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Supplier Diversity

Business is booming for women-owned firms

WBEs are growing faster and some are making more money than most privately held businesses
- Deborah Lansdowne, eKohs, Inc


Kay Anderson heads up the Evanston Group, a management consulting firm.

Kay Anderson heads up the Evanston Group, a management consulting firm.

Marsha Firestone, founder of the Women Presidents' Organization and more.

Marsha Firestone, founder of the Women Presidents' Organization and more.

The Center for Women's Business Research (Washington, DC, www.cfwbr.org) finds that in the U.S., businesses owned and controlled by women are growing and hiring faster than privately owned business in general. They are also generating revenue at the same or even better rates.

Figures for 2004, the latest available, show that some 6.7 million privately held businesses of which women held the majority accounted for nearly 30 percent of all privately held U.S. firms. They generated $1.19 trillion in sales and employed 9.8 million people.

Unique challenges
Despite these impressive numbers, women-owned businesses face their own challenges. As you might expect, access to venture capital and equity financing is one of them.

"That's much harder for women to obtain," says Marsha Firestone, president and founder of the Women Presidents' Organization (WPO, www.womenpresidentsorg.com) and the Women Presidents' Educational Organization (WPEO). "Only about 5 percent of venture capital dollars go to women-owned business enterprises." Almost all the venture capital firms are headed by men, she says, "who seem to be more attracted to male-owned businesses."

On the other hand, "We've seen a tremendous improvement with the banks. Access to debt is much better now than it was fifteen years ago."

Firestone points out that only 4 percent of today's corporate contracts and 3 percent of federal contracts go to WBEs. Women business owners also need more access to training, but she notes that that's being addressed as part of WPO's mission.

Of course WBEs also face the same issues all businesses are struggling with today: competition, especially from offshore; rising healthcare costs; finding qualified employees. A WPO survey found that members considered these general business concerns to be their most critical issues.

Skewed perceptions

Lisa Shevy

Lisa Shevy is president and CEO of the Women's Business Enterprise Council-West (WBEC-West; www.wbec-west.org). This is a regional affiliate of the Women's Business Enterprise National Council (WBENC, www.wbenc.org), which certifies women-owned businesses.

"Many women business owners find that they're not really perceived as the leaders of a business," Shevy believes. "The majority of corporate board seats are held by men, and the title of CEO was historically left for the men. That's changing, but not as fast as it should.

"Women have come a long way toward leveling the playing field, but they still have a way to go. They have to break the bond of the 'good old boy' network, and they have to do it by really believing in themselves and showing self-confidence."

After all, she notes, research shows that women in general make 88 percent of all purchasing decisions. But other research shows that WBEs are still receiving only 3 or 4 percent of government contracts. "There's a very big discrepancy in the numbers," she says.

Meet the WBEs: Kay Anderson's Evanston Group
"I sold contract programming back in the 80s and large project work with integrators in the 90s," says Kay Anderson. Now she's president of the Evanston Group (Evanston, IL), a management consulting firm. "I started this company in 1999, actually blending the two models."

The idea is to offer customers know-ledgeable execs and program/project managers on a temporary basis, "almost like an executive search firm for interim talent." This approach must be filling an important niche, because Evanston Group now has about $15 million in annual revenues and serves the likes of Allstate, Abbott Labs and United Airlines.

Anderson and her husband founded the company "on an equal basis," which gave her just 50 percent ownership. In 2003 she achieved the necessary 51 percent ownership via a stock transfer and became WBENC-certified.

Loretta Rosenmayer's Trench-It
Loretta Rosenmayer

Loretta Rosenmayer

Trench-It, Inc (Union, IL) does underground electrical work for utilities, municipalities, contractors, developers and builders. President and CEO Loretta Rosenmayer notes that she has 250 to 300 employees, depending on current workload. "I'm a signatory to seventeen unions," she says, "so we always have a workforce to draw on."

The company does $50 million a year now, but it started much smaller. "I was working for a landscaping company that did some trenching work, mostly in connection with irrigation," Rosenmayer says. "I decided to try trenching on my own with just a few people."

Half a year into her new company, Commonwealth Edison, a utility subsidiary of Exelon, planned a pilot project and invited local trenching contractors to bid. In Rosenmayer's small town there were only two contractors doing this type of work and she was one of them. "So I approached ComEd and won a contract, and we've been working with them consistently for eighteen years.

"Of course we now have other customers as well, and we have added more complex work like directional boring, locating, duct packages and site lighting."

