If you’re a small business owner, it’s natural to hope that the company you founded will one day become a globally-known corporation. However, it’s important to recognize that there are a number of key benefits that small companies offer their employees and customers that their larger counterparts can’t.
Culture
There’s something special about a company that is run entirely by people who have been there since the start. The employees are bound by a common story about the company’s founding and likely share a certain philosophy about the job that leads to a distinct work culture. That culture not only sets the company apart as a workplace, but it may very well be part of the brand that customers buy into.
The larger a company becomes, the harder it is to maintain the distinct culture that characterizes many small businesses. For instance, a roofing company might begin with a few experienced roofers operating out of a subleased space. As it grows, however, it will move into its own conventional office space, add white collar staff (human resources, bookkeepers etc) and put in place more concrete rules and policies that weren’t necessary when it was just a few friends working together.
Flexibility:
As a company grows, it necessarily becomes increasingly compartmentalized and bureaucratic. Even the most efficiently-run major companies comprise large bureaucracies in charge of different aspects of the business. As a result, big companies are not nearly as agile as small businesses or as able to quickly change. If you, as the business founder and owner, want to make a company-wide change, your decision has to be filtered through multiple layers of leadership across different departments.
Small businesses, in contrast, can make big changes much more quickly. If you’ve only got 10 employees, it doesn’t take much to convene a meeting of the entire workforce – even if it’s a mobile workforce. Similarly, smaller companies can more quickly identify and react to problems. The lack of complex chain-of-command allows employees to have direct access to the owner, who can quickly address whatever problem a worker encounters, whether it’s a product malfunction, a demoralized workforce or accounting errors.
Specialization
Big businesses are focused on high-volume opportunities that can generate significant revenue. As a result, many opportunities remain for specialized offerings targeting a niche market that isn’t being served by the largest companies. The benefit for small businesses is not just that they have a chance to fill that void, but that they can develop a reputation as specialists who provide that service better than anybody else.
Customer Relationships:
From a customer’s perspective, the best thing about buying from a small business is that you are rarely dealing with somebody who is merely a salesperson or a customer service representative on a script. Instead, you’re buying directly from the business owner, who likely has a deep knowledge of and passion for the products they’re selling you. With nobody to answer to but themselves, small business owners will tend to have more flexibility in how they interact with you, including offering special deals or discounts.
As a business grows, at some point there are simply too many customers for the founders to serve on their own. Those duties have to be delegated to other employees, who are less likely to have the experience with and knowledge of the products/services and the needs of customers.
Black Small Business Opportunities:
There are seven minority groupings in the United States: Hispanic or Latino Americans, Black or African Americans, Asian Americans, Arab and other Middle Eastern Americans, Native Americans and Alaska Natives, and Native Hawaiians and other Pacific Islanders.
Federal agencies and many corporations think it’s good practice to do business with minority-owned companies, which is why they often set aside a certain percentage of their budgets to work with certified minority business enterprises (MBEs).
Benefits of Being a Certified Black Small Business:
Numerous benefits come with being certified as a minority-owned business, from access to special business training to a preference for contracts with government entities.
1. Access to Government Grants and Contracts
Chief among the minority-owned business benefits is the preferred access to government grants and contracts. With the SBA 8(a) designation, your business can compete for what federal agencies call set-aside and sole-source contracts.
Under competitive set-aside contracts, when two or more small businesses can perform the work or provide the products being purchased, the government will “set aside” the contract for small businesses alone. Almost all government contracts under $150,000 automatically go this route.
While some set-aside contracts are open to any small business, others are available only to small businesses taking part in SBA contracting-assistance programs. Most contracts require competitive bids, but some are sole-source contracts that can be awarded without a bidding process. This usually happens only when a particular business can fulfill the contract requirements.
The Minority Development Business Agency (MDBA) also offers grants and loans for MBEs. Its Grants.gov is a central hub with information on more than 1,000 grant programs, providing access to approximately $500 billion in annual awards. The five-step grant application process involves: Registering your business to apply for an MDBA grant: This involves obtaining a unique DUNS identifier number and registering with SAM.gov, for which you need an employee identification number (EIN). Understanding the grant announcement: Visit the specific grant page on the MDBA site to find out what you need to know about it and download the grant package from Grants.gov. Attending a pre-application teleconference: This provides more information about the grant and its requirements. Understanding the evaluation process: Thoroughly review the key sections of the grant announcement, including eligibility requirements, deadline requirements, and the selection process. All requirements must be included in your grant application. Preparing and submitting an application: The fully completed application must be submitted through Grants.gov by or before the deadline.
2. Increased Business Partnership Opportunities
Many large corporations make it a policy to do a certain amount of work with disadvantaged business enterprises (DBE). For example, AT&T and its suppliers have spent over $173 billion with minority, women, service-disabled veterans, and LGBTQ+ businesses in the past 50 years through the Supplier Diversity Program. By the end of 2020, AT&T is committed to spending $3 billion with black suppliers. UPS is another great example of a large corporation investing in smaller businesses. The company started its supplier diversity program in 1992, and the shipping company now spends $2.6 billion annually doing business with about 6,000 small and diverse suppliers.
3. Training Workshops, Management, and Technical Guidance
Certification also provides minority-owned businesses access to training workshops and mentorship possibilities that can accelerate their learning and development.
For example, the 8(a) Mentor-Protege program aims to get mentor businesses to provide development assistance to minority-business proteges. The help can include guidance so that they are better able to compete for government contracts.
- Other forms of assistance include:
- Technical and/or management assistance
- Financing guidance (equity investments or loans)
- Trade education
For its part, the NMSDC offers certified MBEs various programs and services that help with professional development. These can include:
- Regional training seminars
- Business opportunity fairs with access to hundreds of prospective buyers
- Advanced management education programs
- Access to specialized financing and working capital loans
- Networking opportunities organized by purchasing categories
4. Networking Opportunities
There is strength in numbers and a lot that disadvantaged business enterprises can learn from one another. A great feature of bodies such as the SBA and NMSDC is that they provide various networking opportunities for certified businesses to share best practices and support, making them stronger in the face of shared challenges. For example, the SBA offers its Emerging Leaders Initiative. Operating in various locations across the country, the program is “intended to accelerate the growth of high-potential small businesses in America’s underserved cities.” It provides access to peers for networking and marketing opportunities, mentors for guided growth, specialized workshops, and access to peers, civic leaders, and the financial community. The initiative is open to small businesses and entrepreneurs with annual revenues of at least $250,000, have been in operation for at least three years, and have at least one employee (other than themselves).
The NMSDC offers various business fairs and networking events and the chance to apply for exclusive scholarships and grants. For example, the 2020 NMSDC Conference was billed as a “business opportunity exchange.” Because of the COVID-19 pandemic, it had to pivot from being a live event to a virtual one. Even so, it allowed attendees and exhibitors to connect using interactive features, such as live chat and one-on-one meetings. Workshops also provided “thought leaders, chief procurement officers, and seasoned minority business executives” the chance to interact, inspire, and share ideas and best practices.
