By Judah Duke
When layoffs began to threaten her family’s financial prospects during the throes of the Covid-19 pandemic, Chelsea Ray of Detroit decided to quit her job as an engineer and join the family’s start-up chocolate business.
Ray’s aunt was let go from her job at an auto manufacturing plant and her mother was fired from her job as a financial-aid counselor at Mary Grove College in Detroit; the women were, respectively, three and five years from retirement. Her father, who is also a chaplain with a master’s degree, was laid off from his job as a violence-prevention counselor at a Detroit public school and now works a second job driving for Uber, while Ray’s mother works behind the deli counter at a Kroger supermarket, in addition to creating the chocolates for the family’s Insatiable Turtles brand.
Ray noted that her elders had imagined working the same job until retirement, even if they didn’t care for it. By contrast, Ray said: “I want to do something that I’m really passionate about.”
That passion, coupled with the unpredictable employment landscape around her, prompted Ray to leave her job as a manager at an Amazon facility. Today, she co-owns Insatiable Turtles with her mother and sister, selling pecans wrapped in a layer of caramel and chocolate.
Ray did not want to disclose specific profit and sales figures, beyond noting that her profits were up substantially this year. However, her last year’s earnings from Insatiable Turtles, which sells chocolates in bags of five for $20, totaled a fraction of Ray’s former salary.
“I wanted to do something that can build legacy, so we can kind of write our own narrative,” she said.
Entrepreneurship has long held the allure of a golden ticket to prosperity for many Americans. As the aftershocks of Detroit’s bankruptcy and the challenges from the pandemic persisted, entrepreneurship has increasingly been held up as a way to narrow the racial wealth gap. Three years ago, the Michigan Black Business Alliance (MBBA) was established, initially, to support Detroit entrepreneurs like Ray and to build a network of 1,000 Black million-dollar businesses in the next decade, according to its 2023 annual report. The organization has since expanded beyond Detroit. In addition, Michigan’s Lieutenant Governor Garlin Gilchrist’s team recently called for the creation of 1,000 Black millionaires, according to Brandon Reed, the director of external affairs for the MBBA.
But entrepreneurship is a risky business, especially for Black entrepreneurs, creating an especially precarious path for aspiring business people like Ray. According to the U.S. Bureau of Labor Statistics, 20 percent of small businesses fail within the first two years, and 65 percent within the first 10.
The uphill struggle is even steeper for Black Americans. Eight of 10 Black-owned businesses fail within the first 18 months, according to a Bloomberg report.
For Black entrepreneurs and minority business owners in general, who are also twice as likely as their white counterparts to report access to capital as a limiting factor to growth, financing is a major problem. Black-owned firms, including ones owned by women, are relatively prevalent in Detroit — a Black-majority city — compared to the national average. And while Black-led startups made up close to one-quarter of all new Wayne County companies, in 2021, they garnered only 1.5 percent of all venture capital that year. In Michigan, organizations are stepping up to provide funding through grants and loans, but many systemic hurdles remain.
“Detroit was the most red-lined city in the country for a while, and so, there’s just a lot of systemic barriers, even geographic barriers that just make it more difficult,” Reed said.
Ray credits the MBBA with providing the resources she needed to take her business from a private affair, selling chocolates to friends and family at church, to a budding operation with a website and a presence at Detroit food markets. She noted that MBBA workshops helped with her business plan and, in particular, persuaded her to put her family members on the company payroll — rather than pouring all profits back into the business.
The MBBA also partners with other organizations to provide its members with access to capital. One such group is the Michigan Women Forward, which issues microloans, ranging from $2,500 to $50,000, to women-owned businesses.
Michigan Women Forward stands out for its unconventional approach to disbursing loans based on a variety of factors, not just credit scores. (Indeed, poor credit scores are often a barrier to obtaining financing for Black-owned businesses.) The organization holds bi-monthly meetings with a loan committee that plays a significant role in making credit decisions. “Our underwriters are able to tell the entrepreneur’s story about how their credit was affected,” said Tanesia Greer, Michigan Women Forward business development manager. “Just think how much you would lend someone if you really understood their story, and you looked at their financials,” she said.
The vast majority of the businesses the MBBA supports are small, Black-owned firms. Most of its over 1,300 members usually have less than ten employees.
The historic barriers that kept Black Michiganders, many of whom migrated to Detroit from the Jim Crow South, from building generational wealth, is another major hurdle.
State Representative Joey Andrews, whose District 38 includes St. Joseph and Benton Harbor, uses his own family’s experience to illustrate how unequal the playing field is for Black and white entrepreneurs. Andrews’s great grandfather, an autoworker and union man, used his pension and savings to build a business–the Andrews family is white. Each subsequent Andrews generation has had successful business owners.
“What those union jobs enabled them to do was it allowed their families to enter the middle class, and then set them up so that their kids could do non-manual labor work,” said Andrews, who champions the trades, which can garner six-figure wages, as well as pensions and healthcare; he challenges what he refers to as the “myth” that starting a business is the only path to financial security.
“The message we’re trying to bring is that the trades are the way up and out — that enables you to set your kids up for success,” he added. “You’ll have the resources then so that your children can be the business owners and entrepreneurs. You can send your kids to college at that point, because you will have the money and the resources.”
Indeed, Ray also comes from a long line of Detroit auto workers. Her grandparents, aunts and uncles on both sides of her family worked for the Ford Motor Company.
Hampered, perhaps, by red-lining and a lack of credit, only recently has her family begun to think about becoming entrepreneurs.
Today Ray is determined to make a success of Insatiable Turtles. A $5,000 grant she won from an event at MBBA’s Wealth Summit, last year, gave her company a boost. Now she is applying for a $15,000-loan package in the hope of renting a commercial kitchen, improving marketing and rebranding her website.
In the meantime, Ray is looking for a part-time job in business consulting to help support her household so her husband doesn’t have to “take care of all the bills.” Eventually, she said, “I would like to work on the business full time.”