Mentors help minority companies grow
NEW YORK (AP) – Mel Gravely says his construction company might not exist today if he didn’t have mentors to guide it.
Gravely’s company, TriVersity, joined a program called a minority business accelerator even before he bought a controlling interest in the Cincinnati-based company in 2006. It helped the company get started and win contracts that have helped Triversity’s revenue double.
“I don’t make any move at all without getting the input of the accelerator,” Gravely says.
Minority business accelerators have launched in a handful of metropolitan areas in recent years as local businesses, chambers of commerce and economic development groups work to create more jobs and improve the quality of life in their regions. The Cincinnati accelerator, created by the Cincinnati USA Regional Chamber in 2003, has inspired officials and business people in the Greenville, S.C.; Charlotte, N.C., and Newark, N.J. areas to start similar programs.
A key goal of the accelerators is to help minority owned-companies win contracts with large companies. Despite the rapid growth in the number of minority-owned businesses – over 45 percent between 2002 and 2007, according to the Census Bureau – they struggle to get business with major companies. Many don’t have the ability to fulfill million-dollar contracts, something the accelerators aim to change. But there’s also a lingering perception that minority companies can’t do the job or can’t do it well, according to business owners and professors who study minority business. And although many minority companies can fulfill a contract, there’s still resistance at many large companies to taking risks with a new supplier, no matter who owns it.
“Most people are not racist. They just don’t like to change,” says Crystal German, vice president of economic inclusion at the Cincinnati Chamber.
WHAT ARE MINORITY BUSINESS ACCELERATORS?
Accelerators help companies speed up growth. The programs focus on a small number of companies that have shown potential to succeed and create jobs. To be in the Cincinnati program, a company must already be well-established, have annual revenue of $1 million or more and have a business plan that shows it can grow significantly in the next two to five years. The goal is to help small companies grow into bigger ones so they can make a greater contribution to local economies.
“The theory is that the largest companies have the greatest potential to employ people, generate tax revenues, make charitable contributions and overall drive the economy,” German says.
Mentors at the accelerators act as advisers, meeting with company owners, helping them improve operations and build strategies. They also connect owners with big customers.
Large corporations provide contract opportunities, mentoring or both. In Cincinnati, Fortune 500 members Macys Inc. and Procter & Gamble Co. are among those that have given more business to minority companies.
WHY THEY EXIST
Local chambers of commerce and economic development agencies have launched accelerators to help minority businesses create jobs. Officials say the inability of minority companies to expand holds back a region’s economic growth.
“Look at the number of minority business enterprises and how many are able to build jobs. It’s grossly disproportionate from their majority counterparts,” says Nika White, vice president of diversity and inclusion at the Greenville Chamber of Commerce.
One reason for the disparity is that a small company may not have the infrastructure, such as computer systems, and the experience to operate on the level needed to fulfill a big contract, says Jeffrey Robinson, a professor of management and entrepreneurship at Rutgers University. He is working on the Newark accelerator.
“There’s a leap you have to take from the five-person company to a couple hundred, to being a multimillion-dollar company. You can’t run them the same way,” Robinson says.