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Big Bucks from Big Business

Content provided by the Women's Business Enterprise National Council

If you are a woman or minority business owner, there is no greater opportunity to grow your business than to access the corporate market. This holds true no matter what product or service you offer, and no matter how big or small your company. Whether you are entirely new to supplier diversity initiatives or you are a certified pro, this chapter provides an essential overview of the ever-growing supplier diversity industry.

As you can see in the preceding chart, corporations represent a significant portion of revenue for women business owners. According to the 2003 Access to Markets survey conducted by Women's Business Enterprise National Council (WBENC)
• 56 percent of the revenues of women's business enterprises with $1 million or more in sales came from large corporations.
• 40 percent of the revenues of companies with revenues below $1 million came from large corporations.
Do not wait another minute to join this community. For a full list of corporations that currently accept WBENC Certification, visit
www.wbenc.org/opportunities/certification.html.


FAQ: Could my company really win a contract with a large corporation?
Women and minority business owners new to the world of supplier diversity are often surprised at the range of businesses—from sole proprietorships to multi-million dollar sompanies—supplying to large corporations through this exciting door to opportunity. Here are a few examples:

• Barbara Singer, a New York-based photographer, won a contract to take headshots of executives at Pfizer.

• Linda Laino started her company, Festive Productions, as a small DJ business in Long Island, New York. Upon encouragement from Lynn Boccio, vice president, Strategic Business and Diversity Relations of Avis Rent A Car and Budget Rent A
Car, Festive became certified and is now a successful production company creating
large-scale events for such companies as Avis and Hertz.

• Anastasia Kostoff-Mann, chairman and founder of The Corniche Group, based in
West Hollywood, California, provides travel management to the Los Angeles
Dodgers, thanks to the recommendation of Major League Baseball to become
certified.

• Bonnie O’Malley and Cindy Sedlmeyer’s Branford, Connecticut-based business,
ExhibitEase LLC, designs exhibit booths, banners, graphics and visual presentations
for corporations such as Colgate, Major League Baseball and Pfizer, as well as
designing a display for their local certification organization, the Women Presidents’
Educational Organization
.

• Nina Eisenman, president of Eisenman Associates, a graphic design firm in New
York City, won contracts to design and produce the annual reports of UST and
PepsiCo, and to design and produce a brochure for Aetna.

• Betty Lau, co-founder of Applied Information Services in Somerset, New Jersey,
provides customized software development, e-commerce and Internet technology
solutions for such clients as Prudential Financial, Johnson Controls and Motorola.

• Diana Conley left an elementary school teaching career to start her Illinois-based
company, ComputerLand - Downers Grove. Her staff is vendor-trained and service
authorized for sales, installation and repair of PC equipment. IBM uses her company
as a subcontractor for many projects.

• Lynn Griffith, president of Welcome Florida, provides corporate destination
management for companies including Office Depot, Coca Cola and Travelers.
• Sherra Aguirre’s company, Aztec Facility Services, based in Houston, Texas,
provides housekeeping, landscaping, window cleaning, carpet cleaning and related
facility maintenance services for Fortune 500 clients.

• Rita Meyers is president and her daughter, Stacy Ames, is vice president of Falmer
Thermal Spray, a 43-year-old WBE-certified full-service thermal spray coating
operation based in Lynn, Massachusetts. Customers include Raytheon, Invensys,
MIT Lincoln Laboratories and Osram Sylvania.

• Betsy Mordecai, president of Denver, Colorado-based MorSports & Events, was
encouraged by MasterCard to apply for certification, then received a three-year
contract to provide special events and meeting planning services for the company.

• Amy Birnbaum, CEO of Royal Coachman Worldwide, provides limousine service,
employee shuttles and chauffeured ground transportation services for such companies
as Cendant Corporation, Pfizer, Avon, Citigroup, Honeywell and Novartis.

And…Who Woulda Thought?

Here are some surprising products that led their producers to huge procurement contracts:
• The U.S. Defense Department, for example, purchases dog collars from a GME in
Martinsburg, West Virginia.
• Harley Davidson buys leather “thong” cell phone holders from Niki Beavers of Jeva
Technologies, a GME in Hillsboro, Florida.


WHY is there a need for supplier diversity programs?
“As large company buyers, we set up barriers that we do not even know we are raising.
We have to make a special effort to go beyond doing business as usual. Supplier
diversity programs are the way we make certain the barriers come down.” - Jerry Martin, former senior vice president, Global Purchasing, Frito-Lay

As defined in the Introduction, supplier diversity programs are corporate initiatives to
create mutually beneficial business relationships between previously disadvantaged
Growth Market Enterprises (such as women, ethnic minorities and disabled business
owners) and large corporations that can purchase their products and services. While
many companies have a lot of catching up to do, at least 350 of the Fortune 500 are eager
to do business with diverse suppliers like you.

