Kwabinah Appiah, vice chairman and COO of accounting firm Mitchell & Titus, says the best way to convince the world that a minority owned company is capable is to focus on executing the fundamentals.

A recent survey conducted by the U.S. Small Business Administration found that 18 percent of the 23 million businesses in America are owned by minorities. That’s more than 4 million companies that are at least 51 percent owned by minorities, and also 4 million companies that have had to build successful relationships to survive.

Successful minority owners say that such connections are vital for anyone trying to start their own business, and without them, they wouldn’t have made it. Starting a business isn’t easy for anyone, but minority business owners say they are at somewhat of a disadvantage compared to other start-ups.

In addition to the normal challenges faced by start-ups, successful minority owners say they’ve had to contend with additional hurdles, most notably preconceived notions about what their firms were and weren’t capable of. On top of that, they say, minority owners have to overcome one of the least hospitable lending environments in recent memory.

However, this isn’t to say that minority business owners are doomed. The good news for prospective and fledgling minority owners is that there exists a network of support systems designed to help them make the connections they might not otherwise be able to. Additionally, potential business partners are more keenly aware than ever of minority owned firms, and many make it a priority to find them and give them the same opportunities they give established businesses.

Getting Started
Phil Wilkins is a consultant who specializes in advising businesses on diversity, an author and owner of several successful businesses. He started out by trying to buy one McDonald’s franchise with $10,000 of his own money and soon discovered it would take a lot more than just enthusiasm and some capital to get off the ground.

“I really believed that I was a good fit to become an owner, and when I read through the application I discovered I needed $100,000 of unencumbered funds,” he recalls.

He says minority business owners can expect to hear a lot of “no”s when they get started, but that shouldn’t discourage them.

“When I received the rejection letter, I didn’t just stop at that,” he says. Even though it wasn’t required of him, Wilkins says he updated the license manager every month for three years to let him know how close he was to the $100,000 goal. While still working full-time selling medical supplies, he reached his goal and began training to be a franchisee.

Wilkins says the key to his early success was three-fold. “One, don’t just give up at ‘no;’ two, always keep that line of communication open; and three, persevere,” he says.

If anything, Wilkins says, his example should demonstrate to other minority owners that their enterprises need enough resources in place before getting started.

“We have to make sure as minority business owners that we are well-capitalized when we go into a venture,” he says. “We really have to make sure that our engine is well-oiled to survive.”
Otherwise, it can be hard to overcome the notion that the owners are not prepared or capable.

Wilkins says minority owners should also make sure their credit histories are very clean.

The biggest hurdle minority owners face is often convincing other firms that they have what it takes to succeed, Wilkins says. He explains that many times minority owners get the short shrift when it’s assumed that their operations are somehow not as large or as capable as another company.

Also, minority businesses are more likely to be new to the industry, meaning they don’t have a lot of connections yet. It’s another form of the old paradox where you won’t be hired if you don’t have any experience, but you don’t have any experience unless you get hired. Wilkins says this is perfectly understandable from the viewpoint of other firms they might do business with.

“People want to do business with people they know and trust,” he says. “We have to overcome those barriers and prove that we are really worthy of their trust.”

Extra Effort
Kwabinah Appiah says he understands this dilemma all too well. As vice chairman and COO of accounting firm Mitchell & Titus, the largest minority-controlled accounting firm in the United States, he says the best way to convince the world that a minority owned company is capable is to focus on executing the fundamentals. Minority owned companies have to overcome the perception that they are less experienced, he says.

“Performance is always key,” he says. “Quality and responsiveness to your clients’ needs is a key to success.”

Both Appiah and Wilkins say minority business owners should also avail themselves of opportunities to develop strong relationships within the business community. Wilkins says they should seek out minority supplier development councils, which exist in every state and in most major cities. These councils work to match minority firms with clients looking to strengthen their supplier diversity. Local chambers of commerce and specifically African-American chambers also serve this role, Wilkins says. However, he cautions, a company will normally only get out of it what it puts in itself.

“The main thing is really incorporating those groups into your business strategy,” he says. “I think a lot of people have the misconception that as soon as they join these organizations, the work is going to flow,” he adds.

Appiah says Mitchell & Titus was one such firm that benefited from being connected with clients this way, but stresses that it wasn’t a foregone conclusion that the company would be able to hang on to the work. “We asked to be looked at and challenged like any other firm,” he says. “We got those chances, but it wasn’t easy.

“They had a benchmark and we were saying we could do the same thing, so that challenge was to rise to that level and we did,” Appiah adds.

Soon, Mitchell & Titus became one of the top five firms in the country for employee benefit audits, and Appiah says it has many Fortune 1000 clients. Appiah says the firm was able to overcome the misconceptions other firms might have had about it through determination and execution, as well as establishing strong relationships.

“A big part of all of this is relationships in the business community,” Appiah says. “It takes on a different meaning because we are getting into this arena on the threshold, and need that extra effort to get in there.”