Creating growth opportunities for Black exporters

For Black business owner, Schamma Rosidor, the pandemic was no excuse for having a bad hair day.

But in December 2020, when a Montreal pharmacy deemed hair products for Black hair “non-essential,” the co-founder of Royalty Natural, a brand of hair care products for Black women, knew she needed to act fast.

That decision changed the trajectory of her company’s success. 

Pivoting during the pandemic

Already facing setbacks during lockdowns with the closure of Montreal salons carrying her shampoo, serums and moisturizing creams, news that Black women faced yet another hurdle was just the impetus Rosidor needed to rethink her business plan.

“The whole thing was a shock to us, but that crisis helped my business grow. I put more money into marketing. I gave free online consultations for people to use my products. They were buying like crazy because, with their hairdressers not available, they didn’t know how to do their hair,” says the passionate entrepreneur, who launched her organic brand, Royalty Natural, with her childhood friend, Fabiola Feurimar, in 2017.

The pivot paid off: Before the pandemic, Rosidor’s kitchen table business generated $30,000 a year, with 90% in salon sales and the rest from online purchases. After changing focus, she and husband Jean-Pascale Gaspard went from five orders a month to 25 a day and cleared $250,000 a year in revenue, all while raising four children under eight.

Now expanded into 15 Montreal salons, seven Jean Coutu pharmacies and her online store, Rosidor is eyeing trade with markets in Africa, France and the United States with help from Export Development Canada’s (EDC) Inclusive trade strategy.

Through her growth, Rosidor also discovered an unexpected trend adding buoyancy to her sales: As Black Lives Matter advocacy slipped down the political agenda, there was an inverse increase in the diversity of customers supporting her business because it was Black owned.

“When I bought this business in March 2017, I wanted to be the first brand in pharmacies that is Black owned, born in Quebec. Black women are everywhere, but our products are not. I was convinced after the pandemic that I had created a niche for myself,” she says.

What’s more, through EDC connections, Rosidor is now part of a national community of 15 Black business owners with whom she shares her challenges and successes, and ideas for business expansion. 

To get clearer insight into the key obstacles Black business owners face, EDC published Trade barriers for Black businesses in Canada in 2022 after consultations with Black focus groups. Participants identified several key issues, including:

• access to financial support and capital;
• knowledge gaps;
• marginalization in business sectors; and
• mistrust or inhibitions in working with financial and government institutions. 
• In the report, they also shared their observations and recommendations.

“When asked about business strategies and goals, participants pointed out that, historically, traditional financing models have been ineffective for or inaccessible to Black exporters, leading many to be reliant on their personal finances and relations. Black business owners have had to set up their own co-ops and organizations to pool their financial and other resources,” notes the report.

Recognizing that access to capital is problematic for Black businesses—particularly, those that are export-focused—EDC is reviewing programs delivering capital for equity-seeking groups, says Jennifer Cooke, EDC’s director of Inclusive Trade. 

EDC is also tackling the issue of access to knowledge and networks, led by Myriam Francisque, EDC’s national lead for Inclusive Trade, Black and racialized exporters. Since being appointed to the role in late 2022, Francisque’s focus has been on nurturing small business owners, like Rosidor, and supporting those already on their way, including Myriam Jean-Baptiste, founder of LS Cream Liqueur, the first Black and female-owned company to break into Quebec’s liqueur sector. 

“In 2022, our focus at EDC was about access to information and connections for Black-owned businesses, because unless they’re part of the system already, the doors are closed,” Francisque says, noting that many national organizations are also making positive, systemic strides, like banking sector programs that champion Black entrepreneurs. Speciality micro-loans, notably from the not-for-profit Federation of African Canadian Economics, are also making a difference.

“The No. 1 challenge is knowledge and access. Many small businesses can’t grow because they live contract to contract. We know that around 90% of Black-owned, small businesses are micro-businesses, with just $25,000 to $100,000 in revenue, which makes accessing capital challenging,” says Francisque.

“But they also lack support in being part of an entrepreneurial environment. Many Black business owners are highly educated, they have great knowledge in professional fields, but when it comes to running a business, it’s a different type of knowledge. This is a reflection of the culture of not seeing the modelling of entrepreneurship,” she says.

Broadening the reach of Black entrepreneurs

Although the number of Canadian Black-owned businesses has grown to an estimated 144,980, the variety of sectors in which they operate hasn’t expanded as significantly. Francisque says while there are some examples of Black innovation in sectors, like technology and health, there are just as many cases where the businesses find better financing in the U.S. market.

“I see businesses that are ready to take off and unless they have a founder rooted in Canada, wanting to grow in Canada for Canada, they are at risk of leaving,” she says.

Broadening the scope of sectors where Black firms operate isn’t just good for Canada, but it’s important for diversity as well, notes Mello Ayo, vice-chair of the Canadian Black Chamber of Commerce (CBCC) Board of Directors. The CBCC shares knowledge and resources, including advisory and mentorship programs, marketing, and guidance to accessing capital with its members.

“We need to diversify to other sectors such as big tech, finance and banking, media and communication, energy, metal and mining, only to name a few,” says Ayo.

“Black businesses have been ghettoized in the sense that they’re largely limited to a narrow range of sectors—food and the service industry, mainly. This heavy concentration in a limited number of sectors is, by and large, due to a lack of access to information, networks, venture capital and restrictive inequitable applications of rules that prohibit Black innovation,” he says.

Overcoming those barriers and creating new opportunities for growth, as well as access to capital, are major priorities in 2024, says Francisque. The focus will be on export opportunities, information about EDC export trade tools and creating connections between the business community and Black entrepreneurs.

“Every organization has their equity-diversity-inclusion matrix and want to be more involved, so EDC is playing a major role in connecting them. Not all businesses are export-ready, but we’re connecting and meeting them where they’re at. A lot of organizations are also providing wraparound support, doing a lot with little, so where we can contribute more to those entrepreneurs making an impact, we’ll be there,” she says. 

“Long term, the goal is to create a path for the next champions, to create business leaders, to continue to empower them and their communities. When we see it’s possible with others, we know we can get there.”

Black History Month by the numbers

• In 2021, more than 1.5 million people reported being Black in Canada, an increase of nearly 350,000 since 2016.
• There are more than 300 ethnic or cultural origins amongst the Black population, led by African, Jamaican, Haitian and Canadian-born.
• In 2020, there were an estimated 144,980 Black-owned businesses in Canada.
• Nearly one-third of the Black population in Canada, aged 25 to 64, have a bachelor’s degree or higher.
• Black-owned businesses represent 2.4% of all businesses in Canada.
• Black business owners are more likely to be immigrants, self-employed or younger Canadians.
• Nearly 72% of Black business owners are between 25 and 54. Another 25.2% are older than 55.
• Around $42 million, or 1% of federal business innovation and growth support, known as BIGS, went to Black-owned businesses in Canada in 2020.
• Of Black-owned businesses receiving BIGS support, 56.7% were owned by immigrants.
• Black and non-Black, female-owned businesses are comparable: 32.7% are Black owned, 36.1% are non-Black owned.
• Overall, 69.5% of Black-owned businesses are sole proprietorships versus 59.6% of non-Black-owned businesses.

For more information and to learn how we can help your company, call us at 1-800-229-0575 or visit www.edc.ca.