Supplier diversity programs also exist because smart corporations know that the
demographics of the American economic landscape have changed dramatically and they
must do business with the diverse groups that represent their supplier and customer base
today and into the future. Besides the fact that women and minorities are starting
businesses at a rapid pace, we are also growing by leaps and bounds in number and in
consumer power. Corporate America cannot afford to lose our business. Consider these
numbers:

• African American consumers represented $631 billion in buying power in 2002,
spending $130 billion on housing, $52.4 billion on food, $48.7 billion on cars and
trucks and $14.5 billion on health care.i
• The Hispanic and Asian-American populations in the United States are expected to
triple by 2050.ii
• The buying power of Hispanics was $653 billion in 2003 and is expected to grow
more than that of any other group in the next 10 years.iii
• American women overall spend more than $3.7 trillion a year, making them the
largest consumer nation in the world!

Why am I so passionate about the opportunity for GMEs to do business with corporate
America? Because we can! The numbers prove that we are only at the tip of the iceberg:
The Center for Women’s Business Research has documented that more than one-third of
all businesses in the United States are woman-owned. They are capable of providing a
much larger share of the contractual needs of corporate America—currently accounting
for less than four percent of corporate procurement. According to the NMSDC,
minorities represent 28 percent of the population of the United States, but minority
businesses represent only 15 percent of total businesses and three percent of gross
receipts.

At the top of the list of those companies that “get it” is Avis Rent A Car and Budget Rent
A Car, formerly part of the Cendant Car Rental Group (CCRG). The program, started by
Lynn Boccio in 1996, has grown to five dedicated staff members and its diversity spend
has significantly increased in the past decade. How does the company demonstrate its
commitment? Avis was the first corporation to start with DivTRAK, a state-of-the-art
tracking system that monitors supplier diversity performance. The company sponsors
and/or supplier diversity staff attend over thirty national and regional conferences and
trade shows annually in connection with the Supplier Diversity Program. Team members
serve on the boards of various advocacy organizations, as well as on planning and project
committees. And, according to Lynn Boccio, “Our president, Robert Salerno, and senior
management totally support the concept and everyday efforts regarding supplier diversity
in all aspects of the business.”

As you can see, some companies are “getting it right” when it comes to supplier
diversity. More and more companies improve their initiatives every day, and it is worth
noting which companies are making an effort to create a strong supplier diversity
program when you are deciding which corporations to target as prospects. Look to the
WBENC and the NMSDC websites for news on corporations that are implementing new
programs, or companies excelling with existing programs. The NMSDC names a
Corporation of the Year and WBENC presents America’s Top Corporations for Women’s
Business Enterprises annually. Affiliates of the NMSDC and WBENC honor companies
on a regional level as well.

WHAT defines a corporate supplier diversity program?
Corporate supplier diversity programs vary from company to company, but their function
is to serve as internal advocates for women and minority suppliers. Consider the mission
statement of the UPS Supplier Diversity Program:
“We provide access and equal opportunity to diverse suppliers and promote and develop
these suppliers within and outside our organization. We are committed to ensuring that
our Supplier Diversity Process strengthens the small, minority- and woman-owned
businesses that drive economic development in the communities we serve.”

As you can see, the goal of UPS and other corporate supplier diversity programs is to
help you succeed.  Specifically, supplier diversity programs incorporate a combination of the following
elements:

• Outreach – Corporate supplier diversity professionals actively seek relationships
with diverse suppliers like you. They find GMEs through involvement with
minority and business development organizations (see Chapter Four for more
details on various associations and networking groups), participation in various
business fair activities and creation and maintenance of informational websites
that solicit diverse vendors. Often they will identify appropriate GMEs as soon as
they hear of a Request for Proposal (RFP) somewhere in their organization.

• Certification – Corporations verify that businesses seeking to participate in their
supplier diversity programs meet the criteria of ownership, management and
control to qualify for their initiatives. Many companies offer certification
workshops and training or partner with recognized certifying organizations like
WBENC and the NMSDC to help facilitate the certification process. (The next
chapter will walk you through the certification process in detail.)

• Qualification – Supplier diversity staff review the capabilities of GME
businesses and refer them to appropriate purchasers for consideration as vendors.

