| Researchers from the Atlanta business consultancy, | | | | entrepreneurs, many minorities and women have a |
| The Hackett Group, surveyed 50 companies with | | | | desire to be all things to all people. That's |
| median revenues of $7 billion and a median | | | | understandable. Sometimes projects that complement |
| procurement spend of $3 billion (Wall Street Journal, | | | | your niche pay the bills. However, these projects |
| August 2006). They found that firms that 'focus | | | | should be the exception, not the rule. |
| heavily on supplier diversity' generate a 133 percent | | | | Creating a niche position in the market allows for good |
| greater return on procurement investments than the | | | | short-term prospects and the potential for long-term |
| typical business. In these economic times, those | | | | business beyond your initial position. It is an excellent |
| numbers can not be ignored. | | | | tool to differentiate your business and protect your |
| News of the many positive results of supplier diversity | | | | market space from competitive new entrants. A |
| programs boosts support for these initiatives. It can | | | | defined market position that targets a niche product or |
| also provide more opportunities for minority- and | | | | service presents a great opportunity to attract new |
| women- owned businesses (M/WBEs). | | | | customers or to offer your services in a new location. |
| Starting with the supply chain, some organizations are | | | | Define what your company does better than any |
| establishing relationships in increasingly diverse markets | | | | other in your industry, large or small. Find the market |
| and gaining a competitive advantage in the U.S. and | | | | for your niche and become the very best. |
| globally. | | | | W/MBEs that successfully embrace these business |
| How can M/WBEs leverage the growing number of | | | | fundamentals have a pronounced impact on the |
| opportunities available through corporate supplier | | | | economy. Consider the following: |
| diversity initiatives? How can they sustain business | | | | - Women-owned firms are growing at a rate nearly |
| relationships leading to the long-term growth of their | | | | twice the U.S. average, contributing $1.1 trillion in |
| business? | | | | revenues to the economy and creating jobs for 7.2 |
| Here are 10 steps that are guaranteed to produce | | | | million Americans. |
| positive results: | | | | - U.S. companies owned by women provide more than |
| STEP I | | | | 12 million jobs while Fortune 500s employ less than 11.7 |
| Produce High Quality Products. It is not sufficient for | | | | million jobs and are shredding between 200,000 - |
| your products to be good. Differentiation of your | | | | 300,000 jobs per year. |
| products and services based on the highest level of | | | | - The fastest growing segment of small business is |
| quality provides insulation from competitive rivalry, often | | | | African Americans, which experienced a 45% |
| based on price, and creates customer loyalty. | | | | increase since 2002. |
| Introduce the unique benefits of your products and | | | | - The fastest growth rate of all minority-owned |
| services to your customers, highlighting the high quality | | | | business (African-American) is increasing faster than |
| solutions it offers to their problems. | | | | the national average of 10% per year. |
| According to Paul Belliveau, Abbie Griffin, and Stephen | | | | - The number of Latino-owned companies grew 31% |
| Somermeyer, editors of The PDMA ToolBook for | | | | between 1997 and 2002. |
| New Product Development, there's another way to | | | | - In 2002 there were nearly 1.6 million Latino-owned |
| differentiate your product or service in the | | | | businesses producing nearly $222 billion in revenue. |
| marketplace while improving quality: learn from your | | | | - The combined buying power of African American |
| customers how to innovate. | | | | and Latino Americans today is more than $1.7 trillion. By |
| Nabisco was proactive in this regard. Its engineering | | | | 2010, each group independently is expected to reach a |
| group designed modifications to bakery cooking and | | | | buying power of $1 trillion. |
| packaging equipment that increased efficiency and | | | | Sources: CNN Money, Center for Women's Business |
| that were not yet available from the equipment | | | | Research, Forrester Research, U.S. Census Bureau |
| manufacturers. Nabisco then contracted with the | | | | This data clearly illustrates the tremendous net positive |
| equipment vendors to incorporate the modifications | | | | result on the economy when women and minorities in |
| into prototypes for its use. Eventually, the vendors | | | | business are successful. For this reason, the consistent |
