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Business Accelerator Assists Minority-Owned Companies in Northeast Ohio

Monday, August 18, 2008

Provided by The Plain Dealer
Written by Tom Breckenridge

Daryl Lackey, a top-flight carpenter with aching knees, runs the kind of company this region sorely needs.

That's why business leaders are matching Lackey's aspirations with opportunity through the Minority Business Accelerator 2.5+.

Lackey, 51, is the first business owner to enjoy the benefits of a program targeted at expanding minority-owned businesses in Northeast Ohio with sales of at least $2.5 million.

The accelerator, backed by $1 million from the Fund for Our Economic Future, seeks to build jobs and economic spin-off in black and Hispanic communities.

Research shows that minorities start businesses at a greater rate than whites, but their companies lag in growth.

Locally, there's a dearth of medium- to large-size companies owned by minorities, officials said.

It reflects a national reality. Blacks and Hispanics make up nearly 25 percent of the population yet own just 10 percent of businesses, according to a 2005 study for the Ewing Marion Kauffman Foundation.

Too many of the businesses -- one in four, according to the study -- are concentrated in low-growth industries, such as restaurants, taverns and clothing stores.

Minorities often lack access to technical expertise, capital and the informal, person-to-person networks that build business, studies found.

The three-year accelerator program strives to "put some jet fuel into companies that can get them to the next level," said Brad Whitehead, president of the Fund for Our Economic Future, a philanthropy that's funneling tens of millions of dollars into business-building efforts across 16 counties.

The fuel is 108 employers in the region that committed to hiring qualified, minority-owned companies as suppliers.

Those 108 employers are members of the Commission on Economic Inclusion.

One of the accelerator's targets is to match about 12 minority-owned businesses a year with companies that are commission members, such as Sherwin-Williams Co.

The paint and coatings maker asked Lackey's company, Key General Contractors Inc., to bid on a $190,000 office-renovation job in Landmark Towers off Public Square, after the accelerator program vouched for the company's ability to get the job done.

It's among a growing number of jobs Lackey's company has landed in recent years. He has built his company from a finish carpentry specialist to general construction contractor.

Lackey loves hands-on work. But sore knees were one reason he decided to trade the carpenter's toil for the hustle of bidding construction jobs.

Lackey said he has eight full-time workers but has employed up to 20, depending on the job. His company has done work at the Cleveland Clinic and University Hospitals, and the accelerator expands his prospects, Lackey said.

"We need a program like this," Lackey said. "They are in touch with the companies and actually care."

The accelerator provides a "missing link" --assurance to prospective customers that the minority businesses have the bonding, capital and track record to do the work, said Andrew Jackson, executive director of the Commission on Economic Inclusion and leader of the accelerator effort.

"We open the gate," Jackson said.

The accelerator has registered 30-plus companies so far. Owners sign affidavits swearing their companies are at least 51 percent minority-owned.

The Hispanic Business Association is compiling the accelerator's database of minority-owned companies. JumpStart Inc., a nonprofit investor in early-stage companies, assesses the companies' strengths and weaknesses and helps craft a growth plan.

With half the year gone, the accelerator must hustle to meet its goal of helping 10 companies this year.

It recently helped a Hispanic-owned business, Global Point Technologies Inc., land a $300,000 cabling contract with Case Western Reserve University.

But just two deals in six-plus months is evidence the accelerator is not moving fast enough, says Gus Hoyas, board chairman for the Hispanic Business Association.

He called Jackson to task for not involving three influential nonprofit groups that could bolster the deal making: the Northern Ohio Minority Business Council, which certifies minority-owned businesses; the Urban League of Cleveland, which focuses on small-business development; and the Presidents' Council, made up of leaders of the area's largest black-owned businesses.

All three groups were involved creating the accelerator but are no longer principals in the effort. Jackson needs to bring them in and wring more business prospects from the area's largest employers, Hoyas said.

"We're missing integral players," Hoyas said. "They would be our biggest ambassadors."

A spokeswoman for the Northern Ohio Minority Business Council would say only that the council would help if asked.

The council's involvement with outside organizations might be limited because its charter prevents it from sharing its registry of minority-owned businesses, which pay to go through the certification process.

Jackson said he's working to tap the Urban League's small-business expertise by creating an accelerator for companies doing less than $2.5 million in sales.

And the Presidents' Council stepped back from the accelerator to avoid a conflict of interest -- some of its members might use the accelerator's services, Jackson said.

Business owner Brian Hall, a founder of the Presidents' Council and co-chairman of the Commission on Economic Inclusion, believes the time is right to bolster minority-owned businesses.

Opportunities include multibillion-dollar construction in University Circle, with big projects at the Cleveland Clinic, University Hospitals and CWRU.

University Hospitals already has pledged that 15 percent of all its work, inside or outside the county, will be handled by minority companies.

"Wouldn't it be great," Hall said, "if there were $10 million, $20 million or $50 million businesses that would employ more in this region, and more people of color in this region?"

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