As we prepare to attend the largest Supplier Diversity conferences of 2016, WBENC (Women Business Enterprise National Council – June 21-24, Orlando), and NMSDC (National Minority Supplier Development Council – October 23-26, Chicago), I find myself wondering how many of the hopeful small, diverse business owner attendees are really ready for, “Yes!”? [more]
To put the following into context and within our world of staffing, the definition of a staffing firm Small Business according to the SBA (Small Business Administration) is determined using a ‘Size Standard’ that considers NAICS codes and annual revenue. Staffing firms classify as a small business when revenue is $21 Million or less on average over three years. Small staffing firms attending the WBENC and NMSDC Annual Conferences are, in effect, David, marketing their services to Goliath, some of the largest corporations in the United States. What are their chances of long-term success, even if they land that large contract?
The corporations who support WBENC and NMSDC all have Supplier Diversity programs, and they want to do business with you, the small diverse-owned staffing firms, but they have exacting criteria, processes, and reporting requirements.
It is often said, “Small business is the backbone of the American economy,” yet statistics show that in 2015 45% of small businesses in the service industry (including staffing firms) failed by year 4. How can you improve your chances of beating this number, while successfully competing for larger corporate contracts utilizing your diverse certification?
Google any version of, “Top Reasons Small Businesses Fail,” and within the top 5 on every single one, you will read some form of, “undercapitalized,” or “lack of profitability,” or “poor cash flow.” All tracking back to the almighty dollar, access to capital, and debt management. What is your attitude toward debt? A little-known startling truth is that woman and diverse-owned small businesses view debt as a weakness, while their male-owned, non-diverse counterparts view debt as a necessary business tool, and grow on average 30% larger and faster than their diverse and woman-owned counterparts.
We believe there are three key components to improving your odds of success and growing your staffing firm long-term:
- Attitude toward debt
- Financial Sustainability
- Personal Connection
Checking your attitude toward debt will help you determine your debt tolerance and ability to manage it for long-term growth. This determination will guide you on the best growth trajectory for you.
We define Financial Sustainability as, “The ability to start, grow, and maintain your business with short- and long-term stability, and a solid balance between risk and reward.” We have also identified three key points of focus for Financial Sustainability:
- Access to Capital
- Planning & Reporting
In a world driven by technology, you cannot deny the importance of a making a personal connection. We are all people, not machines, and everyone appreciates recognition, validation, and success.
Request a free consultation to learn more about our consultative approach to helping our clients grow through our Supplier Diversity and other Business Development Programs.