MEDWeek: Small Businesses Seek Suitors

MEDWeek: Small Businesses Seek Suitors

Although his business is just about five years old, Kevin E. Smith, president of KES & Associates, a Baltimore-based construction firm, has attended enough conferences to know that often the most valuable thing one leaves with is the ubiquitous sponsor-branded nylon bag. Still, he signed up for three mentor-protégé matchmaking sessions sponsored by the Small Business Administration at this week’s MEDWeek conference with the hope of starting a relationship that could help his business grow.

SBA’s mentor-protégé program enables large companies to provide a variety of assistance to 8(a) firms, such as technical, management and financial assistance. Ideally, the larger concerns also will offer subcontracting and joint venture opportunities.

Much like a social speed dating event, businesses participating in Monday’s matchmaking session were given just 20 minutes to discover whether they might have a future together. Smith, who has won two federal contracts on his own, is looking for a partner that can provide both the access and capacity that his firm needs to go after larger contracts.

“With a mentor, you can increase your bonding capacity overall to perform larger contracts,” he said. “It’s the capacity that’s at issue. This is a tough economy and getting a line of credit or financing is difficult. Mentors that have been in business for a while have that set up.” In addition, he says, small firms are forced to compete in the federal marketplace with larger firms that have greater access to lines of credit and other financing streams, making it more difficult for people like him to get their feet in the door. Smith met with two promising prospects and immediately scheduled a follow-up meeting with one.

Surprisingly, mentor firm Hammerman & Gainer Inc. was less successful in finding a match. The Louisiana-based firm is the nation’s largest minority-owned claims support firm and played a big role in the claims process for victims of hurricanes Katrina and Rita. The firm is hoping to work with BP claims czar Kenneth Feinberg.

Albert White, a senior vice president at the firm, says there’s a serious lack of minority-owned firms with relevant claims experience.

“We’re bidding for a Health and Human Services contract and looking for a subcontractor. Because the project is an 8(a) set-aside, 51% would go to the 8(a), so [a prospective protégé] would have picked up that kind of opportunity,” White lamented. “HHS has stated that it’s having a difficult time finding small firms and 8(a) firms that can participate in their contracting arena right now. They’re looking, but can’t find them.”

Up Next: Export 101 — MED Week focuses on export basics and introduces entrepreneurs to the resources they need to start selling products and services overseas, with a special emphasis on doing business in Africa.