Editor's Note: In honor of National Small Business WeekInc. is exploring clusters of small companies around the country that share distinctive strengths, challenges, and characters. 

Welcome to Flint, Michigan: Home of the $20 baked potato.

OK, to be fair, the top-dollar item on Keysa Smith's menu is a $12.95 meat lover's potato. But, Smith says, some customers at Spectacular Spudz--her three-year-old tuber emporium in the Flint Farmers' Market--"put on so many add-ons like shrimp, cheese, and veggie mix that their potato is $20." 

A Flint native, Smith was in college studying culinary arts when an arrest for selling marijuana--followed by four-and-a-half years in federal prison--suspended her career plans. After her release she finished school and launched Spectacular Spudz as homage to The Potato Patch, a beloved Flint restaurant from her childhood. "Me and my mom created the recipes, and it took a year to perfect them," Smith says. "We make everything from scratch, right down to the Alfredo sauce."

Downtown Flint, once largely shuttered, is showing new life thanks in part to small businesses like Smith's. Square, the mobile payment-processing company, says since 2014 sales at its Flint clients have increased to $36 million from $10 million, and the number of new businesses that use its services is up 40 percent during that period. The company, which made a video about entrepreneurship in Flint five years after the water crisis, has provided nearly $2 million in financing--with average loans of $6,700--through its capital arm to small business in that period. "There's been a really dramatic change in the physical landscape and how the city is operating," says Erin Archuleta, a small-business advocate for Square and a Flint native. "Small businesses are really emerging, really thriving."

Also helping to revitalize the city is the significant public and private investment--most of it in the last two years, with $200 million in 2019 alone--that among other improvements restored the historic Capital Theatre, launched a culinary arts institute, created an incubator and co-working space called the Ferris Wheel, and built or refurbished numerous residential and commercial buildings.

Linnette Phillips is Flint's deputy director of economic development, a department that didn't exist until a year ago. In addition to other efforts, the city created a pilot program for pop-up businesses and one that combines entrepreneurship education with the opportunity to sell products to the public. "The next step is to assist those businesses with gap funding and connect them with some type of space," Phillips says. (Phillips had no concurring data on business formation but thought the Square numbers sounded about right.) 

There's still plenty of work to be done. Things have been bad in Flint for decades. With a median income of $16,544, it is among the poorest U.S. cities and has one of the highest rates of violent crime. The crisis that ensued when officials in 2014 switched water sources to save money--exposing residents to elevated lead levels and bacteria that caused illness and death--is still playing out in the courts and in public distrust. Bottled water distribution in Flint continues; replacement of lead pipes has slowed.

Starting a business in an impoverished city in the midst of a public health crisis sounds counterintuitive at best. But Flint's new founders have their reasons. Rents are low. Competition is scarce. And most important: The city they love really needs them.

Tony Vu, whose Vietnamese restaurant, MaMang, started as a food truck in 2014, says Flint's residents face a choice: "You are either part of the hopeful crowd who believes things are going to turn around or are part of the other side--bitter and jaded and almost heartbroken because you keep seeing this town and all these opportunities squandered."

Vu believes the burgeoning business community suggests that optimists are gaining ground. "It feels as though we are uplifting ourselves," he says. "After all this negativity, people are doing things that have Flint's best interests in mind."

Manis, pedis, and pride

Spectacular Spudz employs 10 people just to feed the lines filing through almost nonstop during the 18 hours a week the market is open. Even with that abbreviated schedule, sales last year totaled $315,000, enough to justify the restaurant's move to a 1,300-square-foot standalone space this summer. Smith is talking to a potential franchisee in Fenton, Michigan, and has had inquiries from Toledo, Atlanta, and Denver. She hopes to open three franchises in 2020.

That Spectacular Spudz is in Flint "was God's plan," says Smith. She originally hoped to start elsewhere, or at least launch from a food truck so she could seek customers in other cities if necessary. Then the Farmers' Market, which reopened downtown in 2014 and is among the city's prime drivers of entrepreneurship, offered to incubate her startup in its commercial kitchens. Other Flint-specific funding came through, including a grant from the Chamber of Commerce and an SBA loan that targets Flint companies, funded, in part, by Detroit Pistons owner Tom Gores. "All these opportunities kept falling in my lap right here," she says. "I never in a million years thought we would be doing this well right here after the water crisis."

