MAKING A DIFFERENCE : One University’s Approach: USC Boosts Minority Businesses
California has a higher percentage of minority-owned businesses than the national average, but, as everywhere, they garner a disproportionately small share of total sales and revenues. Jobs were a rallying cry after last year’s disturbances in Los Angeles and firms have been challenged to increase investment in minority neighborhoods. A pioneer USC program could provide a successful model.
BACKGROUND State and federal agencies have established participation goals for contracts between public agencies and companies owned by minorities, women and disabled veterans. As an outside contractor competing for public research funding, USC created a Small Business Development Office (SBDO) in 1990 to aid compliance and went a step further, embracing goals for all business conducted with the university. Since opening the office, USC has nearly tripled procurement dollars going to minorities, women and disabled veterans. With a two-person staff and an annual budget of less than $100,000, USC’s Small Business Development Office combines outreach with what manager Amanda Vallejo calls “in-reach,” to promote these underrepresented businesses to the campus community and procurement-related staff.
THE PROCUREMENT PROCESS
Recruitment
The development office staff attends trade shows to identify minority-owned businesses. “We source hundreds of business people during these events,” explains Amanda Vallejo, manager of SBDO.
They also organize an annual small-business networking luncheon that brings together 200 companies from underrepresented groups and USC procurement officers and buyers. “Prospective vendors go one-on-one with the buyers responsible for procuring their product or service. It’s direct. No voice mail, no secretary, no ‘I’ll call you back.’ Here’s the man who makes the decision, and you’ve got him for three minutes,” says Vallejo.
Education
SBDO meets with new prospective vendors weekly. “We review the process of doing business with USC. We give them a laundry list of dos and don’ts so they get to understand our business culture. All of this helps to prepare them to market themselves to USC purchasing agents and buyers.”
Vendor applicants make a five-minute presentation on their product or service and complete a supplier information form. SBDO determines vendor eligibility based on business profile, history and pricing competitiveness. Companies certified to do business with USC are referred to purchasing agents and buyers; ineligible companies are referred to the business school, which offers free or low-cost technical assistance to entrepreneurs.
Promotion
“Our directory of about 1,000 businesses circulates to approximately 970 deans, directors, senior business officers, buyers and contract administrators,” says Vallejo. “It’s been our single most successful tool in bridging the gap between the good or service end-user, the buyer and the vendor.
“We also have workshops. We let staff and faculty know who we are, why we’re here and what the goals are and what the university’s committment is. We sensitize them to the fact that it’s going to take everybody to meet that goal. We let them know that these vendors are prepared; they understand how USC does business.”
THE BOTTOM LINE
Overall procurement/ procurement by minority business/ minority percentage of total procurement USC Overall Procurement (in millions of dollars) Procurement by Minority Business 1989-90: 2.3%
1990-91: 3.3%
1991-92: 5.8%
1992-93: *7%
* estimated
Minority contract goals
Federal mandate USC State of California General Services Dept.
Sources: USC Small Business Development Office, State of California General Services Department, US Public Law 95.507
ONE BUSINESS PERSON’S EXPERIENCE
Angel Munoz
Owner of Abisco Products, maufacturer of custom vinyl binders.
“As a result to the SBDO trade luncheon we ended up with a blanket contract to do the university’s binders for one year.
“What makes it a win-win situation for everybody is that I have 33 employees, all minority, and they live in the area. In effect, what USC is doing is helping to provide jobs to the local community, and they get a good-quality binder at a competitive price. USC’s not paying any more for our product, believe me. They’re not saying just because you’re a minority we’re going to pay you 20% more. You have to perform, but if you can perform and do so competitively, then they’ll give you an opportunity.
“Typically the small minority company does not have the marketing expertise large companies do. Many can’t respond in a proposal in a sophisticated way. We’re limited by our resources, too. A larger company can go to the bank and get a line of credit to expand their business (more easily than small business).
“Some people may have the feeling that they’re doing us a favor by giving us business. My response is you’re not doing us any favors; you’re giving us an opportunity to sell a good product at a competitive price. My people buy your pencils, they buy your cars, they go to your hospitals, they use your bank, they go to your universities and pay tuition.”
