MBEs urged to chart strategies, seize opportunities

Knowledge is power. Recognizing this, Toyota used the Opportunity Exchange to empower minority entrepreneurs with information on the economic landscape, business marketing strategies and other matters important to them. Called “Today’s Economy: Maximize Opportunities, Minimize Threats,” the discussion and question-and-answer follow-up were moderated by Avis Yates Rivers, president and CEO of Technology Group, Inc., an information technology solutions provider.

Melvin Gravely, Ph.D., founder of the Cincinnati-based Institute for Entrepreneurial Thinking, spoke with MBEs on developing business strategies.

Find time for strategizing

“A strong strategy positions a business to win customer, deliver quality and grow profitability, and then repeat the process enough to create profit, growth and wealth,” Gravely said, but added that “strategy is one of those things that entrepreneurs often do not think they have time to consider.”

To find focus and strategy, Gravely encouraged MBEs to consider several factors, including the competition. “How do you compete? Are you cheaper or better than your competitors,” he asked, adding that delivery and its consistency figure into a good business strategy that should include, relationships with partners and suppliers and the way MBEs want to do business.

Ultimately, MBEs must decide how they want to grow, he said. “Will it be through new products, new customers or new markets?”

Answering these questions will provide the strategy and focus on opportunities that will increase an MBE’s chances for long-term success.

In his presentation, James Lowry, senior advisor for The Boston Consulting Group in its Chicago office, advised MBEs on the effects of economic trends. Lowry leads the firm’s workforce diversity, ethnic marketing and minority business development consulting. During the Opportunity Exchange, he was named to Toyota’s North American Diversity Advisory Board.

“I strongly believe that MBEs are critical factors for revitalizing our communities and economy,” Lowry said. “MBEs hire a disproportionate number of minorities, and by employing and training minorities, MBEs create wealth, models of success and strategic partnerships.”

Power in the marketplace

Lowry continued, “Minorities can be a huge advantage to corporations” because minorities now make up the majority in many areas of the country. “Companies say they want to do more business with minorities. They understand it’s good for America and creates wealth in all communities.” Lowry’s remarks mirror the findings of the most recent economic census, which found that the number of minorityowned businesses is increasing at a much faster rate — a 45 percent increase between 1997 and 2002 — than the overall 10 percent business growth rate. Significantly, total sales revenue for minority-owned firms also increased at a faster pace than total sales of white-owned businesses.

First, MBEs have more direct knowledge of the market demands of communities of color, which allows them to provide these communities with better access to a targeted range of goods and services. MBEs, especially in services and retail, are more likely to serve a customer base of communities of color than are corporate- or whiteowned businesses.

Steven Sturm, group vice president of Americas Strategic Research and Corporate Communications for Toyota, warned that, while the auto industry is more dedicated to serving minorities and contracting with MBEs than ever, the ups and downs of the current economy are affecting decisions throughout the industry.

The credit crunch and ongoing turbulence in the housing market has led to fewer sales of new autos, said Sturm, who is responsible for corporate strategy, planning, research and communications. Toyota’s U.S. sales aren’t as impacted by the housing market downturn, though the “market is softer,” Sturm explained. “It is hurting some domestic automakers more than us.”

Weathering the turbulence

An improvement in the auto market will depend a lot on possible interest rate cuts and consumer confidence, Sturm added. There are other things, however, that threaten to derail the rise of MBEs in the next five years.

“The cost of doing business is rising,” Sturm said. “From pensions and healthcare benefits, to labor and training. These are the biggest threats for MBEs and anyone else trying to keep businesses afloat. This is a good time for MBEs to be at their best and to drive the value-add proposition home,” he pointed out.

“Go out on a limb. Be remarkable,” echoed Monica Warden, account director for Burrell Advertising. She advised MBEs to find out all they can about their competitors and then “differentiate yourself in the marketplace.” She suggested several avenues for doing just that.

“Market yourself. Seek out speaking engagements. Keep yourself connected and help others learn about you,” she urged. “Enter competitions so others can view your work and make it easy for people to come to you for great ideas.”

Warden said that Burrell Advertising, a minority-owned firm, formerly worked on marketing efforts for Corolla and other existing Toyota products. “Now, we’re working on campaigns to launch Yaris, Matrix and other new products.”

She said that is why MBEs should “treat existing customers as if they are new clients. It’s much easier to get new business from existing clients than to bring in new clients.”