Armed with data, local groups aim to boost minority business ownership

Arturo Chavarria Sr. could cut hair at a quick clip, typically getting through 30 to 50 haircuts in a single day at a rate of about 15 minutes per cut. Working long hours alongside his wife, who’s a stylist, Chavarria gained a reputation as one of the fastest barbers in South Texas, where he operated his own shop. “He was probably the last of the old-school barbers,” says his son Guadalupe Chavarria. Guadalupe moved here in 1995 and now owns Studio Chavarria in downtown Asheville.

Chavarria Sr., who passed away a couple of years ago, instilled a strict sense of responsibility in his sons, who would spend time doing chores around the shop. Growing up in a barbershop made haircutting come naturally to the brothers, says Arturo Jr. It also ingrained a certain business philosophy.

Their father believed in maintaining a family-oriented atmosphere. “There’s a time and a place for foul language, and this is neither the time nor the place,” Guadalupe remembers him saying. “He was really adamant about that.”

Arturo Jr. hopes to bring his father’s approach to South Asheville, where he’s planning to open his first brick-and-mortar location after working as an independent contractor.

Through Mountain BizWorks, Arturo learned that there are very few barbershops in that area, making it a prime location for a new shop. The long-running local nonprofit also helped him assemble the financing.

Mountain BizWorks provides training as well as small loans to both aspiring and current small-business owners. Now, however, the nonprofit has a new tool that it hopes will bolster business growth in Asheville — particularly among historically underrepresented groups.

A report titled “Economic Leakage Study of the Asheville MSA” provides data that speaks directly to the issue. Sponsored by the Western North Carolina New Economy Coalition and funded by Mountain BizWorks and the city of Asheville, it identifies a long list of industry sectors that represent potential local business opportunities. NEC members include the Asheville Grown Business Alliance, the Center for Local Economies, the Eagle Market Streets Development Corp., Green Opportunities, Just Economics, Mountain BizWorks, the Self-Help Credit Union and others. The coalition hopes to use the study to boost the number of minority-owned businesses here by helping aspiring entrepreneurs identify economically viable possibilities.

A business of one’s own

There are 44,937 businesses in the Asheville metropolitan statistical area, which encompasses 446,840 people in Buncombe, Haywood, Henderson and Madison counties. According to the study, the overwhelming majority of those businesses — 40,714 — are owned by white residents. Black residents own 1,037, and Hispanics account for an additional 1,175.

The new study, however, indicates that this breakdown is out of sync with the area’s racial makeup. Although roughly 4.2 percent of the Asheville MSA’s population is black, those residents account for only about 2.3 percent of local business ownership. Similarly, some 6.6 percent of the local population is Hispanic, but they constitute just 2.6 percent of business owners. In contrast, 85.9 percent of the Asheville MSA population is white, but 90.6 percent of the businesses are white-owned.

“Black business ownership is essentially invisible in Asheville. We’d like to see that change to where they have equal representation in the market as all entrepreneurs,” says Patrick Fitzsimmons, Mountain BizWorks’ executive director. “Entrepreneurship is a way for people to step up out of poverty. It’s one avenue for those people who have entrepreneurial zeal.”

In addition, says Moriah Heaney, the nonprofit’s communications and development associate, “By creating your own business, you are accumulating more net worth and you’re creating assets that are much more transferable to the next generation. … You’re allowing the ability to create wealth, not only for yourself but for individuals you hire, as well as an entity that’s much easier to transfer to another generation, either through your family or in your community.”

But in Asheville, says Fitzsimmons, about 80 percent of African-American business owners are sole proprietors, meaning they typically operate out of their homes. And on average, they generate less than one-tenth the annual sales of their white-owned counterparts, according to data compiled by Mountain BizWorks. White-owned businesses average $428,000 annually; for Hispanic-owned businesses the figure is $163,000, and for black-owned businesses, it’s just $40,000.

“This number is the most concerning,” says Matt Raker, Mountain BizWorks’ director of community investments and impact.