• Development – They also review additional needs of GME suppliers and explore
ways to provide assistance to them through training, education and, in some cases,
formal mentoring. Supplier diversity professionals help GMEs define their value
propositions, often advising GMEs on how to better manage cost, margin and
rice variables.

• Utilization – Supplier diversity staff participate in the purchasing process,
partnering with purchasing managers in the department needing your product or
service. For instance, if you are a temporary staffing company, your supplier
diversity contact would facilitate your relationship with the company’s Human
Resources department and other specific areas that need temporary workers. IT
staffing in particular has become a major area of opportunity for GMEs.

• Tracking – Supplier diversity departments monitor and report on supplier
diversity practices to achieve the company’s targets and continually improve
results. Most companies set goals for their diversity initiatives that must be met
on an annual basis. Typically, today’s corporations utilize sophisticated databases
that “scrub” procurement lists to identify which of their current and prospective
suppliers are woman- or minority-owned and what certifications those companies
hold.

Progressive companies monitor their success in supplier diversity through various
benchmarking procedures. In 2004, WBENC issued a “Balanced Score Card”
(featured in Appendix A) for use by its corporate members in evaluating their
progress toward internal goals. One of WBENC’s corporate members, Eva Chess of
RR Donnelley, recently commented that the score card tool, a benefit offered by
WBENC to its corporate members, was alone worth the cost of her annual dues to our
organization. WBENC actively supports tracking so we can guide certified WBEs to
committed companies, and “encourage” other companies to improve their practices.
 

HOW do I decide which corporations to target?

Tip #1: Look for customers committed to supplier diversity.
As you are beginning to see, some corporations are more committed to supplier diversity
than others. I highly recommend that you begin your process of targeting potential
corporate customers by researching which companies foster strong supplier diversity
programs. These are the companies who will be most receptive to the strategies outlined
in this book.

How do you begin to research corporations that might be potential customers for your
particular products or services? The first point of entry I always recommend is the
Internet. Virtually every corporate supplier diversity department in the country offers an
informative website that tells you most of what you will need to know to make your
initial approach. It is a good idea to visit as many supplier diversity websites as possible
to review various program structures. The more information you can gather, the better.
I also recommend using search engines such as Google, entering key words from your
business (e.g. software, marketing, electrical components, administrative services, etc.)
and the words “supplier diversity.”

As we will explore in Chapter Three, corporate supplier diversity websites feature lists of
what, when and how they buy from GMEs. I recommend compiling a notebook or
individual files containing information and notes about each company’s supplier diversity
program so you can keep track of your prospects. Some websites offer downloadable
reports and information that may be easier to digest offline. It is also smart to keep a list
of any GME suppliers featured as “success stories” (a popular feature of many supplier
diversity websites), as you may want to make contact with some of the owners of these
businesses as you progress through the process of becoming a supplier.

Tip #2: Get involved early and often.
The Internet is a necessary and helpful first step in your research, but you must
accompany your online efforts with offline endeavors. While much of the supplier
diversity process now takes place online (see later chapters on certification and
technology), face-to-face interaction is still a significant component of the purchasing
process.

The best way to research supplier diversity opportunities offline is to become involved
with one of the many organizations that provide educational and networking
opportunities for GMEs. Chapter Four will recommend many strategies for networking
in the supplier diversity community, but your first stop should be your local or regional
affiliate of WBENC or the NMSDC. While you may already be a member of your
industry association, many GMEs have never connected with the supplier diversity
factions of their membership organizations. Ask your association contacts to introduce
you to any supplier diversity or procurement professionals in the organization as you
begin to explore this new business opportunity.

To find even more face-to-face opportunities, pay close attention to calendar listings on
the corporate websites you are researching. As mentioned above, many companies’
missions include extensive outreach to potential vendors, so they regularly sponsor
information sessions and business fairs to provide opportunities for you to meet their
staff, purchasing executives, successful GME suppliers, non-profit partners and other
experienced professionals who can help you through the process. It is true: companies
offer events to educate you on how to sell to them! WBENC-Discuss@wbenc.org, our
listserv for certified WBEs, provides additional information about corporate and
government briefings, procurement conferences and business expos. If you are certified
by WBENC and keep your online profile up-to-date, you will receive this information as
a matter of course. Other associations provide similar informational services as well.
Do not forget to log the information you gather at live events in your trusty notebook
containing your Internet research. Be sure to take copious notes—all of this information
will be useful as you navigate the supplier diversity process.


