Black Enterprise Magazine Editor-in-Chief Derek T. Dingle led an insightful panel for Minority Enterprise Development Week (better known as MEDWeek and presented by the Minority Business Development Agency) at the Omni Shoreham Hotel in Washington, D.C. this morning. “Energizing the American Economy with Minority Business Enterprises” was the opening session for MEDWeek, which was kicked-off with a White House reception yesterday, and followed a keynote address from Earvin “Magic” Johnson, CEO of Magic Johnson Enterprises.
Dingle moderated panelists including Macy’s Inc. Sr. VP/Marketing Service/Corporate Services Inc. Aubyn Thomas, Sam’s Club/Wal-Mart Sr. Manager/African American Market Corporate Affairs Adrienne T. White, and Agri-Tech Producers Inc. President Joseph J. James. Agri-Tech Producers is a Columbia, S.C.-based minority owned business with an exclusive license to innovative torrefaction technology developed by North Carolina State University (NCSU). This process cost-effectively converts cellulosic biomass, like wood chips and bio-crops, into a substance, which can be used as a coal substitute; as a superior feedstock from which to make stronger, more energy dense and water repellent energy pellets; and as a superior feedstock from which to make cellulosic ethanol, using gasification methods.
Key takeaways from the session for entrepreneurs looking to position themselves as corporate suppliers:
Avoid prematurely taking on excess overhead expenses. For example, instead of taking on the overhead of building your own manufacturing facility to attain scale, James explains, Agri-Tech found an established manufacturing partner, Kusters Zima Corporation, to partner with. Not only did this help Agri-Tech avoid unnecessary overhead, it helped his company to gain access to European markets, as Kusters Zima, based in Spartanburg, S.C., is German-owned.
Choose your partners carefully. Agri-Tech interviewed potential partners for six months, looking for a match in capabilities as well as cultures, before teaming up with Kusters Zima. “They were looking for a way to transition into a new economy,” says James. “We had a common desire to both make money and make a difference in our communities.”
Before taking on a major corporate client, do your due diligence. Macy’s Aubyn Thomas stresses the importance of doing your homework before entering into a partnership with Macy’s: “Doing it after the ‘marriage’ is too late.” Macy’s uses programs, including corporate mentorship, to try to establish for potential vendors a clear understanding of operational expectations, swings in demand for
products and services, deliverables and the operational demands of the partnership. “Be sure the corporation is clear on your capabilities–don’t over-promise, be honest,” Thomas says, adding that the corporation also has an obligation to put its vendors in position to succeed prior to engaging them as suppliers.Sam’s Club/Wal-Mart’s White echoes Thomas. “It’s your job to know who we are, what we do, what services we provide, who are customers are,” she asserts. One of the ways her programs seeks to enable this learning is by sending minority and female business owners to Dartmouth University’s Tufts School of Business for business development education last year, with plans to do so again this year.
Have a realistic, executable plan to finance the pursuit of opportunities. “Be prepared to put your personal money on the line,” says James. In addition, he says he aggressively pursued state and federal grants. Also, in his search for a manufacturing partner, one of the objectives was to find a company with a financial structure that could help Agri-Tech Producers with cash flow management and other financial support. James says taking this into consideration when seeking a partnership “will enable growth and scalability” for your business.
Sustainability and environmental responsibility are key factors driving supplier diversity. Says Macy’s Thomas, “At Macy’s, we have an internal focus, for our employees, and an external focus for sustainability, [for suppliers and the communities where stores are located]. Be prepared to show the value proposition your firm offers to help potential corporate partners to achieve both sets of objectives.”
Check for a corporation’s local supplier diversity initiatives. Many minority- and female-owned firms are two small to handle a major contract with national or global corporations such as Macy’s and Wal-Mart. Don’t give up. Check with local or regional corporate representatives for local opportunities. Not every corporation has such initiatives, but identifying those that do could be a worthwhile exercise.
For example, says Sam’s Club/Wal-Mart’s White, their are opportunities for local growers of produce as well as construction businesses to supply goods and services to stores at in their respective areas, with managers at the store and regional managers responsible for helping to identify and establish such relationships. “This helps to reduce our carbon footprint–for example, by stocking apples
from a local grower instead of trucking them in from a supplier in another state,” White explains. “That way, a small vendor can perhaps start locally and eventually grow to scale [to handle larger contracts].”Present your company’s products and services as solutions. Says White, “You need to be able to passionately explain why your company is the solution are company needs. However, be honest and as transparent as possible–do not over-promise!” It’s good to over-deliver, but better if you under-promise and manage expectations, while serving the needs of the corporate partner and its customers.
Thomas adds, “When I ask, ‘What can your company do for Macy’s?’, it’s not enough to answer, ‘Anything Macy’s needs me to do.’ ” You have to truly understand the needs of the corporation, explaining specifically how you are prepared to so business with them. Investing time and energy into understanding the corporation’s culture, business challenges, problems and objectives is necessary in order for you to prepare a competitive bid.
Learn more about Wal-Mart’s Supplier Diversity programs
Learn more about Macy’s Supplier Diversity programs
Alfred Edmond Jr. is the editor-in-chief of BlackEnterprise.com.