How building wealth in Black communities in Louisiana means going into business | Business

Dreams of running a business together came true for Kimberly and Lance LaMotte when the pair invested in a boxing club franchise in Baton Rouge.

Kimberly, an attorney, and Lance, a cardiologist, had been interested in a fitness center for years, but the inspiration struck after they took a boxing class on a vacation away from Louisiana during the raucous Mardi Gras season for some respite. Title Boxing Club Baton Rouge, off Airline Highway and Antioch Road near Long Farm, was incorporated in July 2019. 

The boxing club investment rekindled the couple’s aspirations of opening a pharmacy together, something they first thought about after being study partners early in their relationship. Now, after their day jobs, they strategize about how to cultivate and grow the business together, both holistically and monetarily. 

“I wouldn’t say success is a dollar amount; … it’s about leaving a legacy,” said Lance LaMotte. “I think (this business) teaches (our kids) a lesson that you don’t have to limit yourself to your primary field of study or be limited by your profession and can expand to the business world. I tell my kids to be humble and that they are no better than the janitor but as smart as the CEO.”

Boxing as fitness rather than competition or fighting is an outlet for many struggling with emotions or stress, the couple said. 

“It’s about providing a space to work through trials in life,” said Kim LaMotte. “The bag could be Alabama on game day or it could be a loss or an illness. You don’t know what people are fighting in their personal lives.”

The LaMottes are Black Americans who invested in their own education and later decided to focus on building family wealth, with a social impact and inclusivity in the community. 

“We are not just checking a box, we’re all in,” Kim LaMotte said.

Potential ideas — like the LaMotte’s dreams — to build more wealth among families in Black communities across Louisiana was the focus of a recent economic development conference hosted by the Center for Planning Excellence in Baton Rouge. The conference explored more “conscious consumerism” for those who want to support Black-owned businesses in the region.

Ways that can be done, participants said, are through doing direct business with them, government contracts and import-export activity, while also creating homegrown businesses, tapping franchise opportunities and building destination businesses that can attract customers to an area and by supporting Black-owned banks and accelerating growth.

Building wealth inside of a family is not a new concept, but it’s been a key economic development lever to many groups of people who might be marginalized in a community, such as minorities, women and military veterans.

Now there is a wave of social justice discussion in the business world and how that relates to economic prosperity and opportunity — the reality of which has been laid bare during the coronavirus pandemic as hundreds of thousands of people remain out of work and businesses have struggled for months.

Government contracts 

The public sector has led efforts to increase small-business participation, especially those headed by historically marginalized individuals, as federal state and local governments seek to more equitably spread spending on taxpayer-funded projects.

Baton Rouge city-parish government conducted its first public contracting disparity study last year and has since sought to sign more contracts with a wider variety of businesses. 

While 41% of businesses in East Baton Rouge Parish are owned by minorities and women, only 4% of total spending went to those businesses and only 1% went to veteran-owned companies between 2013 and 2017 across 11,000 contracts and totaling $2.4 billion in taxpayer money. 

Meanwhile, roughly half of the East Baton Rouge Parish residents are Black. Income growth in Baton Rouge has risen in recent years, but Black households earn on average only 54% of the earnings of White households in Baton Rouge, according the Baton Rouge Area Chamber.

In the private sector, the path is less linear and can be more abstract. Even the concept of building wealth can seem vague but economic development leaders suggest that some “conscious consumerism” along the way and being open to understanding different cultures without judgment is one solution forward.

‘Destination’ businesses

Byron Washington, a local community activist in north Baton Rouge, is interested in attracting more “destination” businesses as an economic development strategy. 

Washington is a native of West Baton Rouge Parish and holds a bachelor’s degree in economics from the University of North Texas and MBA from Southern University, with a specialty in supply chain and logistics. 

The goal would be to attract more franchises, such as the 24-hour doughnut shop Krispy Kreme that draws customers to Plank Road.

The way for Black communities to build wealth would be for the franchise owner to be a local resident looking for access to wealth instead of an outside franchisee looking for another passive investment property, he said.

