Matchmaker for minority firms
Linda Smith is three weeks into her job as head of the revitalized Los Angeles Minority Business Opportunity Center, and sometimes she still finds herself answering the phone with the name of her former employer.
That’s not too surprising given that she worked at FAME Renaissance, the economic development arm of the First African Methodist Episcopal Church in Los Angeles, for almost 14 years.
“The more I thought about it the more it seemed to be the next logical step to allow me to help a larger number of minority businesses,” said Smith, who was executive vice president at FAME Renaissance, a nonprofit formed after the 1992 L.A. riots, and executive director of its business development division.
In her new post, she replaces David Mora, who took a job with Wachovia Corp. after two years with the city-run center that matches minority businesses with contracts and financing. Smith begins her tenure after some tumultuous years for the center, which receives $300,000 a year, about a third of its annual budget, from the federal government.
In fact, when L.A. Mayor Antonio Villaraigosa took office in the summer of 2005, the Commerce Department was reportedly considering halting funding for the program because of questionable performance.
The mayor appointed Mora, who had worked in the outgoing Hahn administration, to revamp the business support program. And after a personal plea from the mayor, the feds agreed to give the center another chance and a three-year funding grant.
The investment seems to have paid off. This year, the center received the National Outstanding Performance Leader Award from the Commerce Department’s Minority Business Development Agency.
Smith “has big shoes to fill,” said her boss, Bud Ovrum, Los Angeles deputy mayor for housing and economic development. “Linda is going to take a very good program and make it even better. We’re very excited about her coming to work.”
The center, in tandem with the Minority Business Development Agency, sets annual goals for the numbers of contracts and financing deals it must help to close. Meeting the targets is considered the minimally acceptable performance, Ovrum said. Last year the center reached $138 million, exceeding its goal of $115 million.
“It is a very tough and demanding program. It’s not an easy field to work in,” he said.
Smith, who spent 15 years in commercial banking before joining FAME Renaissance in December 1993, has the right blend of skills to succeed, said the mayor, who picked her after a national search.
“Linda Smith -- with her wealth of experience in the Los Angeles business community -- is the right person to expand the agency’s capacity to work with similar organizations to expand opportunities for minority business across the city,” Villaraigosa said.
Successful minority-owned businesses are important to the vitality of the city, Ovrum said. L.A. was home to about 105,000 minority-owned businesses, according to 2005 figures, the most recent available, Smith said.
Sales and revenues at most minority-owned firms tend to lag behind national averages, though. Helping them land public and private sector contracts and financing is an important way to assist them expand and add jobs.
“Successful businesses build successful communities, and that’s why the Los Angeles Minority Business Opportunity Center is such an important tool for economic development in our city,” Villaraigosa said.
Smith, a former business lender and a onetime vice president in private banking at the then Bank of California, already has plans to boost the financing side of the center’s operations.
“I hope to bring different types of financing opportunities to the MBOC program, which really has primarily dealt with commercial banks,” she said.
Smith would like to organize a network of angel investors -- wealthy individuals who invest in start-ups -- to help provide the equity capital she said most businesses need to get them to the level at which they are attractive to venture capitalists.
Her target is the “soft spot” she said many successful entrepreneurs have when it comes to supporting newcomers trying to expand small businesses.
At FAME Renaissance, she helped set up a $5-million equity fund that invested in half a dozen firms. She also helped launch the group’s business incubator.
Her proactive approach is likely to fit the redesigned Minority Business Opportunity Center.
The program has expanded its partnerships in the public and private sectors. Its board members include executives from Bank of America Corp. and Magic Johnson Enterprises as well as Los Angeles World Airports and the Los Angeles Department of Water and Power.
Training in conjunction with partner organizations is offered to help minority-owned small businesses negotiate contracts, write business plans and understand how to determine their financing needs so they are better prepared to deal with lenders.
The group works with its organizational members, such as the Southern California Minority Business Development Council, to help finance contracts that the council’s members land.
The procurement side -- helping companies receive contracts -- will present more of a learning curve for Smith, she said. By next month, she plans to hold a strategy meeting for the five-employee operation to determine how to maintain, and exceed, the center’s goals.
To succeed, Smith said she would take a “more private-sector approach.”
“We have to go out and cold call and reach and touch the small minority business customer, instead of waiting and saying we have these great services and come to our website,” Smith said. “We need to be where they are, find out what they need and try to bring solutions and close deals.”
Ultimately, it’s about being a successful matchmaker.
“Businesses say they can’t get financing or contracts and folks with money and contracts say they can’t find the businesses,” Smith said. “That’s our role: to put those folks together.”
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(BEGIN TEXT OF INFOBOX)
L.A. Minority Business Opportunity Center
What: A city-operated program under the direction of the federal Minority Business Development Agency, which provides about a third of its $950,000 annual budget.
Why: To help minority business owners secure contract and procurement opportunities, financing and training.
Who: Director Linda Smith and five staff members.
For more information: Contact the office at (213) 978-0671 or go to www.lamboc.org.