While Smith contemplated leaving Flint, her sister, Natalie Kadie, wanted back in. In 2015, Kadie and her husband Alex were living in Flint Township, which is adjacent to Flint. The Kadies, who love to be around music and people, had always wanted to live downtown. The water crisis--and new construction that began earlier--meant lots of vacancies and low rents. "People told us we were crazy," Kadie says. "We said, 'Yeah, I guess we are crazy.' But we still believed in the city."

At the time Kadie was working as an independent nail technician at a salon in nearby Grand Blanc. On a trip to Detroit, the couple visited a nail bar offering manis and pedis in a pampering, social atmosphere. "It was doing great business," Kadie says. "And we thought, 'Oh my gosh, what if we bring something like this to our city? People are hungry for things to do.'"

Last year, the Kadies opened Eight Ten Nail Bar in a cool industrial space--huge windows, concrete floor--a block from their new-construction loft. They funded it through their savings and friends and family. Smith was among the early investors.

The first clients came with Kadie from her old salon. "Some of them were like, 'I don't know if I want to come downtown,'" she says. "'Are you terrified when you are there?' I'm like, 'No. I live there.'" All but one of her roughly 70 former Grand Blanc regulars now patronize Eight Ten. The business, which employs two additional nail techs and a receptionist, has more than 200 clients. 

Although Eight Ten is the only game in town, the Kadies still strive to distinguish it through exceptional service. There is complimentary wine and coffee. At customers' request, Alex will fetch food from nearby restaurants (including Spectacular Spudz). For older clients, he will park and retrieve cars.

Like her sister, Kadie plans to expand the business nationally--even globally. "We called it Eight Ten Nail bar because that is our area code," says Kadie. "We want to take Flint everywhere."

An oasis in the food desert

Nail bars and gourmet potatoes make Flint fun. Erin Caudell and her partner, Franklin Pleasant, are addressing a more basic need. The city is awash in food deserts: communities without access to fresh and nutritious food. "Lots of liquor stores and not many supermarkets," Caudell says.

Caudell, who has a degree in horticulture, and Pleasant, an engineer, are both from the area. In 2013, they started a farm outside the city called The Flint Ingredient Company, selling produce through the Farmers' Market. Three years later, they opened The Local Grocer, a store on the border between Carriage Town and University Village.

The Local Grocer specializes in fresh produce from the owners' farm and, to the extent possible, other Michigan growers. Some of its specialty items, including Withers Mountain Honey and lotions from Cindy's Beauty and Health, are produced by local makers. Flint Coffee Company roasts upstairs. An in-house kitchen produces, among other things, sustainable vegan and vegetarian meals.

Operating a business that sells typically high-priced items like organics and fresh meat is challenging in a high-poverty area. Caudell and Pleasant "have a variety of price points to address that need," she says. Some customers buy with their government-issued EBT cards. Also popular is a Michigan program called Double Up Food Bucks that gives qualified customers $1 credit toward fruits and vegetables for every produce dollar they spend up to $20.

Although there are no other grocers nearby and only one big chain store (a Kroger) on the city's outskirts, The Local Grocer still competes with the internet and big box stores further afield. Like many Flint companies it does so through community-building events like game and crafts nights. It also participates in city activities like Flint's ArtWalk and Restaurant Week--which are signs of resurgence in their own right. "Every time someone visits," says Caudell, "they are surprised to see these things going on."

The chef who mints chefs

For some small-business owners, community spirit finds expression in mentoring other entrepreneurs.

Tony Vu, the son of Vietnamese immigrants, grew up in a farm town just outside of Flint, and then attended high school there. He left in the mid-2000s, repulsed, he says, by the opiate crisis, which still bedevils the city. Using money saved from IT contracting work, he traveled to Peru and then Vietnam. It was both a spiritual awakening and a new direction. "My mind was set that I would do something with food and tap into my culture," Vu says.