But there are also local independent retailers that can attract customers from across the region as a destination store, an example being the popular Tony’s Seafood in north Baton Rouge, also on Plank Road. 

“We have some niche markets. What drives people here is going to be our culture, food, music and togetherness. Now it’s important to try and get people to stay and grow,” Washington said. “You can make a decision with your heart and your wallet.”

Exports and imports

Another suggestion was for the Louisiana Economic Development department, which has an international commerce arm, to connect with local business owners looking to import or export products to Africa. There are “‘sister cities” agreements meant to establish trade and commerce that other economic development professionals use to build the economy. 

“When people say international trade, they do not often include Africa,” Washington said. “States like Louisiana and Mississippi have two of the largest Black populations in the country. Africa has many car manufacturers who would love to have Louisiana. We have to zig where people zag. We just have to find our space to play.”

The state has been active on economic expansion internationally and already supports the Louisiana Alliance for Economic Inclusion. LED’s state trade expansion program had 37 participants as of last year and inside that figure 27% of those companies identified themselves as minority or woman-owned small businesses. As a result, the program’s small-business owners generated $20.5 million in export sales from Louisiana. 

“Equity is not only a matter of social justice; it is an economic necessity,” said Don Pierson, secretary of LED. 

Beyond that, the state is actively brokering relationships between the federal government, state leaders and local chambers. During a recent visit by the leader of the U.S. Small Business Administration, chamber of commerce leaders shared concerns and needs from small businesses in various communities. 

The coronavirus pandemic has been a unique opportunity as the nation faced stay-at-home orders and commerce has shifted largely online. 

“Coronavirus has allowed us to slow down and be diligent about our spending. This is about refocusing and strategizing,” Pierson said. “If I want to go and buy some wine, I can slow down for a second and go on my phone and get it there. Because of coronavirus, I can wait a few days.”

Supporting Black-owned banks

Being conscious about where consumers are spending their money could even extend to religious service donations. For example, the offerings on Sundays could go into Black-owned banks on Monday morning, said Maggie Anderson, the co-founder of The Empowerment Experiment, which encourages Black residents to support other Black-ow
ned businesses.

“We’ve always had to push and prod America toward its promise of greatness,” said Anderson, who is a former McDonald’s executive and studied law under then-professor Barack Obama.

For New Orleans-based Liberty Bank, which was founded in 1972, the financial institution was created to offer open access for bank accounts and home mortgages during a time where not all businesses were inclusive or open to all customers. 

Alden J. McDonald Jr., president and CEO, has watched the Black-owned bank grow from $2 million in assets. This year, Liberty Bank’s assets stood at $737 million in the second quarter, making it the largest Black-owned bank in the nation when ranked by assets.

The bank has grown to 160 employees and has a high percentage of African American commercial lenders, which is one way businesses access capital to grow. The sweeping social justice consciousness has been a boost for the bank, which has seen a flood of inbound interest for partnerships, capital and customers. 

“A lot of people are beginning to spend their money where it can shape policy decisions,” McDonald said. “We do online banking across the country and most people don’t care what color you are as long as they can get a loan and a good interest rate, which has made some things colorblind, which it should be.”

A few months ago, a West Coast church group approached Liberty Bank about opening accounts there and then invited hundreds of its affiliated churches and their members to do the same, which is possible through online banking and branch locations in eight states. 

Building wealth in Black communities is an issue near to McDonald’s own family. His father was a waiter who wasn’t able to leave an inheritance and had suggested his son work at Liberty Bank in the 1960s. 

“The attention that has been given to Black-owned businesses is a good thing because the economy itself is going to grow if these businesses prosper,” he said. 

During the sweeping civil rights movement of the 1960s, many individuals already fought to integrate the nation racially so that anyone can shop at big-box stores or eat at any lunch counter, but it’s not enough now that children understand they can shop anywhere, but also own those same businesses someday through building wealth, said Anderson.

Homegrown businesses

It’s not just about individuals understanding they are allowed to shop at mainstream retailers like Sears, he said. 

