Taking the short path to nowhere

Time and again I receive either phone calls or have conversations with Black business owners that feel the major share of government and corporate contracts go to white men. And after requesting and reviewing available contracting/procurement data this does seem to be the case. In an effort to try to help businesses better understand where they are at and what they need to do (considering the circumstances) I try to educate them on the policies that may be in place to better help them secure more contracts; specially those that are backed by government funds or incentives.

Government has a tendency to set goals and/or attach requirements to developers of publicly financed development projects to ensure they utilize minority and women owned businesses. Large corporations tend to have ‘supplier diversity’ programs which set goals on doing business with M/WBEs. In order to take advantage of these opportunities; which are not set-asides, a business has to obtain certification from a recognized agency or government entity. It is unfortunate that the majority ‘white male’ owned companies do not need any certification to win more than 90% of available government and private contracts, but that is the world we live in and it will take more effort than anyone or agency can provide to turn this around. Therefore, to best take advantage of the opportunity there are certain things a Black business must do to win more govt and corp contracts. The first is to have a written plan on your business and its direction and benchmarks.

A business plan can be a 10 page functional document or a 50 page detailed plan, but both will provide a realistic snapshot to the owner, investor or banker about your specific product/service. Even if a business is not seeking financial assistance, a business plan is an indicator that a business owner is willing to put in the paperwork needed to run, grow and operate a successful business. Running a restaurant is more than just being a good cook or operating a construction firm is more than knowing how to build/renovate property.

Second, get certified as a women or minority owned business. With a little research anyone can find government agencies that will do this for free or a recognized agency that will do it for a fee. Even though the application may be intimidating, if somebody is serious about their business they will be willing to complete the steps needed to obtain this certification. Be prepared to share information such as bank statements if you have a business account, photo identification and signature card on your business bank account, property owned with proof of ownership and value, financial data for at least three years. These can be income tax returns and schedule amendments if a sole proprietor or other financial documents if a corporation or LLC. If you have been conducting good business (not the old shoebox accounting method) you will have these documents available or can readily access them through a series of phone calls. If you have not been truthful about your property owned and are trying to hide income earned, be prepared to watch great procurement and contracting opportunities pass you by.

Government agencies and corporations rely on proof of certification to develop and analyze statistics on M/D/WBE utilization and goals met. Government prepares reports on DBE, MBE and WBE utilization based on ‘availability’; which it compiled from vendors registered with their departments that provide certifications. When they provide availability information on a few businesses, these numbers are normally way low because Black businesses fail (or refuse) to go through the certification procedure to be recognized. In a nutshell, there may be 40 Black construction companies, but if only three have provided MBE certification, the govt statistics are going to show a lack of availability to justify not doing more business with Black owned construction firms. In the end, it is these firms that normally cry foul!

No agency can help someone that is not ready to take the necessary steps to help themselves. There are no short-cuts to business growth and eventual success. Having spoke to many procurement officers in government and corporations, they are up front about the fact many minority businesses do not attempt to obtain the certifications that can increase their business because they don’t want to compile the paperwork and provide the information needed. Bank officers and investors I talk with share the same story of business owners who want financing based off of a conversation and are not willing to prepare and provide a business plan; functional or otherwise. For some reason, some people actually believe they can just walk into a bank and fill out a loan application and get financing for their business? On top of that, they get mad and want to blame the bank of not giving them money because they Black.

This victim mentality has become far too common among Black entrepreneurs aspiring to be in a successful business; which is why the disparity among our business capacity and White males/females is where it’s at and Black unemployment numbers remain worse than they were in the 60s. We are not a part of the job creation in our cities and in this country.

IBSA is a resource partner for NetworkKansas.com and KCSourceLink.com. The nonprofit agency provides federaly-funded microenterprise training, development and support services to minority and low to-moderate income entrepreneurs under the Workforce Investment Act. in Leavenworth, Wyandotte and Johnson County. To register or enroll in agency programs, visit their website at www.ibsa-inc.org or call our office at (785) 232-4272

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