Phil Powell and his wife Chantel always dreamed of starting their own business. They especially wanted it in Austin, the community they grew up in. Their dream came true in May 2005, when they opened Cream and Sugar Caf at 5840 W. Madison St.
Last month the Powells’ dream turned into a nightmare when they were forced out of their Madison location. The Powells are currently fighting their eviction in court and looking for a new location. But for the couple, and their loyal customers, the damage has already been done.
“In a way, we feel like we’ve let the community down,” said Chantel. “As far as the community, it’s sad because people were used to us being there on a regular basis.”
The Powells were evicted from their Madison Street storefront location last month.
But the Powells aren’t the only Austin business owners who have folded up shop after a short time in operation.
The Austin community, with its more than 100,000 residents, is home to a number of prosperous businesses, such as Macarthur’s Restaurant, Ford Desired Real Estate, and the Shine King. But within the last two years, several upstarts have shut down.
What’s Poppin’, located at 5431 W. Madison, opened in 2003 as the community’s answer to mega-chains such as Garrett’s Popcorn. What’s Poppin’ closed in early 2005.
Jumpin’ Juice & Java opened at 6606 North Ave. in February 2005. The business was touted as a “coffee boutique.” It closed within its first year.
At least a half dozen new business in Austin have closed in the last two years. Some opened with high hopes. But it takes more than just available dollars for businesses to be successful, said Malcolm Crawford, director of the Austin African American Business Networking Association.
“They didn’t have a plan and didn’t understand the dynamics of how dollars leave the black community,” said Crawford, owner of African Accents, 5847 W. Chicago Ave.
The association, composed of Austin African-American business owners, estimates that a total of $200,000 has left the community from recently failed businesses.
Austin is the city’s most populated community with more than 117,000 residents. The average income in the community is $33,663, according to the U.S. Census. In addition, 46.7 percent of residents, age 16 and over, are employed. These numbers should spell financial success for business owners.
Advertising is essential
But getting a business off the ground is only the first hurdle.
Some of the common problems businesses face, Crawford said, involve poor planning, dwindling resources following their launch, and doing little or no advertising. Of those, Crawford said, one of the main problems is their failure to advertise. Not only that, they don’t seem to see the value in it, he said.
“That’s one thing they never factor in. They think word of mouth will get them over. But they can’t see the link between advertising and their bottom line,” he said. Allocating capital toward advertising, he said, should be a part of any business plan.
Other problems involve where their businesses are located or who owns the building, as was the case of Cream and Sugar. Most upstarts pay rent for a location, which adds to the cost of running their businesses. Cream and Sugar is currently in court with their building’s landlord. But their Madison location was ideal for them, said Chantel.
They want to stay on Madison but so far, the available spaces they’ve looked at aren’t zoned for a restaurant, she said.
“We want the community to know that we’re looking for a new location and we’ll be open pretty soon.”
Impact on the community
When giant retailer Sears Roebuck was scooped up by K-Mart last year, the direct impact on consumers was immediately felt. So is the case when other large businesses are merged with others, are downsized, or go out of business altogether.
But when a community business closes, the impact is almost immediate. Chantel Powell said she received calls and e-mails from several customers wanting to know why they were closed.
Cream and Sugar was not only an eatery, but had become a meeting place for churches, community organizations and just the everyday customer. The business also hosted events, such as its monthly poetry slam, sponsored by Austin’s Mars Hill MB Church.
“Poetry on the Patio,” which is usually held outside in the summer, used Cream and Sugar’s indoor space to hold their events during the winter months. Now those groups are scrambling to find another location. The Powells also had a salon in the same building two doors down from the caf. It too is closed.
“It’s pretty much a big headache,” said Phil. “Both businesses are suffering. We’re just trying to address what happened the best we can. What more can you do?”
Crawford said a failed business’ impact on communities such as Austin can be devastating. The dollars that leave communities don’t come back. There’s also a certain mindset consumers fall into, he said: that if you want something good, you have to go out of the community to find it.
He said he’s experienced such attitudes with his own African Accents store, which sells African-African apparel, as well as hosting events.
“They see a price and say, ‘That’s too high.’ And I say, ‘Compared to what?'” observed Crawford. “Now, they’ll go into a another community to buy something and won’t say a thing.”
Losing businesses to other communities
The communities where consumers go are not necessarily other black communities, Crawford noted. In fact, if a business closes in Austin, it’s not likely to open in another, said Erick Strickland, executive director of the North Lawndale Business Development Association, located in neighboring North Lawndale.
Strickland said he gets 5-7 inquiries a month from people looking for space, but most are people in the community.
“We work with entrepreneurs to find them space,” he said. “If some do come to us from Austin, we direct them to the Austin Chamber of Commerce.”
The Powells don’t want to leave Austin. Chantel has lived here all her life. Phil moved here with his parents as a teen. The two met and married while in Austin. They said despite how tough things are now, this is their home, and they’re here to stay.
Chantel will also take some lessons away from the situation.
“At first I was little discouraged, but now I’m more optimistic,” she said. “I’ll walk away from this as a learning experience.”