Minneapolis gives small businesses a leg up on contracts under $100K

To level the playing field, small businesses will compete against each other for contracts instead of against large companies.

Owner Abdirahman Kahin help prepare orders during a lunch rush on Wednesday, Nov. 16, 2016, the second to last day of being open at Afro Deli's West Bank location in Minneapolis.

Bridget Bennett

Owner Abdirahman Kahin help prepare orders during a lunch rush on Wednesday, Nov. 16, 2016, the second to last day of being open at Afro Deli’s West Bank location in Minneapolis.

Raju Chaduvula

For small businesses, local stores and mom and pop shops, going up against big franchise businesses is never easy.

To promote and maintain small businesses in Minneapolis, the city began the Target Market Program, which allows small businesses to compete against one another for city contracts instead of against larger companies that may have more resources.

The program allows small businesses to get city contracts for jobs worth $100,000 or less, said deputy city coordinator Nuria Rivera-Vandermyde.

If there’s a job that is worth $100,000 or less, the program offers small businesses that have been approved to do the work, instead of going to larger companies, Rivera-Vandermyde said.

Two local businesses, Afro Deli and Preservation Design Works, have been approved for the program along with over 400 businesses from the greater metro area.

Abdirahman Kahin, owner of Afro Deli, said a lot of the money goes to big companies and smaller businesses, like Afro Deli, have a tough time getting business from the city.

“If there’s a big catering job, usually a bigger company gets it,” Kahin said.

Preservation Design Works in the Marcy-Holmes neighborhood was approved by the initiative and is yet to be given work from the city under the program.

Meghan Elliott, president of the company, said the city is the company’s biggest and most important client. The Target Market Program will help get more projects for the company, she said.

Both Kahin and Elliott said the program will help small businesses grow because it focuses resources and projects specifically towards them.

“[Small businesses] don’t have the same resources or market development as bigger companies,” Elliott said.

Kahin said the program is a good place to start for small businesses to become more profitable.

Ward 6 City Councilman Abdi Warsame said by allocating opportunities, specifically for small businesses, the city can foster and maintain small businesses for the long run.

“’The city doesn’t do enough for small businesses…if we want to reduce [the] gap in equity, we need to reduce [the] gap in income,” he said.

Owners of established businesses understand how the system works, he said. The Target Market Program helps smaller businesses break into bigger projects and grow as a result.

Small businesses must be within the 13-county metro area, be independently owned for-profit businesses and make less than a certain amount in profit during each fiscal year to be eligible for the program.

For example, if there’s a printing job for a contract worth less than $100,000, the Target Market Program will provide a few local companies that can do the work and the client can decide who to choose.

Warsame said the program could also help minority and women-owned businesses, many of which are small businesses.

Rivera-Vandermyde said the program will be looked at again in the future to gauge how much was accomplished. The city will review how many businesses registered with city, how many more were created, how much profit was accounted for and so on, she said.

“By doing better with small businesses, [the city does] better as a whole,” she said.