| included many of the Nabisco innovations in their | | | | increase in supplier diversity programs in large U.S. |
| standard designs, which Nabisco would then purchase | | | | firms is positive news. These companies are |
| since the commercial equipment was less expensive | | | | committed to maximize M/WBE participation by |
| than the prototypes. | | | | developing equally beneficial business relationships with |
| Whatever your company provides, whether a product | | | | minority and women entrepreneurs. |
| or a service, must be both excellent and relevant if it | | | | STEP VI |
| carries your business name. | | | | Manage your business relationships well. It has been |
| STEP II | | | | said that great entrepreneurs are "married to their |
| Price Competitively. Women and minorities in business | | | | business." Of course, managing a company requires |
| must challenge the perception that supplier diversity | | | | time, energy, and commitment. It is absolutely critical to |
| initiatives are in direct conflict with the corporate need | | | | maintain healthy (and profitable) relationships with all |
| to manage cost. Make sure that your products are | | | | stakeholders. Here are the key relationships that |
| priced competitively. Always charge a fair price for | | | | successful entrepreneurs should nurture: |
| your product. | | | | - Customers |
| It is also necessary for M/WBE's to consistently | | | | - Employees |
| perform cost-benefit analyses comparing product | | | | - Vendors |
| sales and business relationships. Remember to include | | | | - Banker/Accountant/Lawyer |
| the long-term value of the relationship in your analysis. | | | | - Mentors |
| If you are diligent in identifying and providing the | | | | Your customers are the critical stakeholders - they |
| benefits your customers require, you will differentiate | | | | hold the most important key to business success; |
| yourself from your competitors and avoid competing | | | | however, relationships with the employees and team |
| solely on price. Note that some banks communicate | | | | members delivering your products and services are |
| financial security, trust, and esteem while other banks | | | | equally valuable. Vendors are also vital to the creation |
| bombard us with price-driven advertising. This kind of | | | | of great products and services. Of course, your |
| advertising always leads to commoditization of their | | | | banker, accountant, and lawyer help to determine |
| products and competition exclusively on price. | | | | sound financial and legal structure for the business. |
| Wal-Mart and others have a winning low-price | | | | Lastly, it is crucial to have at least one business mentor |
| strategy, but they have a well-designed supply chain | | | | and/or an advisory board to challenge business |
| structure that focuses on consistently reducing cost. If | | | | decisions and provide direction. |
| your company does not have the infrastructure or | | | | STEP VII |
| interest in competing on price alone, you need to | | | | Create an impeccable feedback loop for stakeholders. |
| determine and deliver on the quality and value your | | | | Never underestimate the value of collecting, analyzing, |
| clients desire most. | | | | and responding to the input received from customers |
| STEP III | | | | and important stakeholders. Nothing can replace |
| Delight your Customers. Great customer service is not | | | | customers telling you how they like to be treated, what |
| enough. To differentiate your business, the next frontier | | | | you are doing right, and what could be done better. But |
| of competitive advantage is the customer experience. | | | | you won't learn anything if you don't ask. Remember, |
| For women and minorities in business, it is necessary | | | | your customers don't expect perfection; they want a |
| to differentiate on product/service quality, price | | | | relentless pursuit of quality. Respond to their input by |
| competitiveness and, most importantly, responsiveness | | | | implementing relevant changes. If you really want to |
| and service. It is with service that many of the smaller | | | | "wow" your customers, let them know that you heard |
| M/WBE's have the advantage. | | | | them. |
| Remember to consistently treat each customer | | | | STEP VIII |
| interaction as a precious resource. Again, businesses | | | | Get certified. Another key competitive advantage is M |
| that will thrive in years to come are those that have a | | | | WBE certification. Nothing is more important than high |
| clear competitive advantage in the marketplace. | | | | quality products and service; however, if all things are |
| Creating an organization that is truly focused on | | | | equal, a certified M/WBE status could be your edge. |
