Trials & Tribulations of A Minority Business Owner
By Andal Balu | 07-29-2020
I had an opportunity to share the barriers I have faced as a minority business owner with FCIA members recently. We want to hear from you. What is your biggest hurdle or barrier and how did you overcome it? If you are having a tough time now, how can we help you?
I am sharing this with you all since people all over the world are struggling currently due to COVID19 pandemic. The purpose of this post is to show that there are hurdles in business regardless where you are located and what you do. It is also to motivate that with positive thinking and perseverance, you can overcome these hurdles and be successful. When you look back in couple of years, all your major struggles today will be less important but the lessons you learn to overcome these hurdles will help you throughout your lifetime.
As a minority business owner of CocoaTown and parent company Inno Concepts Inc.. we are in the business of creating chocopreneurs than in the business of selling machines. We empower our customers through education, equipment and evaluation tools.
One of the big hurdles I had to face as a minority business was access to funding. When the recession hit in 2008, we needed money to pay vendors as we had warehouse full of machines. We approached the bank that we had banked with for 16 years, where we knew all the branch employees and manager, but still we were denied a loan. Their explanation is that we did not have enough credit history. In the Indian culture, we were taught to live within our means and not borrow. So we had never borrowed money to run our business before 2008. Finally, some of our Indian friends loaned us money to pay the vendors and meet business expenses to survive the downturn.
Being a woman, it was also difficult in the early days to get training on troubleshooting and repairing machines. In 1994, when I approached the manufacturer of our grinders to learn about fixing the machines for our parent company Inno Concepts, they looked at me and asked if I was ready to use the tools and asked why my husband couldn’t just do it for me. I had to tell them that yes, I am experienced in using tools since my husband taught me how to fix cars and do woodworking. I also told them very clearly that I would be running the day-to-day activities of the business, not my husband as he was busy with his fulltime job. It took a lot of effort to convince them. So now I tell our customers – If I can do it, they can do it. If they know how to hold a screwdriver, they can fix their own machines – it is faster and cheaper.
I would say that my challenge in fine chocolate industry is not that I am a minority but I am different culturally. Being culturally different was hard initially to break into “Good old boys network”. Yes they bought our machines and were polite. But many of the key industry players were not friendly. I also did not know how to interact with them. Gender, skin color, my food habits (vegetarian, no alcoholic drinks), culture, accent all made it harder to connect with people.
Another difficulty was my facial gestures. In India, we turn our head left to right and back to left to say no and tilt the head left to right to say yes. In USA, if it is yes, you have to move your head up and down. This simple difference can bring misunderstanding in a conversation because people look at your body language than paying attention to the words you talk. I am trying hard to communicate right in different settings. In addition, the chocolatemakers thought that they were the experts. They were experts in the process but some of them were not experts on the machines. So when they had a question on the problem they had with our machine, if I tried to explain that it is not the machine related problem, they thought I am doubting their expertise. That turned off a lot of people. Again the communication style was the issue – nobody is at fault. I initially did not know how to be tactful explaining that they are not using the machine correctly. Cultural education would have helped us better.
Another barrier I see is for Black and Brown and women farmers around the world. These farmers grow cocoa beans and sell them for $1-2 per kilo because the large, multinational companies - largely owned and run by white males - take the bulk of the profit between the cocoa beans and the final chocolate bar. Farmers are not well educated about how to grow better, more valuable cocoa beans - In many of the countries when we ask the farmers what is a good cocoa bean, their answer is big bean good bean, small bean bad bean. The bulk chocolate companies buy the beans from them based on only the size and not the flavor. So it’s important to educate farmers about how to improve the flavor of their beans through proper fermentation and drying. A farmer selling cocoa beans for $1 or 2 per kilo when they sell in commodity prices can easily earn $20 -$100 a kilo for the processed product depending on their location, who they sell to, how much processing they want to do – do they want to sell chocolate or sell intermediary products – nibs or couvertures. And of course, this helps fine chocolate manufacturers as there will be higher quality of supply from small farms.
I still remember my conversation with a farmer in amazon region of Peru. When we told him that he can make chocolates, he asked fine – but where do I sell my chocolate? One piece of chocolate sells for 3 solos in the shop but my neighbor would rather spend 3 solos on buying lunch rather than spending on a piece of chocolate. We have to help them tap into a global marketplace. Most of the farmers in cacao growing countries are minorities and they are the ones who get least compensation for the amount of work they do. Big bulk chocolate companies are not teaching farmers even the fermentation process. Fine chocolatemakers are trying to help but in the whole world fine chocolate still accounts for less than 10% of the overall chocolate market. So it’s important to teach farmers how to enter the fine chocolate market - this helps them financially and helps all my fellow members in the FCIA.
From the time I joined FCIA in 2007, I was longing to see more minorities. As a company, we are trying to influence but we have limited resources. When I was chosen to be on FCIA board in 2019, I told Bill Guyton, that my vision is to empower more minorities in the chocolate industry. So I am happy today to be part of this panel to start the conversation and come up with action items.
These are the specific actions I would like FCIA to implement:
- Cultural education – Minorities need help and education on how to approach industry experts who do not look like them and how to communicate effectively with an audience with a different cultural paradigm. Similarly the experts who are willing to teach minorities have to be sensitive to the minorities’ culture and communication methods.
- Business Education & mentoring support for minority owned businesses
Educating them about the market opportunities
Technical support & business support for chocolatemaking
Marketing support: Featuring minority businesses in the industry publications /website
Have a goal to help at least 5 minority businesses a year – helping them raise money for start up expenses, matching them with mentors for at least two years (at least 4 hours a month)
Building awareness in the minority community
Especially now, given the challenging economic environment, creative ways of surviving the downturns
- Show the next generation how to make farming sustainable
- Teach farmers how to move up the value chain by fermenting and processing cocoa beans
- FCIA should be a liaison to connect talents and resources
There are a lot of resources to help minority owned small businesses, especially those run by women. However, it can be hard to find these resources. I encourage all small business owners in USA to get help from SBDC, SBA, and of course FCIA. If you are outside USA, check out and see what kind of Government programs are there to help small businesses.
Stay safe and Healthy.
"Loka Samastha Sukhino Bavanthu"
“May all beings everywhere in the universe be happy and free, and may the thoughts, words, and actions of my own life contribute in some way to that happiness and to that freedom for all.”