Gravely, president of TriVersity Construction, poses in his
office in front of some paintings of work his company has
done, Wednesday, April 16, 2014, in Cincinnati. Gravely’s
company joined a program called a minority business
accelerator even before he bought a controlling interest in
the Cincinnati-based company in 2006. It helped the company
get started and win contracts that have helped
TriVersity’s revenue double.
NEW YORK — Mel
Gravely says his construction company might not exist today if he
didn't have mentors to guide it.
company, TriVersity, joined a program called a minority business
accelerator even before he bought a controlling interest in the
Cincinnati-based company in 2006. It helped the company get
started and win contracts that have helped Triversity's revenue
make any move at all without getting the input of the
accelerator," Gravely says.
accelerators have launched in a handful of metropolitan areas in
recent years as local businesses, chambers of commerce and
economic development groups work to create more jobs and improve
the quality of life in their regions. The Cincinnati accelerator,
created by the Cincinnati USA Regional Chamber in 2003, has
inspired officials and business people in the Greenville, S.C.;
Charlotte, N.C., and Newark, N.J. areas to start similar programs.
A key goal of the
accelerators is to help minority owned-companies win contracts
with large companies. Despite the rapid growth in the number of
minority-owned businesses — over 45 percent between 2002 and
2007, according to the Census Bureau — they struggle to get
business with major companies. Many don't have the ability to
fulfill million-dollar contracts, something the accelerators aim
to change. But there's also a lingering perception that minority
companies can't do the job or can't do it well, according to
business owners and professors who study minority business. And
although many minority companies can fulfill a contract, there's
still resistance at many large companies to taking risks with a
new supplier, no matter who owns it.
are not racist. They just don't like to change," says Crystal
German, vice president of economic inclusion at the Cincinnati
this Jan. 22, 2014 photo, Tillie Hidalgo Lima, chief
executive officer of Best Upon Request, a concierge services
provider, left, works with marketing director Jessica Lima
Bollin in their offices in Cincinnati. A mentoring program
created by the Cincinnati USA Regional Chamber called a
minority business accelerator has helped Lima get contracts
with Fifth Third Bank Corp. and the Cincinnati Children's
Hospital Medical Center.
WHAT ARE MINORITY
companies speed up growth. The programs focus on a small number of
companies that have shown potential to succeed and create jobs. To
be in the Cincinnati program, a company must already be
well-established, have annual revenue of $1 million or more and
have a business plan that shows it can grow significantly in the
next two to five years. The goal is to help small companies grow
into bigger ones so they can make a greater contribution to local
is that the largest companies have the greatest potential to
employ people, generate tax revenues, make charitable
contributions and overall drive the economy," German says.
Mentors at the
accelerators act as advisers, meeting with company owners, helping
them improve operations and build strategies. They also connect
owners with big customers.
corporations provide contract opportunities, mentoring or both. In
Cincinnati, Fortune 500 members Macys Inc. and Procter &
Gamble Co. are among those that have given more business to
"What we do
is try and not only provide counsel for the accelerator, but also
connect the dots, the needs of our company with those of suppliers
that are coming up in their ability to deal with P&G and
Macy's," says Amy Hanson, a Macy's vice president and head of
the accelerator's leadership council.
Ava Smith has enrolled in the accelerator there because she's
being approached by companies all over the U.S. and she wants to
be sure she can handle all the new business that comes her way.
The program is in its first year.
know what you don't know," says Smith, owner of Flat Fee
Hiring, a 12-year-old recruiting company in Greenville. "I'm
going to the next level where I need to think like a CEO instead
of a small business."
WHY THEY EXIST
Local chambers of
commerce and economic development agencies have launched
accelerators to help minority businesses create jobs. Officials
say the inability of minority companies to expand holds back a
region's economic growth.
"Look at the
number of minority business enterprises and how many are able to
build jobs. It's grossly disproportionate from their majority
counterparts," says Nika White, vice president of diversity
and inclusion at the Greenville Chamber of Commerce.
One reason for
the disparity is that a small company may not have the
infrastructure, such as computer systems, and the experience to
operate on the level needed to fulfill a big contract, says
Jeffrey Robinson, a professor of management and entrepreneurship
at Rutgers University. He is working on the Newark accelerator.
leap you have to take from the five-person company to a couple
hundred, to being a multimillion-dollar company. You can't run
them the same way," Robinson says.
companies still aren't getting the big contracts they should, says
Leonard Greenhalgh, a professor of management at the Tuck School
of Business at Dartmouth College. One of his specialties is
minority businesses and their role as suppliers to larger
companies. Big businesses tend to keep the same suppliers for
years unless there are problems or a technological change, he
males buying from white males," Greenhalgh says.
"Minority- and women-owned suppliers are both incredibly
important to the future of the economy. That's why you need
accelerators. Those owners have the odds stacked against
There's also a
perception in the business world that minority companies aren't up
to the task, says Gravely, the TriVersity owner. Other companies
believe minority businesses may not be able to fulfill a contract
because they don't have enough workers. Some believe that minority
businesses aren't professional enough.
"I've got to
overcome a negative perception — not negative to me personally,
but generally. I have to prove a capability," says Gravely,
who's also chair of the Cincinnati Chamber of Commerce.
LIFE IN THE
companies set long-range strategic plans with the help of their
mentors. They meet at least four times a year and many are in
touch regularly. Through the program, the companies learn how to
become larger players. If needed, mentors help companies build a
management team and change how they operate.
During one of
German's meetings with TriVersity, she realized the company didn't
have a formal budgeting process.
us, 'that's a weird way to do your budget,'" Gravely recalls.
"She wasn't mean about it, but she said, 'I have some
suggestions," TriVersity revamped the way it did its budget,
and ultimately hired a finance manager.
generally mentored for a year or more by accelerator employees and
some big corporations that do business with minority companies.
After nearly nine
years in the Cincinnati program, the goals for World Pac Paper are
still to grow through contracts or expansion.
with them on their strategy every year, who they're targeting,
what industries they're trying to get into, what products or
services they want to add," says Denise deSilva Litter, a
mentor in the program. "A lot of the work we do with (owner
Edgar Smith) is conversation, what kind of companies should you
look to acquire, do they have products similar to what your
company already offer?"
Litter, who has
worked in corporate purchasing, and other mentors are in continual
contact with the big corporations and organizations that agree to
work with companies in the accelerator to find out about available
contracts that might be a good fit.
encourage one of our portfolio companies to go after every single
company in Cincinnati. We want them to fine-tune their strategy
and their focus on who is the right company," she says.
After a target is
chosen, Litter helps a small business set up a meeting with the
larger company and prepare its sales presentation.
That was the
appeal of the accelerator for Tillie Hidalgo Lima, the owner of
Best Upon Request, a concierge services provider that has been in
the program since 2010. Her company was already growing, but not
thriving the way she hoped.
has helped her get contracts with Fifth Third Bank Corp. and the
Cincinnati Children's Hospital Medical Center.
"I saw the
accelerator as something that could give us a lift," she
Companies in the
accelerator can also be mentored by some of the big corporations
that work with the accelerator. When World Pac first began working
with Macy's shortly after Smith started it in 2004, the paper
company was selling the retailer paper for newspaper advertising
inserts and catalogs. As more customers have started shopping
online, there's less need for paper and more for mailing cartons.
The relationship with Macy's has contributed to World Pac's shift
to more of a cardboard supplier, and it is now making shopping
bags for the retailer, Smith says.
"We had to
scale up sooner than later and Macy's, our first Fortune 500
customer, played a significant role in that effort," Smith