Becoming an ‘Official’ Minority Firm
Convinced that access to big companies was essential to the success of his travel agency, Chuck Covington jumped through all the hoops necessary to get his firm certified as an “official” minority-owned business.
“If it weren’t for the minority supplier councils and the exposure they give us to corporate America . . . I would never get to the people who make the decisions,” said Covington, who opened People’s Travel with his wife, Tina, about six years ago in Belleville, Mich.
After filling out piles of forms, answering scores of questions and opening his books and records for inspection, People’s Travel was certified by Coca-Cola, General Motors and several local minority supplier councils. Covington, who is black, also qualified for certification by the University of Michigan and the U.S. General Services Administration.
“Business depends on who you know and people don’t like to do business with strangers,” said Covington, who is no longer a stranger to his biggest clients.
Although many minority business owners moan about the certification process, most say it’s worth the time and trouble to participate.
While most government agencies and public utilities are required by law to do a portion of their business with women and minorities, many private companies make similar commitments. Each agency and company has a different certification process, but most require information on company ownership, financial backing, company history and qualifications.
One coveted form of minority certification is offered through the U.S. Small Business Administration’s Section 8(a) program. Through the program, the SBA acts as the prime contractor and enters into all kinds of subcontracts with qualified minority-owned firms.
About 3,650 companies nationwide are active in the 8(a) program, which handled 3,968 contracts in fiscal 1990. Under the program, minority-owned businesses received about $4 billion worth of U.S. government contracts in fiscal 1990, according to the SBA spokeswoman Juanita Weaver.
To be eligible for an 8(a) program, applicants must be a member of a minority group and have been in business for at least two years. You can learn more about it at your local SBA office.
While the 8(a) program channels government money to small businesses, most major American corporations make some effort to buy goods and services from minority-owned businesses.
“Minorities buy our products, therefore they should be part of the system,” said John Haines, director of minority supplier development for General Motors in Detroit.
Haines, who coordinates purchasing for all of GM, relies on a computer data base to keep track of 1,350 minority-owned companies identified by the auto maker’s minority supplier program.
Last year, GM purchased $1.1 billion worth of goods and services from minority-owned companies--more than any other U.S. corporation, according to Haines.
“The (certification) system is working--evidenced by the number of companies being identified as minority-owned and controlled,” Haines said.
Helen Marquez, who bought a Remedy Temp franchise in Vienna, Va., two years ago, has been certified as a minority-owned business by about six local agencies and several companies.
“It’s not enough for them to look at my deep, dark brown eyes and verify that I am your basic Mexican kid on the block,” laughs Marquez, who said she was surprised at the extent of the questioning and background checks carried out by some organizations, especially the transit authority in Washington, D.C.
Marquez emphasizes that obtaining certification means nothing if your company can’t competitively provide the goods or services needed.
“None of this rigamarole guarantees you anything,” Marquez said. “Everything still depends on your prices and the quality of your work.”
How do you become certified?
If you are a member of a minority group, own 51% or more of a business and are involved in day-to-day operations, contact any of the 45 minority supplier councils across the country. If you are certified by one council, certification is reciprocal.
Write or call the National Minority Supplier Development Council, 15 W. 39th St., 9th floor, New York, N.Y. 10018. Phone: (212) 944-2430.
Minority- or woman-owned businesses nationwide that are interested in doing business with 16 California public utilities should contact the Clearinghouse at (800) 869-7385.
In Southern California, write to the Southern California Regional Purchasing Councils Inc., 3325 Wilshire Blvd., Suite 604, Los Angeles, Calif. 90010.
The SBA is hosting two workshops to explain the 8(a) program.
One is set for June 17 at California Lutheran University, 60 W. Olsen Road, Thousand Oaks. The session runs from 8:30 a.m. to 1 p.m. in Richter Hall. For information, call (805) 642-1866.
Another session is set for June 24 at the Los Angeles Area Chamber of Commerce, 404 S. Bixel St., from 10 a.m. to 1 p.m. For information, call (213) 894-4894.
NOTE: Last week’s column on new regulations requiring California businesses to have written injury and illness prevention plans by July 1, said companies with fewer than 10 employees were not affected. In fact, every California company must comply with the new regulations set by Senate Bill 198. For more information, contact your local Occupational Health and Safety Administration office.