The problem isn’t limited to Asheville, notes study author Debra Jones. “Certainly, on a national level, what we’re seeing in the Asheville MSA is very common, and it’s one of the reasons why there are minority business development programs, because those disparities exist across the board.” Jones is the founder and president of TEQuity, a Durham-based management consulting firm.

Beyond the hard data, Jones also interviewed local minority business owners and business development organizations about the area’s economic ecosystem. The study includes several pages of bullet points summarizing the problems those business owners face.

Those interviewed cited a need for better access to capital as the No. 1 obstacle. They also said they’d like to see more efforts to inspire entrepreneurship among youth and a greater show of support from city and county governments, questioning whether local political leaders see helping minority businesses as a meaningful way to advance Asheville’s economy.

The coalition has made an effort to disseminate this information through a series of workshops. The group will hold another workshop on Thursday, July 26, 3-5 p.m. at the Edington Center, 133 Livingston St. in Asheville about the results of the study, offering business owners and entrepreneurs the opportunity to learn more about how they can use the data to grow their businesses.

In transit

Raker, however, cautions that the potential opportunities the study identifies don’t guarantee success. “These are just a couple of signals,” he stresses. “The data doesn’t mean that it’s a hard and fast ‘Go invest your life savings in this’ kind of thing.”

Nonetheless, Mountain BizWorks has already been using the information to guide the aspiring entrepreneurs who come to the nonprofit for help. The organization has also held a series of workshops designed to inform members of the local business community about the study’s conclusions.

Released last August, the study compares the Asheville MSA to 12 others across the U.S. that have similar populations. Averaging their characteristics to create a benchmark, it points out that certain sectors of the local economy are already thriving. For example, Asheville has more than three times as many retirement communities as the benchmark would project. The Asheville MSA also has more than twice as many bookstores and 45 percent more beer wholesalers.

At the same time, however, the study suggests there are many goods and services that are being provided by businesses outside the Asheville MSA rather than by local entrepreneurs. For example, this area has only 14 percent of the expected number of barbershops.

One of the local sectors showing the most growth potential is transportation, an opening that Wakina Norris hopes to fill with a startup she’s developing called Mommy Mobile.

“If you have a whole lot of kids, dragging them on the bus is really hectic; it’s not always easy,” says Norris, a doula who is African-American. Public transportation, she continues, can be a hit-or-miss alternative for getting your kids from point A to point B. She hopes Mommy Mobile will offer parents and pregnant mothers a controlled environment for traveling from one place to another.

Data in the economic leakage study suggests that a service like the one Norris has in mind could be lucrative. Despite 58 percent growth in such businesses between 2010 and 2015, the area still has 35 percent less motor transit activity than expected based on the benchmarks.

The study ranks the local business opportunities it identifies on a scale of 1 to 10, with the higher number representing the greatest growth potential. Bus and other vehicle transit systems have an opportunity score of 10.

Room to grow

Guadalupe Chavarria says he arrived in Asheville before the city’s massive population growth spurt. “There were very few people who lived and worked downtown,” he remembers. “And very few people my age who could afford to live downtown. It was more for elderly, retired people who could afford condos.”

Arturo, who moved here soon after his father died, says his roughly 25-minute commute to work takes him along Hendersonville Road. “They’re building a lot of apartment complexes there,” he notes, adding, “Traffic has doubled in the last year, year and a half.”

Guadalupe remembers his brother being shocked by how few Hispanic-owned businesses there were in Asheville compared with South Texas, a disparity that reflects the two areas’ dramatic demographic differences.

For her part, Norris believes there aren’t enough minority-owned businesses in the Asheville area, but the challenge doesn’t deter her. “It’s what you put your mind to,” she maintains, adding, “That’s my biggest thing.”

Editor’s note: This article has been changed from the original text, which ran in the June 27 print edition of Mountain Xpress, to more accurately reflect the nature of Arturo Chavarria’s new business, Arturo’s Barbershop, which will open in the coming months on Hendersonville Road in South Asheville.