COVID-19 Hits Central Minnesota’s Somali-Owned Businesses Hard

Small, family-owned businesses are the backbone of the country. The COVID-19 crisis has presented many of them with one of their toughest challenges. Somali businesses across central Minnesota are among those that hard hit, but they also face problems unique to their ethnicity.

Provided they can weather this storm, they should seek to modernize their operations, boosting their business performance and productivity level so they are better prepared to survive the next downturn, whenever that occurs.

Somali eateries are open for delivery and takeout only in keeping with Governor Tim Walz’s order banning on-premises dining at restaurants and bars throughout Minnesota. This situation has caused hardship for Somali restaurant businesses.

Abdi Abukar has owned and cooked at his restaurant on East Saint Germain Street in St. Cloud for more than 15 years. He’s open for takeout only now. Although he’s a member of online and mobile delivery services Grubhub and Food Dudes, his business is losing substantial income as the numbers of repeat customers continue to drop drastically.

“The bulk of our consumers now avoid crowded areas and are taking the pandemic very seriously. That’s why we lost massive revenue,” Abdi said.

Some restaurants are operating with a reduced workforce. Haji Elmi, who operates the family-owned New Gyros at the Division Place Shopping Center, St. Cloud, said the business reduced its working hours per the governor’s stay-at-home directive. Foot traffic has decreased and revenue has stagnated. Haji said that his native-born customers were mainly from now-closed businesses in the vicinity.

Many beauty salons and barber shops are also closed. These business closures have exposed myriad challenges exclusive to minority entrepreneurs in the St. Cloud area, including a lack of online presence; a modicum of language and technical support; and a reluctance to take out loans that charge interest.

Poor online presence: Very few Somali-owned businesses have an online presence. Many restaurants and other retail businesses lack websites and do not offer online ordering. This lack of virtual presence has greatly hamstrung traditional Somali businesses. Even the few Somali businesses that do have a limited social media presence do not engage customers or cultivate their brand much online.

No drive-through infrastructure: Another hurdle small Somali-owned businesses face––particularly restaurants and coffee shops––is that their buildings were not set up for drive-through service.

Many cash-strapped entrepreneurs lacking delivery systems and drive-through infrastructures, or the ability to compete with larger franchise chains have made the hard decision to close their businesses. Among these is Nori Cafe & Creamery, a woman-owned coffee shop. It has drawn a diverse clientele to its location at the Northgate Shopping Center in St. Cloud in the little more than a year since it opened. It may not reopen if it doesn’t receive financial support. “If we do not get a grant or assistance program to shore up and salvage our business, we will have to close our business, even after stay-at-home restrictions are relaxed,” said owner Farhiya Iman.

Loan with interest: Most business owners are uncomfortable seeking or taking out a loan charging interest. However, some are comfortable taking out a forgivable loan to help them survive during the COVID crisis.

Language and cultural barriers: It is clear that federal loan programs are a lifeline for small retail businesses. Nevertheless, not everyone who could benefit has applied for, or received, relief. Many non-English-speaking business owners have difficulty navigating federal and local relief programs due to language, cultural, and technological barriers. Also, many business owners––especially small, family-owned enterprises––are technologically illiterate, oblivious to, or unaware of, the availability and importance of relief programs.

Poor technical assistance: After interviewing more than 10 business owners it became clear that minority owners have more trouble than non-minorities finding the loans they need for their business to survive. “We need to get financial and technical resources to sustain our business,” said Abdi Abukar. Unfortunately, even those few entrepreneurs who are open to securing loans may have some difficulty in finding technical support while applying for loans online.

Many business owners expressed dismay over a lack of information regarding how to get rent relief, how to apply for forgivable loans, and how to ascertain whether they are even eligible for such programs.

Challenge to attract native-born customers: Almost all minority-owned retail businesses and restaurants have had difficulty attracting non-minority clientele for decades.

In order to understand this issue, it is important to look at two realities.

Somali-business owners have not taken much initiative to grow their customer base beyond East African consumers. And native-born individuals have been hesitant to shop in areas where Somali businesses have been concentrated in ethnic neighborhoods.

A few Somali-owned businesses that have attracted diverse clientele are currently struggling with rent payments. Haji, of New Gyros, said that his business is facing an uncertain future since the stay-at-home directive has decreased his foot traffic and revenue is stagnant. “We’re fighting to stay afloat,” he said. “Our sales and earnings plunged while all other bills––rent and other utility expenses––are gradually adding up.”

Another business owner, who asked to remain anonymous, said he managed to negotiate a rental deal with his landlord amid the COVID-19 crisis, but he was concerned that he will not be able to pay back accrued rent when the shutdown ends. The future for his small, family-owned business looks bleak at the moment.

In a nutshell, we are keenly aware that our small, family-owned businesses are the pillar of the country, and that they are now grappling with one of their toughest challenges. In order to ensure that businesses run smoothly, sustain a steady cash flow, and streamline their operations, Somali business owners should adopt technology and build an effective online presence.

This is the right time for the Somali business community to discuss ways to tackle post-coronavirus challenges and to prepare for future crises.