When Eric Hardy, Patrick Tomina, and I began the journey of breathing life into what would become w3r Consulting, we were exuberant and full of ideas, but we lacked the practical no-know and experience about the resources, relationships, and will power needed to grow a successful company. That’s not uncommon. As a young entrepreneur, you don’t know what you don’t know.
What we were really needed in those early days was the mentorship and guidance of folks who looked like us and understood our position and unique barriers. As a black-owned, Chaldean-owned business, we were naïve to some of the challenges we would encounter while building our book of business and a reputation for excellence. Now, we strive to use our lessons to enhance the success of other ambitious black and Chaldean entrepreneurs.
If you’re committed to cultivating the growth of up-and-coming minority business enterprises (MBEs), here is the first part of a two-part series on the lessons we’ve learned along the way that all MBEs should know.
Help Them Create a Realistic Business Plan for Financing
Coming up with business ideas has always been the intuitive part for us. While at the University of Michigan–Dearborn, Eric and Pat explored their passions until they found an idea that clicked: WebRunners Inc., the legal entity of w3r Consulting (dba). Eventually, I had the privilege of aligning values, passion, and vision and then joining their team.
As STEM professionals, we knew the logistics and technical aspects of providing IT solutions to clients. What we lacked in those early days was the real-world business acumen that you can only gain with time.
First step was to create a business plan that was simple yet profitable in the eyes of a banker. We had to show w3r consulting was a viable business which could scale and be flexible enough to grow depending on market changes. Once completed, we presented the final product to several banks in our bid to acquire a loan. Of all the banks where we presented our business plan, only one decided to take a chance on our vision. They also happen to be the financial institution which we still do business with today: Comerica Bank. They made a commitment to us early on, and we’ve remained loyal to them ever since.
One thing we always try to impart to young or inexperienced MBEs is that the entire process (or journey) is humbling. We faced rejection after rejection in our loan pursuits, a common barrier for minority business owners then, and one that’s still in existence today. In fact, the Small Business Credit Survey found that only 13% of black entrepreneurs surveyed received the full share of financing they sought compared to 40% of white entrepreneurs.
When mentoring newer MBEs, it’s important to provide twofold guidance through the business planning process: helping them to ask the right questions and guiding them to receptive organizations.
Start by encouraging them to reflect on core questions that investors will have on their minds:
- The projected financial performance of the company
- Market research and industry expertise
- The market competition
- Ownership monetary contribution (skin in the game)
- Potential customers and margins per services/products
Answering these and a wide range of other questions enable your mentee to craft an airtight presentation that loan officers will have a harder time rejecting. Additionally, we recommend reaching out to lending organizations that you have a strong relationship with, have a history of investing in minority-owned businesses, or are minority owned themselves. There is no reason to fight an unnecessary uphill battle this early in the business (if it’s avoidable).
Show Them How to Manage Expectations for Clients and Their People
Until an entrepreneur has managed client, vendor, or employee relationships, they can only guess at the obstacles that they will encounter along the way. At the beginning, we learned to broach difficult conversations, with direct conversations, and reach necessary consensuses and understanding. Nothing beats a face-to-face conversation to hash out any issue and come to an agreement. This will help individuals respect and gain your trust more quickly. Thanks to the way we have handled conversations, we have maintained some level of positive relationships post separation with every partner, employee or customer we’ve had.
How do we encourage the next generation of black and Chaldean business owners to set the right foundation? We always encourage them to seek out and surround themselves with highly skilled, hardworking people, folks who are not only talented but have different skills, experience and thought processes.
Want to learn more about the lessons we learned as black and Chaldean entrepreneurs? Keep an eye out next week for our continuing story, covering the importance of helping them pursue the right partnerships and encouraging a pay-it-forward mentality.