Rosenmayer participates in the Women's Business Development Center, the local affiliate of WBENC; and the Federation of Women Contractors. She's also a member of the National Electrical Contractors Association and the Underground Contractors Association. Certification opens doors, she says, "but you must be able to do the work, and you have to come in with a competitive price or you won't be looked at.

"We have developed a fine reputation based on our performance, quality and safety," she adds.

Barbara Woyak of Future Trends
Barbara Woyak

Barbara Woyak

"This will be our tenth year in business," says Barbara Woyak, president and CEO of Future Trends Technology Management (Scottsdale, AZ). The company provides IT consulting and staff augmentation services, like functional or technical resources to help a firm implement SAP.

The company expects to do better than $1 million this year. The number of employees varies with work on hand, from a few to thirty or forty. Clients of Woyak's WBENC-certified firm have included American Express and other financial-services companies, local utilities, Sears, Dial and ConocoPhillips. Most of the company's work is done in Arizona, but Woyak has occasionally helped out in Wisconsin, Texas, California, New Mexico and North Carolina.

In the past, Woyak worked as an IT manager, IT director and independent consultant. "As an IT director I once hired a company to do a big implementation project, and they did a horrible job," she recalls. "I decided I could do a better job of that. I would provide services where I used only experienced consultants."

In twenty-plus years in the industry she's developed a huge database of them. "And if I don't have the person my client is looking for, I have a lot of partner companies to help me locate that person.

"This business, like most businesses, is all about relationships," Woyak says. "The challenge is developing those relationships, and the WBE label helps to overcome some of that. So I often use my WBENC certification to get relationships started."

Beyond certification, Woyak loves WBENC for the good training it makes available and the networking and relationships with other WBEs she finds there. "It's all bundled into one," she says. "You get as much out of an organization as you're willing to put into it. I find that WBENC gives back in abundance."

Allstate supports WBEs
Margaret Klinsport

Margaret Klinsport

Major corporations that actively support supplier diversity and women-owned businesses are helping to change the traditional numbers. At insurance giant Allstate (Northbrook, IL), "We work with a wide range of WBEs," notes Margaret Klinsport, director of supplier diversity.

There are WBEs in the very technical claims end of the business, consulting firms and "a wide variety of others that we work with throughout the company. We are open to all possibilities with WBEs. Any qualified supplier is very much invited to bid for our business."

When Allstate's supplier diversity crew goes to local activities like the Chicago Business Opportunity Fair, they take along some of the company's commodity managers to interact with diverse suppliers, Klinsport says.

Entergy: paperclips to transformers
Madlyn Bagneris

Madlyn Bagneris

Entergy (New Orleans, LA) is an integrated energy company. "We work with about 375 MBEs and WBEs that supply services and goods from paper- clips to transformers," says Madlyn Bagneris, manager of supplier diversity.

Entergy sets yearly goals, including management incentives, for working with WBEs. "We'll work with businesses that supply services and materials in any area that isn't covered by a long-term, multi-year contract."

Because Entergy's HQ and several utility ops are located on the Gulf Coast, some of its local suppliers were wiped out by Hurricane Katrina. "But they're coming back," Bagneris says.

Exelon: from professional services to construction
Emmett Vaughn

Emmett Vaughn

Exelon (Oak Brook Terrace, IL) is another energy company. Supplier diversity manager Emmett Vaughn says the company works with WBEs in everything from professional services to construction.

"We have a strategy of inclusion," he says. "We understand the value of keeping a diverse group of suppliers in the chain. As a public utility, we need to be accountable for economic return to the communities we serve, and that's a driver for us."

Bank of America: working with 5,709
Joseph D. Hill

Joseph D. Hill

Joseph D. Hill, strategic sourcing exec, reports that Bank of America (Charlotte, NC) worked with 5,709 WBEs last year. "More than half our diverse-supplier spend is with WBEs," he says.

They ranged from IT consultants to sign manufacturers. "I would say that every commodity we purchase can be supplied by a women-owned business," says Hill.

Bank of America's official supplier diversity effort began in 1990, and the present goal is to spend 15 percent of its total with diverse suppliers by 2007. "We're at 11 percent now and moving up fairly rapidly," Hill reports. "In 2005 we crossed the $1 billion mark with diverse businesses, and just over $600 million of that was with WBEs."

Hilton Hotels: enhancing economic vitality
Fred Lona

Fred Lona

Like other major corporations, Hilton Hotels (Beverly Hills, CA) sees supporting WBEs as both good citizenship and good business. The company is "committed to cultivating the economic vitality of the communities in which we conduct business," notes Fred Lona, director of supplier diversity. "We believe that encouraging the development of diverse suppliers helps do that."


Michael Gates is a freelance writer and editor in Jersey City, NJ.

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