that population that is Black and brown 'cause folks don't want to?"

And I said no.

I had just became president of PolicyLink.

And I'm like, "Man, y'all gonna hit me with this right now?"

But it was going to be a deal-breaker about whether I stayed or left.

Because remember, the operative word in the equity definition was "all."

And even though they were asking, not from a malicious place or a discriminatory place, it was coming from a hurt place.

I understood it, but it wasn't going to be right.

It wasn't going to be right.

And these are the tough decisions that we gotta make every day.

It is time for us to do the right things when we get a chance to, holding the consciousness of those, the all and those founding capacities that I shared.

- Yeah, I'm big on the idea of, especially in moments like these, helping people understand what their specific role is.

What they can do, what they can think about, what they can learn that helps build, that helps this new founding that you're talking about.

You go back in history and think of different times in which new things are created.

There's individual action behind all of that.

And I think there are a lot of people struggling with what to do, especially right now as so many people are just kind of suffering through what's happening to them.

So what would you say to this audience or another about action?

What do they do?

- The first thing I want you to do is remember what I said.

You gotta remember that we earned this moment because if you skip over that, you will be unaccountable.

Because it's easy to blame someone else for how we got here.

I'm not saying blame the victim, that's not what I'm saying.

I'm telling you to remember all those things that we've said.

Don't talk about race, class, gender.

All the times that we've tried to change the words, we were not only in our work and our power.

All the times it was okay to call Michelle Obama a monkey, all the times it was okay not to allow Obama Supreme Court nominee to go forward.

See, these are all the frame that we forget about.

We thought these were just conversation topics.

They're not.

- And you can see the entire Detroit Future City forum at AmericanBlackJournal.org.

That's gonna do it for us this week.

You can find out more about our guests on our website and you can connect with us anytime on social media.

Take care and we'll see you next time.

(bright music) - [Announcer] Across our Masco family of companies, our goal is to deliver better living possibilities and make positive changes in the neighborhoods where we live, work, and do business.

Masco, a Michigan company since 1929.

Support also provided by the Cynthia and Edsel Ford Fund for Journalism at Detroit PBS.

- [Speaker] The DTE Foundation is a proud sponsor of Detroit PBS.

Through our giving, we are committed to meeting the needs of the communities we serve statewide to help ensure a bright and thriving future for all.

Learn more at DTEFoundation.com.

- [Announcer] Also brought to you by Nissan Foundation and viewers like you.

Thank you.

(cheerful music)