“My children need to know that they can own Sears,” Anderson said. “Black people own banks, wine companies, make great whiskey and hair care products, are fantastic lawyers. The more people we have in those positions the more we can push that truth. It’s not just there’s more money going through the community. It’s with that money comes security, cleaner neighborhoods and better role models for the kids and sends a statement to the world that Black people can do anything.”

Stores’ customers can suggest Black-owned consumer brands in local shops and even big-box stores, leaders suggested. There was a time when more African American hair product brands were owned by people of color before significant consolidation in the market. An example is Madam C.J. Walker, who was the first Black woman in the U.S. to become a self-made millionaire. Her maiden name was Sarah Breedlove, and she was an inspiration to Kelli Palmer, a Baton Rouge native who honored the name by founding Breedlove Beauty Co. in 2016.

The online natural cosmetic business has more than 100,000 followers on Instagram and sales have grown in recent years so the business can support two employees. Future plans might include opening a brick-and-mortar spa or getting on store shelves of wellness-centric retailers like Whole Foods. 

Palmer, who has a young daughter, said she wants to build the business and make sure she has some wealth to pass on. 

“The truth for a lot of Black families is that they don’t have anything to leave their kids,” she said. “I definitely want to build a global brand.”

Palmer described her childhood as challenging, since her mother died when she was young. Her father isn’t expected to pass down a sizable inheritance, but she sees a different future for herself as a small-business owner. She earned a bachelor’s degree at UNO and a master’s at Southern University. She then worked at LSU until she quit to start her natural products brand with just $500 in supplies.

“We have been super busy. People are being more conscious, and we literally are getting asked 100 times a day if we are Black-owned,” Palmer said. “I’ve never marketed my business as a Black-owned brand before but it’s good to see people put their money into the community.”

Likewise, Olé Orleans Wines has seen demand for sales skyrocket in recent months as residents stay home and look to entertain themselves. The business was founded in 2018 by teacher Kim Lewis. Sales had been steady but have grown significantly recently. 

“I’ve been so busy I’ve been missing sleep,” Lewis said. “It’s been so busy in the last five to six weeks. I wish it wasn’t just because of a movement, but I’m grateful for the support.”

Lewis is the first person in her immediate family to run her own business, let alone several companies over her career ranging from a mental health rehabilitation business to a trucking and transportation company. She didn’t inherit any wealth either, rather tucked away money while working several jobs as a divorced single mother and invested in herself.

“I always tell everybody, if I’m going to take a risk I’m going to take it on myself,” Lewis said. “Being Black, the opportunity doesn’t come to you. It’s not something that’s given; you have to build it, but I’m not just building it for me but my children to be an example.”

Olé Orleans Wines grapes are mostly grown in Monroe and processed at her urban winery in New Orleans as a Louisiana product. A deal in the works could bring her wine to Louisiana store shelves at a major retailer. Lewis, who is pursuing an MBA, has plans to expand into distilling spirits someday and host tours of the winery after the economy and travel resumes.

She has four employees for now, with just one person full-time, and the rest seasonal. Those ranks may grow depending on expansion efforts. 

“I want to see this grow into something really big for Louisiana. I would love to have tour buses do tours,” she said.

Accelerating businesses

Local leaders are looking to emulate a minority-owned business accelerator program in Cincinnati, which grooms businesses to scale beyond $1 million in sales.  

“It’s created jobs; it’s created wealth and community impact,” said Adam Knapp, CEO of the Baton Rouge Area Chamber. “It’s a virtuous cycle that was started through their program. We think that’s a good example.” 

Building businesses with $1 million in sales or more, then scaling those companies to be large enough to offer internships for others in the community is another economic development metric leaders are looking to cultivate. 

“We see that internships are often given within affinity groups. If we are not having businesses that are expanded enough, we can’t offer real-life experience opportunities and our kids are not in that pipeline,” said Tyra Banks, an innovation and partnership catalyst at MetroMorphosis, a nonprofit focused on economic development in Baton Rouge. 

The goal is for Baton Rouge to grow its base so there’s not just a handful of minority-owned engineering firms but a plethora of different types of businesses available for both public sector and private sector contracting, she said. 

“We gotta patch the holes in Black boats so that rising tides can lift our ships,” Banks said.