- Welcome to "American Black Journal".

I'm Stephen Henderson, your host.

For the past year, the nation's economy has been really rocky with rising prices and the threat of recession.

What impact does that have on small businesses that are still rebuilding from the effects of the pandemic?

The Lee Group's ninth annual Small Business Workshop is gonna offer some answers in a free virtual seminar on May 24th.

I got a preview from the workshop's founder, Mark Lee, and Dave Girodat of Fifth Third Bank, which is the event's presenting sponsor.

Mark, I wanna start with you.

This is the ninth time you've put on this Small Business Workshop, and each year, there seems to be yet another challenge to small businesses.

But I want to start by talking about over time what you've seen and learned from all of this about how small businesses can adapt, how they can kind of be nimble.

Because each year there is either a new challenge or an old challenge that's revisiting us.

It's never smooth sailing if you're out there trying to make a go of it.

- Yeah, I couldn't say it better.

Every time we think we get beyond one phase, there's another phase that's coming along.

So over the nine years of the workshop, we have seen fluctuations in the economy.

We have seen changes in terms of issues affecting small businesses, and this year is no different.

This year, for example, we're noticing the economy.

There seems to be some uncertainty about the economy.

Although the inflation rate has come down, unemployment seems relatively stable, small businesses still have some issues to deal with.

So this year is no different.

Every year we do the workshop, we think we're moving past the asked issue, move to another level, but then we turn around and we have another issue.

And this year is still different.

We're talking about uncertain economy.

- Yeah.

Dave, on your side of things, you also see the things that small businesses contend with year after year, the things that come and go and then the things that kind of resurface.

Give me your assessment of what small businesses are facing right now and how something like the Small Business Workshop can really help them figure it out.

- Yes, Stephen.

So first, one, we're really excited to be participating with Mark for our ninth year in the Small Business Workshop.

And this will be unique.

We sat through times of pandemic and we talked about how to navigate and now we have new issues, and that is a very much an inflation-driven environment, a rising cost to capital.

We still see labor challengers and labor cost moving up and it is gonna be a far different world for a while and people are going to have to adapt.

This isn't the world of zero interest rates and free money.

We're gonna have to see a pivot of how you run your business.

And that's where someone like Mark and Fifth Third as partners are gonna help educate and give some strategies and thoughts about what to do different.

Because whatever you're doing, don't do it the same way you have been.

You gotta think differently.

- Yeah, I mean that's pretty bold advice.

I mean, pretty stark advice really, that things are changing enough or are desperate enough that people really can't just kind of sit tight.

Mark, tell us a little more about what exactly is going on.

I mean, I know that inflation is killing everybody still.

It's better, but things still cost too much.

But the labor market, which Dave mentioned, is an an added challenge for businesses.

What else are businesses really struggling with right now?

- I think quite frankly, excuse me, I think businesses are struggling with finding customers, having customers come back to the storefront, number one, and also still struggling with how to leverage technology.

Yes, technology is truly a part of our day-to-day operations now, but think about the number of customers that the small businesses lost during the pandemic, and thank goodness we're moving past the pandemic now.

But the challenge is how to get those customers back.

Are your services still relevant in this new day and age, so to speak?

So businesses have to deal with that.

You just mentioned inflation, inflation, things are still costing more.

And how do you manage your finances to ensure that you're doing things in a cost effective manner?

And I will certainly argue that the tight labor market, I was talking to someone the other day, quite candidly, a small business who says the challenge that he's having is that employees are ghosting him, that one day they're there and the next day they just don't show up.

Those are all challenges that are still out there in this new world so to speak.

- So let's talk about the workshop and the things that you expect to be able to help folks with this year during the workshop.

What's the focus gonna be?

- Yeah, I'm gonna first of all thank Fifth Third Bank, ninth year, they've been with me since day one.

They do a great job, and in fact, we're gonna focus on navigating a business during an uncertain economy and people can expect to hear from the chief market strategist from Fifth Third Bank is gonna give us the state of the economy.

Is there gonna be a recession?

What impact does inflation have on your business?

What are the other challenges out there?

Is the economy expanding?

Is it contracting?

What is it gonna be?

You don't wanna miss that conversation.

We're also gonna have panelists from across Detroit business leaders who will be joining with us a workshop and they're gonna provide practical solutions to Dave's point earlier to your questions earlier, what can you do to navigate these challenges as we look ahead towards 2023 and beyond?

And then I'm gonna have a fireside chat with a business CEO, Bruce Smith, who's the president, chairman, and CEO of Detroit Manufacturing Systems.

He has 1,500 employees in Detroit.

He's a minority owned supplier.

He's doing great things.

You don't wanna miss that fireside chat.

And of course we have individual workshops with business leaders from across Detroit where people can sign up and just go and really hone in and ask specific questions and fine tune and hone in on specific issues that need to be addressed.

- So Dave, of course the lending environment is always a challenge for small businesses.

It's an additional challenge here in Detroit where we have had less access to capital I think for small businesses than we've been able to achieve in some other markets.

I want you to talk about what that looks like right now and how these things like inflation or the tight labor market, the other challenges that small businesses are facing are affecting the lending market.