| providing superb customer service is the very best | | | | Certification is available through a number of sources |
| way to develop that competitive advantage. | | | | for both minority-owned and women-owned firms. |
| Be responsive. Come earlier. Stay later. Anticipate and | | | | These include the National Minority Supplier |
| solve problems for your customers before they occur. | | | | Development Council (NMSDC) and its 39 regional |
| Send a thank you card. Remember birthdays. Apply | | | | affiliate councils; the U.S. Small Business Administration |
| these techniques to your business consistently, and | | | | 8(a) program and other federal and state government |
| you will begin to develop an emotional bond with your | | | | agencies; local (county and city) government agencies; |
| customers that will not only keep them coming back | | | | the Women Business Owners Corporation; and the |
| for more, but will also have them recommending you | | | | Women Business Enterprise National Council. It is well |
| to their family, friends, and colleagues. Make it personal. | | | | worth the investment to become certified by a |
| In fact, it is personal: it's your business! | | | | nationally recognized body in order to increase |
| STEP IV | | | | credibility with large corporations and government |
| Build Capacity. When a large client makes a request | | | | entities. |
| that a smaller company cannot fulfill because of limited | | | | STEP IX |
| capacity it can be devastating to an existing business | | | | Network. It works! The bottom line is that people do |
| relationship. It can be ruinous to a relationship that has | | | | business with people they know and like. The brand |
| yet to be established. There are two ways to rapidly | | | | "You" is important to your business success - your |
| build capacity for woman and minority-owned small | | | | intelligence, honesty, relevance, and value to customer |
| businesses: 1) hire more people to execute production; | | | | and community needs. Sharp entrepreneurs are keen |
| 2) create strategic alliances with companies that | | | | political and civic participants, always willing to add |
| supply complementary goods. | | | | value to community initiatives like economic |
| For specific project execution, a bias toward strategic | | | | development, workforce development, and education. |
| alliances is recommended. Begin to look for companies | | | | Similar activities allow potential customers to get to |
| with similar products or services and talk about the | | | | know you as both a business owner and an asset to |
| possibility of working together. It is not required that | | | | the community. |
| these are minority and/or women-owned companies. It | | | | STEP X |
| is required that you have shared vision and, most | | | | Continuous improvement is your business strategy. It is |
| importantly, shared values. | | | | absolutely necessary for firms to ensure quality in |
| Strategic alliances can extend beyond promotions and | | | | operations, in business practices, and as individuals. This |
| single projects. They can include joint advertising, | | | | is necessary to mitigate the challenge of competitors |
| marketing exposure, special events, and employee | | | | and to boost the sustainability of your business |
| programs that benefit both companies. As a result of | | | | achievements. The continuous improvement philosophy |
| a fully integrated approach, the overall value to the | | | | allows firms to cultivate a process-oriented way of |
| consumer increases significantly. | | | | thinking and developing strategies, involving people at all |
| In today's changing business world, using the strength | | | | levels of the organizational hierarchy (Imai 1986). In an |
| of strategic partnerships to increase capacity, gain | | | | environment of unremitting advancement, change |
| exposure, and penetrate new distribution channels is | | | | becomes the norm and stagnation is recognized as |
| an exceptionally smart approach. So, ask questions. | | | | the adversary of progress. Ultimately, personal and |
| Study the work of potential partners. Once you find a | | | | professional advancement emanates from the inside. It |
| partner who produces work you admire and who | | | | starts with the strengthening of the principles and |
| shares your values and commitment to service, | | | | values from an individual and institutional level. |
| cherish those relationships for years to come! | | | | We welcome your feedback. Remember, these lasting |
| STEP V | | | | and valuable principles provide insight into better |
| Define Your Niche. One of the most widely | | | | business practices to all entrepreneurs. |
| championed suggestions for small business owners of | | | | Continued success to you and your business! |
| any ilk is, "focus on what you do well." As | | | | |