To Compete During Economic Uncertainty, Minority Suppliers Must Network, Form Alliances and Conquer the Internet

Black Enterprise, June, 2001 by April W. Klimley

What should minority suppliers do right now to remain competitive -- or even grow -- within the present uncertain environment? To some degree, the answer depends on where a company finds itself on the growth curve.

When Starting a Business

For those starting a business, planning is critical. The Internet makes this easier than it was in the past. Prospective entrepreneurs can access websites of the Small Business Administration and other organizations that offer a wealth of information. Such research can correct misconceptions about what it takes to start a certain business.

MBEs in Transition and Growing

Small to medium-sized MBEs should take the following steps:

* Apply for certification as a minority business

The National Minority Supplier Development Council has a certification process for minority businesses, as do state and local governments, as well as the Small Business Administration. Becoming certified may open new doors for a business, since many companies turn to databases of certified companies when looking for MBE suppliers.

"We are very aggressive in marketing our MBEs," explains Dinah Lovett, Executive Director of the Central and South Texas Minority Business Council (MBC) in Austin. "Scalable databases are wonderful, but passive." For this reason, her regional council created a Quick Response Team to scour its own database rapidly in response to corporate inquiries. "Getting to the right person is our biggest challenge," she says.

* Participate in networking events.

Attend as many MBE annual conferences or networking events as possible. These activities can translate quickly into useful contacts or even contracts.

Dinah Lovett recalls the results of a recent networking luncheon in her region. At that event an executive from one of her MBEs, Vic Garcia of Applied Data Resources (ADR), met Cheryl Bradley, an executive at GTECH, a gaming company that operates lotteries in 32 states and 26 countries. The very next day ADR nailed down a small contract for toner cartridges from GTECH, and soon after, ADR was able to win a much larger contract.

* Become E-Enabled.

Organizations supporting MBEs frequently offer e-business training and seminars.

* Develop strategic alliances. While certain partnerships may be unrealistic, small MBEs can forge informal alliances with companies of similar sizes in related fields. Such alliances can lead to fee-sharing and broaden the scope of both companies.

* Stress customer service

Personal service is still what differentiates one company from another. Whether you operate on the web or not, make sure you and your employees are responding to your clients need with the added value they expect today.

* Don't forget the basics.

Develop a business plan, website, and other fundamentals. These will give you the groundwork you need if you decide to expand or find that you have received a contract that requires greater financing.

Larger MBEs Face Different Challenges

For the fastest-growing MBEs, future success may depend upon developing and implementing the right strategic plan. A number of consulting firms now specialize in this. Ralph Moore, for instance, has developed a model that he uses to inspire and guide MBE expansion and growth. It starts with a "traditional" model of the owner/entrepreneur-centered MBE and moves on as the company becomes an "advanced supplier" able to fulfill national contracts, and, finally, to a position as a "world-class business partner" with international capabilities. (For more information, contact ralphmoore@rgma.com.)