We are in uncertain times, and our immediate future could be more challenging. Minority-owned business enterprises, whose lifeline is largely linked to the success of corporations (and to a lesser extent the federal government), are hit hardest by this somber reality.
In challenging times, it becomes an encumbrance for corporate America to reconcile supplier diversity initiatives with cost-cutting initiatives. This adversely affects procurement budgets allocated to Tier I minority suppliers. It becomes worse for minority suppliers in the lower ranks (Tier II or small business owners) who feel the crunch as corporations and their Tier I suppliers struggle to deliver on minority-supplier spending commitments made prior to the economic downturn.
Here is how MBEs can survive an economic downturn:
1) Become certified as a minority-owned business. This is perhaps my single most important recommendation. To become part of the supply diversity chain, it is imperative that you are certified. Apply for USPAACC-EF certification.
2) Build a strong infrastructure. Small businesses, like large ones, require a strong team of reliable and innovative employees, access to debt and equity capital, and the capacity for product diversification.
3) Build strategic alliances. They will enable you to expand your geographic reach, serve a wider region or diversify your product offerings. This option is especially helpful for small- to medium-sized businesses, since many corporations are now looking for national suppliers.
4) Explore Tier II opportunities. Corporations now put pressure on their Tier I suppliers to source through minority-owned suppliers. As a Tier II supplier, you could grow your business substantially and move up the ladder to become a Tier I supplier.
5) Include your business in major MBE databases like the USPAACC-EF ePortal. This places your company in our national database and on the radar of buyers from major corporations and the federal government.
6) Actively participate in local and regional business opportunity events, like the USPAACC-EF Procurement Connections held nationwide. They can help you establish excellent contacts with major corporations and the federal government.
7) Take advantage of other government programs and resources. The federal government operates programs for MBEs to help in the procurement process and win government contracts.
8) Look for alternative funding sources. Other than family and friends, capital resources are now expanding to help subsidize the growth of minority-owned businesses.
9) Make your business internet-accessible and e-commerce ready. Your company must have the appropriate computer systems and information technology needed to serve your clients. Minimal requirements include a good computer system, Web site and e-commerce strategy.
10) Last, but not least, be proactive. Keep your ear to the ground, and learn how to read the procurement landscape. Focus on your core competencies, aim for solid results and deliver on your promises. This way, your business will be able to quickly respond and adapt to changing market forces and ride whatever challenges may lie ahead.
Susan Au Allen is national president and CEO of the U.S. Pan Asian American Chamber of Commerce Education Foundation.