Black business owners face challenges in Arizona, report shows

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

Fernanda Sayles, CEO and founder of FernDiggidy Sweets & Treats, serves sliced ​​bananas in a pudding platter at the local First Arizona Community Kitchen in Mesa. (Photo by Justin Spangenthal/Cronkite News)

Fernanda Sayles on a sticker promoting her business FernDiggidy Sweets & Treats. Photo taken in September 13 January 2022. (Photo by Justin Spangenthal/Cronkite News)

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

CEO and founder Fernanda Sayles said the Banana Pudding Tray is FernDiggidy Sweets & Treat’s best-selling product. She quickly put the jars and cans of pudding together, which eventually resulted in a full refrigerator. (Photo by Justin Spangenthal/Cronkite News)

Each tin of banana pudding comes with fresh bananas topped with wafer crackers. FernDiggidy Sweets & Treats makes other desserts, each made with fresh local ingredients. Photo taken in September 13 January 2022. (Photo by Justin Spangenthal/Cronkite News)

PHOENIX — Fernanda Sayles fell in love with baking at age 10, when she started making banana pudding for her family in South Phoenix.

At the time, Sayles never imagined that she would one day own a successful business selling mason jar desserts.

Her success didn’t come easily, though, as she started FernDiggidy Sweets & Treats in 2015 using only the resources in her kitchen.

“I simply didn’t have a lot of money to start a business,” she said. “I’ve quit a few jobs to work full-time, but of course the bills keep going up, so I have to go back to work,” in a doctor’s office.

Sayles’ experiences are common among black business owners, who as of 2021 have the lowest entrepreneurship rate of any single racial and ethnic group in the U.S., averaging 0.28 since 1996, according to a March national report from Kauffman Indicators of Entrepreneurship %. However, the average rose to a high of 0.38% in 2020.

The State of Black Arizona’s 2022 State of Black Business report, released in August by data nonprofit The State of Black Arizona, showed that this is due to low levels of personal wealth, creditworthiness and low loan application rates.

The report also noted that black entrepreneurs had the lowest share of opportunity of any race or ethnicity — meaning they were more likely to start businesses out of necessity rather than opportunity.

If Black-owned businesses matched the population, Phoenix would have 4,945 such businesses, the study said. There were 1,019 people today, according to Brookings Metro data cited in the report.

If such equality existed, Phoenix would create more than 132,000 jobs, the study said.

Black Arizona executive director Teniqua Broughton said African-Americans have had lower entrepreneurship rates than other races for decades, and the trend has continued for generations in Arizona.

She attributes this to “the disparity in personal wealth and the creation of appropriate and equitable intergenerational wealth that has historically been stripped away.”

In addition to securing funding, the State of Black Business report cites networking, management education, business expertise and marketing as key challenges.

(Video by Anne Ravino/Cronkite News)

Sweet launch after hard fight

Sayles said she had no savings or other funds to start the business. She was ineligible for the loan and was denied even after obtaining permits and tax information.

Sayles said she started small and built her business through her personal network.

“I would go to local barbershops throughout the valley and they would welcome me in, support me, and tell everyone they could talk about my business,” she recalls. “Community is my backbone, from barbershops to friends and even complete strangers.”

Sayles said her business is rooted in her family’s picnics. Her family loves her banana pudding, strawberry cheesecake, peach tarts and seasonal treats so much, they often argue over who gets the last bite — especially the crispy corners of the pie.

To settle the spat, she restores harmony by starting desserts in mason jars. Soon after, Sayles decided to spread this joy and “kindness” and founded FernDiggidy.

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

Before her business took off, Sayles struggled to stay afloat during the pandemic. She applied for the Phoenix Small Business Small Grant and was awarded $3,000 to cover rent, utilities, employee wages and other expenses. Phoenix City Council allocated $8 million from the US Rescue Program Act for grant programs.

But many businesses have suffered during the COVID-19 pandemic. In the U.S., the number of African-American business owners plummeted from 1.1 million in February 2020 to about 640,000 in April of that year, Broughton said.

Arizona Offers Help for Black Business Owners

Arizona has several programs and organizations to close the wealth gap and assist with the startup and success of Black-owned businesses, 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 would like to see Black businesses be a resource for the community.

“If we can continue to give them the opportunities they deserve,” she said, “then ultimately what we’re doing is creating a space for generational wealth and bridging the gaps that exist in our communities.”

As a business owner, Gamon said she, like other Black-owned businesses, wants “to be recognized and given opportunity for what we value, what we bring.”

(Audio by Anne Ravino/Cronkite News)

‘Everyone wins’

Sayles says her dream for FernDiggidy is to sell her candy in grocery stores across the country and one day open a storefront.

Despite the economic challenges, she encouraged other black business owners to never give up on their goals.

“We have a history of perseverance, constant struggle, and never giving up, so we need to continue to achieve our dreams and goals,” Sayles said.

Despite the challenges, African-Americans, one of Arizona’s fastest-growing populations, are key to economic success, Broughton said.

“Everyone wins when we invest in our Black businesses and our neighbors — making Arizona thrive, attract industry and be a place where people want to live, work and raise their families,” Broughton said.

“The ecosystem needs to shift from working alone to working collectively. Arizona must prioritize targeted investments in political, social and business capital and begin building a better ecosystem for Black-owned businesses and entrepreneurs.”

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