Back in Flint in 2014, Vu bought a beat-up 1959 Ford step van and started a food truck, serving dishes made from his mother's recipes. It was a hit from the get-go. "There were times when there was a full-on winter storm, and we had a queue of people waiting to get their bowls while we were inside the truck trying to stay warm," he says.

Four years ago, Vu moved his business, now called MaMang, into the Farmers' Market. On days the market closed he began hosting pop-up events featuring other local chefs. He named that series, which routinely sold out, the Flint Social Club. Last year, he adopted a mentorship model, throwing five- or six-course dinners staffed by 10 chefs--some professionals but many culinary school or even high school students. "Everyone was learning from each other: the different aspects of how to run a kitchen, how to time it all," Vu says.

Recently, Vu bought a building downtown to house both MaMang and the Flint Social Club. It will have two kitchens, one with a pop-up space attached. The Club will sponsor six-week mentorship programs, each with six chefs interested in starting their own food businesses. Vu will give some chefs their own pop-ups and mentor the best of those in a food truck. Finally, he will introduce them to local lenders and help them seek grants. He expects to dedicate roughly 5 percent of MaMang's sales to the program. (Sales in 2018 were $118,000 during the Farmers Market's limited hours of operation.)

Vu's specialty is his mother's pho, which is, of course, largely water. The Farmers' Market has been hugely helpful reassuring people, he says, posting weekly reports of its own water tests and educating the public on how healthy food can counteract the effects of lead.

Still, Vu says, fear lingers. "There is a whole generation of kids who only know what comes out of the faucet as poison." Small-business owners, like other community leaders, will be answering such questions for some time. The water "is not OK just because I told you it is," he says. "It is OK because I showed you, by building a thriving business."

Stitched in Flint

Streetwear has attitude. "You want to be edgy and tough and show bravado," says Oaklin Mixon. "Everyone is trying to be a bad boy."

But when you want to revive a city on the FBI's list of most violent, that kind of attitude sends the wrong message. So Mixon named his urban apparel business GoodBoy Clothing, as testament to, "the people who inspired me by contributing to this community," he says. "I thought it was kind of cheesy at first. But we need to get that out into the culture."

Mixon bounced around the foster system before landing in Flint in 1997, at age 13. He was an artistic kid. College didn't suit him, so he dropped out and got a job at a friend's new business, The Flint Crepe Company. With $1,000 in savings and experience at a startup, he launched GoodBoy in 2014.

For two years, Mixon operated lean, selling his T-shirts from pop-up shops and at events. The water crisis briefly unnerved him. "As a businessperson, I was like, 'Is this going to turn people away?'" he says. "But I decided to push through because I knew Flint would push through."

In 2016, Mixon won second place in a small-business contest sponsored by AT&T and Chris Gardner, the once-homeless millionaire entrepreneur played by Will Smith in the film The Pursuit of Happyness. The $20,000 award bought equipment and inventory. In 2017, Mixon opened a store with a small apparel factory in back.

Today, Mixon and his four employees cut and sew between 100 and 200 T-shirts and sweatshirts a week. In-house production is critical to Mixon's vision of restoring Flint to its manufacturing roots, only this time with fashion instead of automobiles. Hand-sewn items cost between $70 and $100, but Mixon also sells clothes he designs but manufactures more cheaply elsewhere in the U.S. or--cheapest of all--overseas. ("Sweatshop-free," he emphasizes.) Those shirts cost around $25 and comprise much of the stock moving through the store. (The business also sells online.) "We are very, very sensitive to price," Oaklin says. "This way, people from any socioeconomic class can walk in and leave with a GoodBoy garment."

In 2018, GoodBoy sold just shy of $100,000 worth of apparel, and this year will be better, thanks in part to the new liveliness downtown. "It just proves the mental toughness and resilience entrepreneurs have in Flint," Mixon says. "Like they say about New York: If you can make it here, you can make it anywhere."

Published on: May 20, 2019