Minority Business Development Center Offers Help in Gaining Foothold

For eight years, Goulart Trucking Inc. was a small, San Diego-based company that had one truck and one driver.

Paulo Goulart knew his company had the potential to grow if he could win a contract to transport equipment for the military. But obtaining such a contract was proving to be a problem.

Four years ago, Goulart went to the Minority Business Development Center for help.

Today his company has four trucks and has hired as many as 11 drivers during boom periods. While Goulart credits his company’s success to hard work and dependable service, he also says the MBDC has “been very helpful.”

Helped Write a Letter

“We were a small, understaffed business,” Goulart said. “I went to them and asked them to help me write a letter to the military to help me get some bids from the Defense Department, and we earned a few bids.”

The MBDC, housed at San Diego State University, has given business advice to thousands of minority entrepreneurs since 1973. For a small fee, it provides consultation in a variety of areas, including marketing, accounting, inventory control, bonding, bid estimates and mergers. The center also conducts business training classes.

“There are a lot of minority businesses that don’t know we exist but really need this type of service,” said Preston Bradley, a construction consultant at the center.

“The center provides a place where they don’t have to be alone,” he said. “It’s a service where clients can go to and sit down with top-notch professionals and have their questions answered, which in some cases will keep them in business.”

According to Chuck Shockley, executive director of the MBDC, the center is designed to increase the opportunity for racial and ethnic minorities to participate in business, as well as assist them in establishing their own competitive firms.

Supported by Grant

The center is supported by a $320,000 grant from the Minority Business Development Agency, part of the U.S Department of Commerce. The grant is administered by the San Diego State University Foundation, which also provides $48,000 to the center’s annual budget.

Shockley said relations between large companies and the approximately 6,000 minority-owned businesses in the San Diego area have improved in recent years.

“When we first started, people were reluctant to deal with minority businesses. Although they had not personally had a problem with a minority vendor, they knew someone who had,” Shockley said.

“Some of the minority businesses did not understand minor things such as why large companies only order during their third quarter, when it’s in their budget, or wait several months before they pay a bill,” Shockley said.

“You have to remember that these are first-generation business entrepreneurs, and we try to help them close that gap. When they were growing up, they didn’t sit around the table with their parents and listen to them talk about the banker they just met or the deal they just closed.”

Better Prepared Today

While minorities are better prepared today to start their own businesses than they were 15 years ago, Shockley said, they still have trouble raising money to open those businesses.

“In 1974 the biggest problem was getting into the door,” he said. “Typically it’s money and contracts. They’re getting more and more contracts, but the problems are in the bonding and finance.”

Shockley said minority entrepreneurs have expanded recently into non-traditional fields such as roofing, engineering and electronics.

“In 1974 most of the firms that came to us were janitorial or other service products. Now we have closed the gap. Over 25% of our clients are now into the technological fields,” he said.

Exposure Important

The center serves mainly minority firms that own service-oriented businesses, such as employment agencies and computer software companies. It also serves clients in the construction, wholesale and manufacturing fields.

“The most important factor for a minority firm is exposure,” Shockley said.

Toward that end, the center, in association with the National Minority Supplier Development Council, holds monthly meetings for buyers and minority sellers.

“At the meetings, minority businesses have an opportunity to do a brief presentation and exchange cards with potential buyers,” Shockley said. “The main purpose is to increase the visibility between buyer and supplier.”

Companies from the council last year spent $129 million with minority firms in the San Diego area, he said.

Directory and Sales Book

In addition to consultation and training classes, the center publishes a minority business directory, as well as “The San Diego Minority Vendor Sales Book,” which has information on marketing techniques, bidder certification and ways to reach potential buyers.

“If you put the minority firms in a (business) directory, it requires the buyer to take the action. But what we have done with the (sales) book is give the client a tool they can use to identify potential buyers, which has always been the problem,” Shockley said.

The center also provides a resource room where clients can review plans for construction projects. And it has a computer donated by a former client that is used for construction estimating.

‘Always There’

“I feel really comfortable with the center,” said Ric() Morales, owner of Accu-Tech Consultants Inc., a roof consulting firm. “They are always there to help. You can call them anytime and they will help you with whatever problems you have.”

Another client, Armando S. Doblado, owner of Lemon Grove-based Pharaoh Construction Inc., said: “I am really pleased with Frank Martinez and Preston Bradley of the Minority Business Development Center. They have helped me out a considerable amount. They have given me connections and sources that I wouldn’t have gotten if it wasn’t for them, and I have been in construction for over 10 years.”

Pharaoh Construction built the historic Lemmon Grove Trolley Station, a replica of the 1895 original, and did $3.5 million in business last year.

Firms that do more than $500,000 of business a year pay the center a federally subsidized fee of $17.50 an hour for its services, while those doing less than that pay $10 an hour.

Last year the center’s 300 clients together did $22 million in business.

Some Are Critical

Nelson B. Robinson, a consultant at the MBDC, said critics have charged that the center provides minority businesses with unfair advantages. But he argued that such programs are “still badly needed because minorities have not reached parity in the business world.”

“Minorities currently own only 4% of the companies while they represent 17% (of the people) in society. You also must remember that most of these minority-owned companies are small,” Robinson said.

Shockley said that starting a business is tough for anyone. “If you are going to be a doctor, you go to school for many years and then you have a training program for several more years. When you start up a business, you learn from the seat of your pants.”

Said businessman Morales: “They have helped me a great deal. They have taught me not to be so concerned with my color, but to do the best you can as a professional.”