We still have this incredible need for capital for people to grow their businesses.

What's that looking like these days?

- Stephen, that's where probably all of us are concerned.

And if you listen to a lot of the smart people out there will tell you that the economy could retract, you could see capital tighten, and as an institution, we're watching it very closely.

Our job though is to really service our client and needs.

So we're being very diligent in our underwriting and we're making sure we make good decisions around our capital and with our shareholders, but it does start with the client and we're recognizing that the small business access to capital is one of the areas that can get hurt quickly and fast.

But the great thing is there's great tools out there with the SBA administration and I think those are things that one of the people on the panel is an expert from Fifth Third in that space because if we don't feed that area of the economy, it's just gonna perpetuate the problems.

It's gonna accelerate things getting tougher and slower if small business does not excel and grow.

So we'll continue to encourage it, but we're gonna be diligent, but retraction of capital, we're not seeing it yet, but now is a good time to make sure your store's in order as a small business owner.

So you're prepared if things do get a little more difficult with your access to the dollars you need.

- If I can just chime in one second, Steve, your business should be, it should not be the exact same business model today that you had three years ago.

You need to continue to fine tune based on the potential headways ahead of us, continue to fine tune your business.

You should not be sitting still because if you sit still, those headwinds will not go away.

- That's right, I agree.

- Go ahead Dave.

- I'm sorry.

- No, no, go ahead.

- Not to make it sound bad out there is I love to see businesses excel by growing, cutting your way to prosperity is not a good long-term strategy.

That's why we're just gonna emphasize making sure your house is in order and make sure you made the good decisions.

And back to Mark's point, look for ways to grow your business, alter how you do business.

You'll be more efficient because a strong top line is gonna get to a much better bottom line than just trying to cut the cost out in the middle.

- Mark, I wanna have you talk a little about Detroit in particular and the challenges that you see and that you are hearing from small businesses here in Detroit.

We have a lot of people who are concerned about places like downtown and how it comes back in a business sense.

I mean, I think in an entertainment sense, if you go down there at night, it feels a little more like it did before the pandemic, but in the daytime you really notice the number of places that are either gone or just don't have physical presences anymore.

What are you hearing from businesses about the climate here?

- The climate quite frankly is still a challenge, is still very difficult I think, again, I talked to another entrepreneur who eventually went out of business, this was in the last month or two, and I asked her why and she's just east of downtown, her business was, and she said, "again, Mark, we just did not get those customers back."

People got used to the virtual environment, she started using her virtual environment, but quite frankly, the competition was even that much stringent.

It was that much a challenge for her.

So the customers that she really needed to come back did not come back.

I say that to say I'm an optimist.

I think that businesses will come back, but right now we are in a challenged environment.

Downtown is doing relatively well.

Southwest Detroit with Corktown is doing very well with the whole Florida investment, the other parts of the city, they're still grappling.

I know Fifth Third is doing great things in their neighborhood to get some of those businesses back to the people, right now, there's still a challenge, no question, to get them back up and running where they were before.

- When you think about opportunity spots in Detroit, you've mentioned Corktown.

What's happening there with the revitalization of Michigan Central, the book depository, it blows my mind when I go down there.

I feel like there's a new business opening every week in that area of the city.

Are there other places that you would say small businesses could find the opportunity to get more of a foot traffic and crowds and the things that they need to support them?

- Absolutely, 7 Mile (indistinct) six to eight mile corridor is very hot right now.

It's extraordinarily hot.

But I wanted to defer to Dave because I know that Fifth Third has made a couple strategic investments in neighborhoods and he can address that question from Fifth Third's perspective, Dave?

- The strategic neighborhood fund that was created by the city that we are a contributor to, we adopted as we call it the G7, Gratiot 7 neighborhood.

And we are very focused there.

In fact, right now they just got approved for facade grants and renovations and fix ups to small businesses.

That Gratiot corridor is still really an opportunity and strong.

You think about that's the gateway into the city.

If you're not on one of the expressways on the east side, the the 7 Mile Gratiot area, there is retail, there is opportunity, and you have the revitalization of neighborhoods starting to take place.

We're seeing home ownership come back there versus transient rentals.

It's a combination of we need that foot traffic.

This is, you're referring to downtown or Corktown.

You look at what's going there residentially, our neighborhood focus is one of that.

We wanna rebuild it with small businesses.

We want home ownership.

We want that old feel of when we all grew up we'd walk to the corner store at the end of the street, and you need that.

That's gonna be a small business guy.

It doesn't have to be a Fortune 500.

So we're optimistic, but we are starting to see that type of activity in our neighborhood that we adopted and very very proud of what we're doing there.

It's been going on for a while.

- No, I'm glad to hear you lift that up.

It's an area of the city that is changing, where there is investment, and I think a lot of people who either live in the city or live in the suburbs don't really think about Gratiot 7.

They don't think about that side of the city and what's going on over there.

So people should go check it out and see about the opportunities to invest.

Mark Lee and Dave Girodat, congratulations again on nine years of the Small Business workshop and-- - And Stephen, I could say very quickly, the Small Business Workshop is May 24th from 8:00 AM to 1:00 PM.

Thank you very much.

Appreciate that.