at Allied Van Lines and has 26 years of experience in the moving business, devised a program for Fed Ex to evaluate his services during their busiest moving season-May to September.
After several meetings to shore up the deal, Stokes came armed with a proposal for a solution to the problem he had identified-inferior service provided by the previous relocation firm.
“Fed Ex employees weren’t getting good service,” says Stokes. “I did a needs analysis and put together a solution based on the homework I had done. I started to benchmark companies in the service industry of similar size to Fed Ex to see how they were doing compared to their competitors.”
Stokes used performance-based pricing, whereby each employee was asked to complete a telephone survey to assess Alliance’s services. The company was then paid based on a grade assigned by each respondent. “Fed Ex was impressed so,” says Stokes, “they offered to use our services exclusively.”
Stokes, Smith and others say they often face skepticism on the part of corporate representatives who feel that as small, minority businesses, they aren’t up to the job. They find it challenging to be perceived for what they are: qualified, experienced businesses that can bring value-added services or products-which happen to be minority-owned. To overcome this, they strive to provide superior quality products and services with complete customer satisfaction.
“Minority firms must meet quality standards, learn and understand the industry beforehand, have good business acumen and be profitable and growing,” says Jensen. “We look for a quality product that won’t be overtaken by technology and concentrate heavily on the management team. We believe this shows the potential of what the company can be.”
To combat the perception of being small, industry experts say small firms need to grow their businesses through strategic partnerships,public offerings and acquisitions of other companies.
“Minority firms are now more financially able to purchase or grow certain types of businesses,” says Phyllis McCarley, manager of global supplier diversity at IBM in Somers, New York. “In the past, they were more dependent on corporations; now more corporations are willing to provide investments in minority businesses to help them grow.”
Many corporations provide supplier financing such as AT&T and Ford, which has a minority enterprise small business investment corporation, resulting from a joint venture with the Small Business Administration. NMSDC’s Busin
ess Consortium Fund makes available $100 million in working capital loans to certified companies eligible for financial assistance.
Anthony Jenkins, president of Stratford Safety Products Inc., a personal protective equipment firm in Chicago, is backed by several venture capital funds that invested $3.15 million in his company because they recognize his potential for growth, he says.
Jenkins has acquired several companies since staring his firm a decade ago. Last year, he made three acquisitions, resulting in $5 million in sales. This included a fourth Duracell plant (Duracell is a major client) in Lexington, North Carolina, which was strategically located across the street from one of the battery company’s warehouses.
“We acquire companies every few months,” says Jenkins of his $15 million