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MMBC develops method to match minority businesses with corporate client contracts

MMBC develops method to match minority businesses with corporate client contracts

from Memphis Business

 Journal - by Michael Sheffield Date: Friday, March 25, 2011, 5:00am CDT

A new method of matching qualified minority businesses with potential corporate clients has yielded initial success through a partnership with Smith & Nephew Orthopedics.

The Mid-South Minority Business Council worked with Smith & Nephew to connect minority businesses with Grinder Taber & Grinder Inc., the general contractor on the company’s new headquarters in Goodlett Farms. The project was worth an estimated $26.5 million and 40 percent of the contracting work was handled by minority businesses. In addition, Smith & Nephew awarded more than $5 million in supplier contracts to local minority businesses.

MMBC’s new method centers around a “match making” process that works with qualified minority businesses to determine if they fit the needs of a company seeking bids for contracts. President and CEO Luke Yancy says MMBC works with corporations to determine what they historically spend on different suppliers to find matching and qualified minority businesses to bid. Suppliers can range from temp agencies to printing, tooling or custodial services.

MMBC is working with businesses that include Baptist Memorial Health Care Corp., Comcast, the City of Germantown and Mitsubishi Electric Power Products, which is building a new $200 million manufacturing facility. The Mitsubishi project has a target of 21 percent minority participation for subcontractors. Electrolux Major Appliances North America, which is slated to build a $195 million manufacturing plant, has not yet selected a general contractor.

Brett Grinder, vice president of Grinder Taber & Grinder, says his company first worked with MMBC on a project it did for First Tennessee Bank.

“They’ve helped us expand our pool of suppliers as we go from project to project,” Grinder says. “The shotgun approach usually doesn’t yield good results because people don’t feel involved in the process.”

Taking a fine-tuned approach, Yancy says, eases the process for corporations.

“The old model of pushing 500 plus companies onto a corporation without any interfacing or strategizing is burdensome, and that’s why it hasn’t worked,” Yancy says.

A 2010 city-commissioned minority business disparity study showed more than 65 percent of Memphis’ population is black, but only 9.6 percent of minority- and women-owned business participated in $190.5 million worth of construction contracts the last three years.

According to U.S. Census Bureau statistics, between 2002 and 2007, the number of minority-owned firms in Shelby County increased from 13,822 to 23,586, but the average annual revenue of those companies decreased from $59,055 to $50,850 per year. The growth in number of businesses would be encouraging without considering employment numbers. Yancy says 97 percent of black-owned businesses in Shelby County are sole proprietorships with no employees outside of the owner.

“People are splitting up this already small piece of the pie,” Yancy says.

Joe DeVivo, president of Smith & Nephew’s Orthopedics division, says the company made a conscious effort to support local minority businesses during construction and with suppliers.

“It’s very easy for a large company to contract with a large supplier that isn’t part of the community,” DeVivo says. “You’re forcing your team to work and look harder, but the win-win is asking them to look at Memphis first. You tend to find greater value if you do.”