Back in September, Pat Nunn Brown sent a message to Arkansas women who own businesses: Call me!
The state was adding women-owned companies to the Arkansas Economic Development Commission’s program promoting minority-owned enterprises, and Brown hoped the phone would be “ringing off the wall.”
Four months later, the phone is indeed ringing, and Brown’s department is answering. The Division of Minority & Women-Owned Business Enterprise has certified 13 women-owned businesses over three months.
Brown sees that as a solid start, but the 13 companies are a small fraction of the total of 268 certified companies; the others are owned by ethnic minorities and service-disabled veterans.
The AEDC program sets goals for state agencies to devote a percentage of spending to minority-owned businesses, and it offers companies “real-world technical assistance with certification, procurement, networking, capital and contracting,” Brown said.
Several other women-owned businesses have applications pending in a verification process that takes 35 to 45 business days. Documents are examined and on-site visits verify that women actually own at least 51 percent of the companies. Certified enterprises must also have less that $10 million a year in revenue.
“We are expecting to certify many more companies, because people are still just finding out about it and others have submitted applications that had to be returned because information was missing,” Brown said.
5% State Spending Goal
Act 1080, passed by the Arkansas Legislature last year, took effect on Sept. 1 and set a goal for the state to spend 5 percent of discretionary procurement budgets with businesses owned by women. Ten of the 13 newly certified women-owned businesses used a streamlined certification process, showing that their ownership had already been confirmed by designated state purchasing entities like the state Department of Transportation.
The law also added companies owned by service-disabled veterans to the program, which has been in effect for decades. The state’s goal for several years has been to direct 10 percent of its discretionary spending toward minority enterprises; now 2 percent is aimed toward businesses owned by service-disabled veterans, leaving the remaining 8 percent target for companies owned by African-Americans, Hispanics, American Indians, Asian-Americans and Pacific Islanders.
The 5 percent goal for women-owned companies is a separate benchmark.
Brown said 40 people had signed up for the latest bimonthly workshop helping businesses with certification.
“We do hand-holding through the process, and it’s for all the targeted groups,” she said. The state promotes the workshops for businesses that have been operating at least two years and are interested in “learning to grow” through minority and women-owned business certification.
The state procurement goals are not quotas, and no penalties exist for falling short. But each state agency, division and educational institution tracks its minority-business spending, which hit a high of 7.46 percent in 2015, a state “spend” of $23.6 million in the last year for which data is available.
The AEDC’s written mission statement includes diversifying the state’s business base, and Brown said creating jobs is a constant goal. “Some certified companies may hire 10 or 15 people” after gaining new business through being listed in the AEDC’s Minority & Women-Owned Business Directory, she said. “But many of the companies on the list have only one or two employees.” Once the division can analyze details on new companies joining the list, “we’ll have a much better idea on jobs gained.”
Getting on the Radar
Getting onto the directory puts companies on the state’s radar for agencies or universities looking for vendors of goods or services, and it exposes minority enterprises to diversity-seeking private companies that routinely consult the list.
“Awareness and visibility are hugely important,” Brown said. “These companies are out there, and one goal is to make sure these companies are listed in our directory.”
To submit their businesses, executives should go to the AEDC's website and follow instructions, Brown said.
“It’s a self-submitting directory, and it’s not hard to use. Corporations often call us looking for minority- and women-owned businesses to supply services or products. We refer them to our list.”
Another benefit Brown offers is the AEDC’s Minority Business Loan Mobilization Guaranty Program, which guarantees loans of $10,000 to $100,000 to certified minority businesses. More than 30 loans worth $26 million were outstanding in September, and the program had never seen a default. The loans have helped create or save at least 170 jobs, Brown said. “In the minority community, creating even two or three jobs makes a huge difference.”