Transforming Detroit: From motor city to small business hub

DETROIT, the United States — Scott Owens might never have started selling his homemade hot sauce, an interest he had always kept to himself, if Detroit, the most populous city in Michigan, had not been hit hard by the financial crisis and the housing bubble in 2008.

He used to work in the automotive industry and lost his job that paid between $60,000 and $80,000 a year in 2008.

"We had two little kids at home. We were scared because we didn't know what income I would have," he said.

The family is one of the tens of thousands in metro Detroit that had to make drastic changes in their lives in order to put food on their table.

For three to four years, people who had been making a good salary were earning a minimum wage because that was the only job they could find. Some relied on charitable organizations for food and clothes, while others moved out of Michigan.

Owens started his hot sauce business in 2012 after he struggled with part-time and night jobs, being laid off and hired time and again.

His brand Scotty O'Hotty made a name at local farmers' markets, and gradually made its way to shelf space in stores.

"Fast forward five years, we are a national brand now. We are in about 2,700 stores across America and we do shipping overseas," said Owens proudly.

"It was a crazy idea and it was out of necessity. From being in automotive to a Detroit hot sauce guy, it's quite a leap," he added.

Many of those who stayed in Detroit, like Owens, looked for whatever opportunities they had personally. Some who had a family recipe started food businesses, some opened stores selling furniture made from recycled materials, and others opened shops selling handmade goods such as notebooks and jewelry.

"Businesses were starting out of a basically desperate situation," said Nicole Schulte-Franey, founder of Holy Cannoli's.

She started her bakery business a year before the Detroit city government filed for bankruptcy with over $18 billion in long-term debt in July 2013.

Her stores offer handmade, traditional cannolis made from a family recipe that goes back to Sicily. They change and rotate through 75 different flavors of cannoli fillings including cookies and cream, chocolate chip cookie dough to key lime, strawberry, raspberry-white chocolate.

While their brands are well recognized locally, both Owens and Franey are seeking opportunities to expand their businesses overseas.

Earlier this year, they attended a conference held by Alibaba, China's e-commerce giant, to build connections and learn how to sell to China through e-commerce platforms. More than 100 local Detroit companies and over 600 businesses all across Michigan participated in the conference.

Meanwhile, the Michigan state government has been encouraging business cooperation between Chinese and Michigan companies for years.

Last year, the Michigan-China Innovation Center was founded with a grant from the state of Michigan.

The non-profit organization aimed to market Michigan in China and attract Chinese investment to Michigan by building relationships with individuals, businesses, business groups, and governmental units in China, and organizing a wide variety of collaborations between Michigan and Chinese partners.

All efforts combined, Detroit's unemployment rate dropped to 8.4 percent this year, the lowest since 2001, data from the US Bureau of Labor Statistics showed.

"Vibrancy and life have started to come back into the city," said Franey.

Once a "Motor City" accommodating automotive giants' headquarters, Detroit has gradually grown to be a small business hub that even "little guys" can also succeed.