Can there really ever be too many small and diverse businesses? The quick answer is, no. Small businesses are the economic engine of the economy. However, if you sit on that question for a minute…the answer could soon become, yes. There is an oversaturation of small and diverse businesses in today’s economy in areas of janitorial, consulting, education and health services to name a few. In Dallas, according to the 2015 Dallas Economic Development Profile, in 2014 nearly 85% of the businesses were considered small. This consideration is established through self-certification and size determinations outlined by the Small Business Administration (SBA). The majority of these businesses fall within Trade/Transportation & Utilities and Professional/Business Services. Nearly 20% of the businesses were classified as woman owned, with the majority them comprising areas of Education & Health Services with 25.7%; and 36.4% of the 15% minority owned firms being categorized in Education & Health Services. Now, with the statistics out of the way, I ask again…can there really ever be too many small and diverse businesses? (This is just a snippet of information related to Dallas, TX!)
Yes…there absolutely can, when these areas mentioned above are being oversaturated with companies who perform similar services. There is only so much potential to offer a value added service or product that sets you apart for from your competitor. Additionally, there are only so many contracts and opportunities out there for businesses. (Yes, that is the honest truth – whether you agree or not) In my 17 years in the minority and small business industry, I have seen a hundreds of companies start up with the grand plans of capturing that lucrative contract with the public or private sector and hitting it big. Oh, the dreams are awesome and I wished every single one of them well. However, the reality of the situation is that they were vying for contracts, which sustainable incumbents held and had no intention of letting go. Furthermore, the owners of the contracts had no true desires to change their current contractor or supplier, because frankly there was no problem with the supply chain process, product or service (these are the main reasons companies seek alternatives).
So, what would I suggest? A consortium, a technical and tactical group of professional businesses that could go after opportunities as a turnkey operation. Did you all hear me? Ok…good because I thought I lost you at the same point that I lost the countless other firms I broached this topic with, “group”. “Sheena, do you mean that we would all work together?” Why, yes I do! You see, in this economy you can’t go in as the lone soldier to acquire a long sustaining contract, with a company who has incumbents that can perform to their clients’ expectations, without a full arsenal behind you, next to you…heck with you! The truth of the matter is that as a collective community – black owned businesses overlook the benefits of truly “partnering” with one another to obtain to the greater good. Build your wealth, by building your base. It is the same “good-ole boy” mentality just at your advantage. Put your team together – general contractor, specialty trade contractors, landscaping contractors, materials suppliers, IT & Telecommunications contractors, and consultants.
It is no different than these “teams” who win large local projects like the Horseshoe (I35E) project, or the DFW Airport Revitalization project, or the Parkland Hospital project. It’s just in this case you are utilizing the same team members, each one building their own wealth while building the wealth of the group and making your mark on the industry. How do you think these large businesses increased their capacity and capability? Yes, they had partners.
I am not going to preach on the breakdown in the minority community, because this thinking of “one man for himself” isn’t as prevalent in the Hispanic and Asian business communities. You can see the benefits of partnering and the sharing of resources in these communities, more than in our own. Not to say that there aren’t black business owners who are pulling resources together and partnering to create sustainable and relevant business models – but, there are few. It is almost as if the “community” the “tribal collective” the “neighborhood support” focus has faded into the convoluted ideals that there is an “equal playing field”. Honestly, it is either team up and establish some serious business presence or keep seeing statistics such as those above, where the same firms are vying for the same businesses and putting each other out of business.