WHO works in the supplier diversity field?
The supplier diversity field is a professional industry like any other, with experienced
practitioners doing their jobs day-in and day-out. I have talked to some of the top men
and women in the field in order to understand the supplier diversity process from their
point of view: what their workday looks like; what they look for in a supplier; what
impresses them; what annoys them; and what you can do to build a strong relationship
with them. Their advice and success secrets appear throughout the book.

In order to succeed as a supplier, you will need to develop close, trusting relationships
with the supplier diversity staff at the companies you target. Purchasing professionals
regularly cite “strong relationships” as one of the leading success factors for GME
suppliers. Supplier diversity managers truly are your allies in the corporate purchasing
process. With all that is said about high tech these days, “high touch” is still important in
building business relationships, and supplier diversity is no exception.

In fact, I truly believe that the single most important success factor for GMEs is the
building and maintaining of relationships with supplier diversity professionals. Supplier
diversity executives’ jobs are to find qualified diverse suppliers for their companies’
needs and advocate on behalf of YOU in the corporate purchasing process. The better
your relationship with these advocates, the better your chance of being “top-of-mind”
when new contracts arise. Do not just take my word for it. WBENC’s 2003 Access to
Markets Survey found that 97 percent of women entrepreneur respondents rated
relationships with decision makers as a key success factor in doing business with large
corporations.

Many corporations also have purchasing councils and supplier diversity advocates
throughout the supply chain to further advocate on your behalf. The supplier diversity
executive is in regular contact with these additional individuals, knows what they are
looking for and can provide you with fast-lane access to the appropriate buyer.
Additionally, supplier diversity executives network across companies and share
information about their most successful GME suppliers.

 A Day in the Life
It is important to understand the roles and responsibilities of supplier diversity executives
so you can help them achieve their goals. While responsibilities vary depending on the
level and experience of the executive, consider these elements that might be found in the
position description of a supplier diversity executive:
• Identify and build relationships with qualified, diverse suppliers in order to
recommend them to purchasers across the corporation. (Many supplier diversity
professionals travel extensively to conferences, business fairs, seminars, award
banquets, association meetings and activities, presentations and face-to-face meetings
with GME suppliers.)
• Sit on the boards or committees of various local, national and regional certification
organizations, associations, councils and GME businesses.
• Respond to GME inquiries and work with GMEs to educate them on the needs of the
corporation and the requirements for becoming a supplier, including the importance
of certification (see Chapter Two). Provide mentoring and advice as appropriate.
WBE Linda Laino, CEO of Festive Productions, captures this role of supplier
diversity professionals in describing her relationship with Lynn Boccio, vice
president, Strategic Business and Diversity Relations, Avis Rent A Car and Budget
Rent A Car. “Lynn has taken me by the hand from the beginning, including
nominating me to sit on the WBENC National Forum. She is always there to give me
advice. If we need anything we call each other, even for recommendation letters.
She tells me what she thinks I should be doing differently, and who I should meet.
She has taken me by the hand and introduced me to every supplier diversity person
she can. She never does not have time for me.” As mentioned previously in this
chapter, Lynn encouraged Linda to become certified in the first place.
• Train corporate purchasing personnel across the corporation about the need to include
GMEs as suppliers.
• Obtain requirements from prime (First Tier) contractors to facilitate Second Tier
opportunities for GMEs (see Chapter Five for more information about Second Tier
supplying).
• Manage the supplier diversity website and other program-marketing collateral.
• Track results of the supplier diversity program to meet the company’s goals, as set by
the company’s CEO and senior management.


Cheat Sheet: Getting to Know Your Supplier Diversity Contacts
Be sure to find out the following information about any supplier diversity professional at
the companies you target, and keep this information updated as you move through the
process:
Name: (Never misspell the name of someone you are trying to impress!)
Title: (Be sure to get this right as well. Titles vary from company to company and
change frequently.)
Company:
Contact information:
Preferred method of communication: (e-mail, phone, cell phone?)
Assistant’s name:
Areas of responsibility: (What internal departments, geographic regions, and/or
ethnic markets does this person oversee? Again, responsibilities vary by company.)
Name of regional or local contact person (if different from above):


WHEN do companies make their purchases from diverse suppliers?
Purchasing schedules vary from company to company and product to product, so you will
need to research timing with each individual company you choose to target. I will say,
however, that selling to corporate America can be a very long process—lasting from
several months to several years—but, as the following chapters will demonstrate, the
rewards are well worth the wait. I encourage you to be aggressive, but also to be patient.


WHERE do I get started?
The best way to launch yourself into the world of supplier diversity is to become
certified. The next chapter will show you how.

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