Capital, connections and capacity were among the topics at “Show MEM the Money,” a panel Monday night at Clayborn Temple.
Four successful minority business leaders gave the crowd insights into the business world, along with guidance on navigating an economy that’s financially dominated by white males.
The panel, part of HuffPost’s “Listen Across America” bus tour, was held in conjunction with High Ground News.
Moderated by Wendi C. Thomas, MLK50: Justice Through Journalism editor, the panel included Jozelle Booker, president of the Mid-South Minority Business Continuum; Floyd Tyler, president, founder and CIO of Preserver Partners; Alexandra Matlock, CEO of ContigoCreative and president of the Mid-South Latino Chamber of Commerce; and Carolyn Hardy, CEO of Henderson Transloading Services and the first black chair of the Greater Memphis Chamber of Commerce.
As she introduced the panelists, Thomas recalled Dr. Martin Luther King Jr.’s message that black-owned businesses are essential to the economy.
“Black businesses were so critical to economic freedom that they were part of Dr. Martin Luther King Jr.’s last speech,” Thomas said. “This community is taking a hard look at what it’s done with his sacrifice.”
King emphasized the importance of redistributing political and economic power, Thomas said. Today, while blacks clearly have a stronger political presence in Memphis than they did 50 years ago, minority-owned businesses, including those owned by women and Latinos, are still struggling.
According to a U.S. Census Bureau 2015 report, which was based on information from 2012, African American-owned businesses earned 0.83 percent of all the revenue that came into Memphis, while female-owned businesses earned 2.73 percent of all revenue — even though, between 2007 and 2012, the number of black-owned businesses in Memphis doubled. According to Thomas, just under 13 percent of the city of Memphis’ city contract spending went to black-owned businesses, one-third of a percent went to Hispanic-owned businesses and a little more than 6 percent went to female-owned businesses.
Most wealth in America comes from intergenerational transfer, Thomas noted. Since many minority-owned businesses are first-generation, they don’t benefit from a financial legacy or a history of business relationships.
One barrier that keeps white-owned firms from doing business with minority-owned businesses, Thomas said, is discrimination.
Public versus private?
The panelists gave the public sector higher marks than the private sector in willingness to do business with minority-owned firms. Booker, who developed the Memphis Light, Gas & Water Supplier Diversity Program that led to a half-billion dollars in contracts with minority and small firms, said disparity studies are commissioned to look at procurement activities in the program. The analysis, she said, looks at the gender, race and ethnicity of every business owner to which a company awards a contract.
“After they analyze they create an index. Any index less than 1 shows the disparity,” Booker explained.
She added disparity studies also look at the surrounding area.
“The consultants also look at what’s happening in the greater community and if they are doing businesses with such (minority firms), even if there are no disparity goals,” she said.
The support of the MLGW board has been instrumental in the supplier diversity program, Booker said. The board that supported the start of the diversity program in the late 1990s had three black and two white members, and has maintained its racial diversity, benefiting MLGW’s business reputation.
“They are rock stars in the city,” Tyler, of Preserver Partners, said of MLGW.
In the private sector, panelists agreed, shareholders have to hold a firm responsible for contracting with minority-owned companies.
“That data’s much harder to come by, but some companies have services like Black Enterprise Magazine.… You also can look to the representation of the senior leadership, board and employees and build a mosaic,” Tyler said.
King said if a company is located in a city with a 30 percent black population, then 30 percent of a company’s employees in that city should be black, Thomas noted.
Tyler and Hardy, of the Greater Memphis Chamber, advised people to ask businesses or nonprofits about their standards for enforcing diversity before investing or donating.
Support your people
Hardy said stereotyping “is a huge problem” for black-owned firms trying to get contracts with larger corporations. “We have to defend our own people by hiring our own people,” she said.
Matlock, of ContigoCreative, said Latinos face the same problems when trying to get work. “If the people understand the passion we all put into our jobs… (and) the dedication, the love, the desire to make good in this country. We just want to be included in opportunities. That’s all we’re asking for.”
Matlock pointed out that Latinos have “tremendous spending power.” Last year in Tennessee, she said, the nearly 9,000 Latino businesses brought in almost $2 billion.
Although Tennessee is boasting a high unemployment rate — below 5 percent — in inner-city communities such as Hickory Hill and Frayser, the unemployment rate is as high as 20 percent, while 30 percent of children in Memphis live in poverty.
Are efforts to get white businesses to work with minority businesses going far enough?
“The Chamber wouldn’t be surprised for me to say it’s never far enough,” Hardy said. “One of the things I will tell you is women hire other women and minorities hire other minorities…. The Chamber is doing a lot. But the Chamber is a member-driven organization.… We need higher goals; we need more people stepping to the plate.”
Help is available
Hardy said the Chamber offers an online portal that allows a business owner to supply information, including years of experience and skill sets. Still, she said, there are people who won’t change their operations.
“There is that 10 percent you’re never going to change,” Hardy said. “We refuse to give up, we just leave that 10 percent alone.”
Booker said MMBC has been tracking data since 2008 and about $2 billion has been spent with minority- and women-owned businesses, while 9,000 jobs were created by them.
Many black-owned businesses are not employer firms, with workers and a payroll, Booker said. “The way forward for us is to scale those non-employer firms up to be employer firms, and with that you have a changed community.”
Booker said the MMBC has a plan to participate in joint ventures with minority companies as a way to expand their capacities. Booker also advised using research to start a business. “Research high-growth industries … (and) find out what industries are in demand of the things they need.”
But building relationships and grabbing opportunities when they arise were the two most important tips the panelists had for minority-owned businesses.
Hardy said the best way to make a relationship last is to do a favor for someone — and not ask for anything in return. “You never take advantage of your friends,” she said.
For Matlock, pride in Memphis is a starting point in business. “Love your city, believe in your city,” she said.