Rio Grande Minority Purchasing Council - Help for Small Business

New Mexico Business Journal, March, 1991 by Andy Gomez

Rio Grande Minority Purchasing Council

If you have a woman or minority-owned business, there is help for getting in touch with corporations who may want to buy your products. The Rio Grande Minority Purchasing Council has a mission to certify minority and women-owned businesses who can do business with larger corporations.

The Council is a private, non-profit organization which is privately funded. It was incorporated in 1978, and is affiliated with a national organization, the National Minority Supplier Development Council, which shares the same mission. The mission is really a match-making function between small businesses and corporations.

Unlike other businesses or organizations which focus on hooking up small businesses with government contractors, the Rio Grande Minority Purchasing Council concentrates its efforts on the corporate system.

According to Dick Lavers, executive director of the Council, the Council will also co-sponsor and assist other government agencies who are working with women and minority-owned businesses.

Certification for businesses involves filling out forms which will prove a business ownership is 51 percent women or minority owned. This may include paperwork, an inspection, interviews or possibly stock ownership papers if the business is a corporation to authenticate ownership.

Lavers says the Council also publishes a directory which describes the membership businesses of the Council. The directory is sold to corporate buyers. It is also available to other members of the Council.

The concept originated in Chicago in the early 1970s. At that time, the federal government recognized the need to get prime contractors to spend money with minority-owned businesses. Regulations were written to insure this, but no one knew where the minority businesses were located or what they could supply.

Several businesses formed the early councils, and the idea spread nationwide. There are now 47 Councils in the United States, although not all states have Councils. Money for the Councils comes from the Business Consortium Fund, which is funded by Fortune 500 businesses. The New York operation then uses the funds for loans to member Councils.

The Rio Grande Council is funded by charging a $100 annual fee to the small businesses and a $800 annual fee to corporate members.

Each Council will locate one or two banks to be the local lenders for businesses. If a business owner has received a contract from a corporate member and needs more money to fulfill the terms of the contract, the small business can go to the local lender and negotiate a loan. The local lender would be obligated for 25 percent of the loan, with the New York bank lending the other 75 percent.

Each month the Council sponsors a Matchmaker breakfast or lunch in Albuquerque. The events also occur on a quarterly basis in Santa Fe and Las Cruces. The meeting will feature two small businesses and what products or services they have to offer to corporations.

At the end of the meeting attendees have a few seconds to discuss their businesses, and at the close the attendees are networking between small businesses and corporations. Lavers says the number of people attending the breakfast or lunch sessions is increasing as word of mouth spreads the news.

Every month a representative of the Minority Input Committee brings concerns to the Board of Directors and takes Board actions or comments back to the membership. Board members will also go to a corporate facility, if requested, to give a one-on-one opportunity with buyers to find out what the corporate buyers are looking for in terms of products or services available.

The Council sponsors on-going educational seminars to women and minority-owned businesses. An example might be helping people learn how to get the most out of attending trade fairs which highlight small businesses or how to find and fill out requests for proposals or quotations for bids.

The Council's approach to helping business owners is based on a very specific, concrete, pragmatic way to help the small business owner do a better job of selling products or services.

The Council has a three-person staff and a Board of Directors with 24 members. The Board is made up of representatives from the corporate membership. Lavers says about 80 percent of the board members come from the purchasing or materials management environment in corporations, with the remainder of the board members coming from a law, marketing or other management background.

The Board establishes policy, makes policy decisions and usually tries to find people within the membership to conduct seminars.

While the Councils are affiliated with the National Council, each is independent with its own board. Each Council uses the same national guidelines, however. If a minority-owned business which is certified in Michigan wants to do business with a corporation in New Mexico, it will meet the same criteria as a business in New Mexico.

The member Councils meet quarterly to share ideas which have worked or concerns about meeting the needs of the minority-owned businesses. Lavers says: "We really learn quite a bit at these meetings, and it may help each local Council to save time and energy on things which don't work."