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Battling Perceptions About Minority- and Woman-Owned Businesses

New York Times By ADRIANA GARDELLA

  At the most recent meeting of the She Owns It business group, Jessica Johnson expressed frustration with the way her company is sometimes perceived. The issue involves small businesses that are certified as being minority-owned, woman-owned or disadvantaged (a business certified as disadvantaged must be majority owned by socially and economically disadvantaged individuals as defined here.). As it happens, Ms. Johnson’s company, Johnson Security Bureau, is all three. This means, among other things, that on state contracts, prime contractors can consider using Johnson Security to satisfy subcontracting goals that call for the use of such firms.

Generally, this is good news for Johnson Security, which is a subcontractor on several projects for much larger security and construction companies. Part of Johnson Security’s successful growth strategy has involved taking on these jobs in addition to its prime contracts. But they come with challenges that include battling the impression that certification programs give these companies a “handout,” Ms. Johnson said.

“It’s an expensive process to become certified,” she told the group. “It’s not like you say, ‘Hey, I’m a woman, let me flash you,’ and then you get the certificate.” The certification process is rigorous, requiring site visits and the submission of paperwork including tax returns and business licenses.

“And you have to be in business a certain amount of time,” added Deirdre Lord, a group member who owns The Megawatt Hour. That’s not an issue for Johnson Security, which has been around for 50 years.

“You have to be a real business — they scrutinize everything,” Ms. Johnson said.

Once a certified business is hired, it is held to the same standards as the prime contractor, Ms. Johnson added during a later conversation.

Despite subcontracting requirements, Ms. Johnson said many big companies dodge their obligations by claiming they made a good faith effort to retain a certified small business, but couldn’t find a qualified one. She said she recently met the owner of a certified woman-owned business that was capable but desperate for work. In fact, she couldn’t even get prime contractors to return her calls. “I could relate to her, because a few years ago that could have easily been me,” Ms. Johnson said.

“So how did you change that up?” asked Beth Shaw, a business group member who owns YogaFit.

“I didn’t take no for an answer,” Ms. Johnson said. She said she kept calling every organization with which her company had certification to ask about coming jobs. She attended meetings and outreach events, site visits and prebid conferences. She got to know the prime contractors. And she eventually convinced many of them that her company could do the job, she said.

So what’s the problem? Ms. Johnson was reluctant to discuss specifics for fear of alienating the contractors that hire her. “We’ve recently run into some issues,” she said vaguely, adding that she hoped to be able to discuss the details in a future business group session.

But in a conversation after the meeting, Ms. Johnson explained that she typically faces two major challenges when working with prime contractors as a certified business. The first arises from cultural differences between Johnson Security and the larger companies. As a small-business owner, Ms. Johnson said, she is responsible for everything — big-picture issues as well as the small stuff. Unlike the owner of a larger company, she said, “I don’t have the luxury of not being hands-on.”

This means she often finds herself dealing with employees at many levels of the larger organizations. While a prime contractor’s top person may not be aware of the details Ms. Johnson needs to discuss, a lower-level manager may lack answers to broader questions, such as, “What does the contract require?” Sometimes, the lower-level employees who see Ms. Johnson come to think of her as “Jessica,” their peer, instead of as “Ms. Johnson,” the owner of a business.

The second challenge is battling misperceptions about the capabilities of certified businesses, she said. Ms. Johnson said she recently attended a meeting and was dismayed to hear members of the prime contractor’s staff say, “Wow, you guys are so professional.” Why, she wondered, would they expect anything else?

She believes these perceptions are at least partly a result of big companies’ misrepresenting the abilities of certified businesses during the bidding process in the hopes of winning the entire contract.

“If I get my millions, I’m going to find a way to pay it forward to other small businesses,” she said.