Carlson School program provides services for certain small businesses

Companies owned by women, minorities, or people with disabilities are eligible.

Nathan Halverson

Connie Frederick, owner of Gifted Baskets, had no idea her company’s Web site was costing her money.

But then she met Lakeesha Ransom and Joanne Tobey, master of business administration students in the Carlson School of Management.

Ransom and Tobey were taking part in an experiential Carlson School program designed to provide consultation for small businesses owned by women, minorities or people with disabilities, known as WMD businesses.

Ransom and Tobey analyzed Gifted Baskets and recommended improvements as part of the Management Assistance Program.

“They showed me I needed to be more up-to-date with my Web site,” Frederick said. “If we could even cut phone time down by 20 percent, that could save us enormously.”

Carlson School’s Management Assistance Program is part of a larger effort by the University’s Office for Business and Community Economic Development to help underrepresented business owners.

Last fiscal year, the University spent $52 million on WMD business services, which represents 7 percent of the University’s total expenditures on contracted or outsourced services.

Asians accounted for the largest proportion of WMD spending, receiving 55 percent of expenditures. Women were the second-largest receiver, with 27 percent.

When soliciting services, the University always chooses the lowest bid it receives, assuming it believes the contractor can deliver on that price.

In 1998, the University abandoned its practice of setting quotas on how much money or services it spent on businesses owned by minorities, women or people with disabilities. Since the quotas were abandoned, expenditures on the WMD businesses have doubled.

Dan Nelson, Campus Republicans chairman and an affirmative action opponent, said he had no problem with the program as he understood it.

“As long as they get the lowest price on it, I’m OK with it,” he said.

D. Craig Taylor, director of the Office for Business and Community Economic Development, said his office is not a social welfare program.

“It’s not a handout,” he said. “It makes good business sense.”

Taylor said the 15,000 minority businesses alone account for $3.1 billion of Minnesota’s gross state product.

Small businesses employ a significant percentage of Minnesotans. And Taylor said if WMD businesses are cut out of the loop, it would harm the economy.

Taylor said minority businesses employ people in their communities, allowing them to afford higher education and increase their long-term income potential.

“Businesses will close their doors if not supported, then people will take from the system in another way,” Taylor said. “In the final analysis, this just makes good business sense.”

The Office for Business and Community Economic Development has compiled a list of businesses certified as being WMD-owned. The companies are certified by the small business association, the city of Minneapolis, the city of St. Paul or the state, which has a program similar to the University’s. The aim is to create the infrastructure to utilize minority businesses.

The University consults the list any time it solicits a bid for a project or outsources a service. Purchasing Services contacts WMD businesses that offer the desired service to let the owners know they are taking bids.

Purchasing Services only does this for WMD businesses.

Taylor said the service is intended to provide more information to businesses that historically have been excluded.

“They just want to be considered at the table with everyone else,” Taylor said.

The biggest challenge to these businesses is having access to the same information at the same time when the opportunity unveils itself, he said.

Another function of the Office of Business and Community Economic Development is to encourage all contractors to use WMD businesses and hire women, minorities and people with disabilities. Taylor said the University wants from 8 percent to 10 percent of a contractor’s subcontractors to be WMD businesses.

“It’s the pure economics of it,” Taylor said. “It’s important to us as a land-grant institution.”

Nathan Halverson welcomes comments at [email protected]