Changemakers LA Podcast: Preparing Small Business for Eligibility and Accessibility in Supplier Diversity Programs
This Changemakers LA podcast episode is hosted by Deborah Membreno, LISC LA Program Officer. It covers Preparing Small Business for Eligibility and Accessibility in Supplier Diversity Programs. Each guest provides unique insights on how they are helping impacted businesses increase their overall sustainability and eligibility for contracting.
Joining LISC LA for this conversation are:
- Dr. David Choi, Award-winning professor of Entrepreneurship, Loyola Marymount University (LMU)
- Claudia Morales, Small Business Owner and Business Consultant
- Rene Cota, President of CMG Alliance
This episode began by discussing how many workers are motivated to leave the traditional 9-5 to pursue their passions, exit corporate America, or take on new opportunities like starting a business. Each guest serves the diverse capacity gap needs of new and disadvantaged businesses. In addition, our guests’ business development efforts increase access to supplier diversity initiatives, which facilitate measurable and equitable outcomes towards upward mobility.
David Choi, Ph.D discussed the LMU academic partnership with LISC LA that works with entrepreneurs who have not enrolled as students of any university and are not required to hold a high school diploma or other standard academic credentials to participate in the Ascend LA program. Dr. Choi describes why educational/corporate partnerships like Ascend are critical to achieving equity in the entrepreneurial space.
Claudia Morales discussed how their lived experience as an entrepreneur informs how they approach the business development needs of their clients. Claudia describes the unique challenges that impacted businesses face with systems navigation which interferes with substantial upward mobility. Claudia also provides insight on what's working to mitigate these challenges.
Rene Cota discussed the opportunity to build BIPOC-led owned businesses with people who are certified and considered “contract ready.” He describes these impacted businesses as only capturing a small percentage of the market. Rene talks about the one-on-one business counseling that prepares them for procurement offices and the challenges he faces doing so.
About our panel:
Claudia Morales is an experienced Nonprofit Leader and Social Entrepreneur with a demonstrated history of working across industries and sectors. She is skilled in Project and Nonprofit Management, Operations, Facilitation and Training, Program Development, Strategy, and Business Development. In addition, Claudia has worked with start-up organizations and companies.
David Choi, Ph.D, is an award-winning professor of Entrepreneurship. He is the chair of the nationally-ranked Fred Kiesner Center for Entrepreneurship, founding director of the Master Program in Entrepreneurship and Sustainable Innovation, and founding director of the Family Business Entrepreneurship Program in the College of Business Administration at Loyola Marymount University. In addition, David leads LISC LA’s ASCEND LA’s management education program. David’s team works with Ascend LA businesses to develop updated business plans and sound strategies for growth that incorporate the tools and skills they learned during the program.
Rene Cota is the president of CMG Alliance. CMG Alliance is a management consulting firm specializing in government contracting. Mr. Cota has advised numerous clients to successfully bid and win contracts with federal, state, local government, utilities, and major corporations. Rene is a certified management specialist with over 15 years of experience as a contract negotiator. In addition, Rene’s expertise includes testifying as an expert in federal and state courts in policy and statute compliance.
Want to dive into the full transcript? Check it out below!
Deborah Membreno 0:13
Hello and welcome to the latest episode of the Changemakers LA podcast, presented by LISC LA. The Changemakers LA podcast is a tribute to the people and the policies that make LA neighborhoods good places to live, work, and play.
Deborah Membreno 0:25
My name is Deborah Membreno, I am a program officer at the Local Initiative Support Corporation LA (LISC LA). On today's episode, we will talk to our guests about how they are helping small businesses build long-term sustainability, increase eligibility for contracts, and increase access to capital.
Deborah Membreno 0:43
Joining us today we have Claudia Morales. Hi Claudia, thank you for joining us.
Deborah Membreno 0:49
Claudia is an experienced nonprofit leader and social entrepreneur, with a demonstrated history of working across industries and sectors. She is skilled in project and nonprofit management, operations, facilitation, training, program development, strategy, and business development. Claudia has worked with startup companies and organizations.
Deborah Membreno 01:12
We also have on the line, Dr. David Choi, an award-winning professor of entrepreneurship. He is the chair of the nationally ranked Fred Kiesner Center for Entrepreneurship, founding director of the master's program in Entrepreneurship and Sustainable Innovation, and founding director of the Family Business Entrepreneurship Program in the College of Business Administration all at LMU.
Deborah Membreno 01:40
In addition, David and LMU are LISC LA’s management education partners for the Ascend LA program. David's team works with Ascend LA businesses to develop updated business plans and sound strategies for growth. Thank you, David, for your partnership and for being here today.
David Choi 01:57
Thanks for having me.
Deborah Membreno 02:00
We also have Rene Cota, President of CMG Alliance. CMG Alliance is a management consulting firm specializing in government contracting.
Deborah Membreno 02:10
Rene has advised numerous clients in successfully bidding and winning contracts with federal, state, and local government, utilities, and major corporations.
Deborah Membreno 02:19
He is a certified management education specialist, with over 15 years of experience as a contract negotiator. His expertise includes testifying as an expert in Federal and State courts in the area of policy and compliance.
Deborah Membreno 02:37
Thank you all for being here, we really appreciate your time and your insights for us today.
Deborah Membreno 02:44
Today's conversation is centered on business development. We will discuss the assistance that small businesses need. Which is in high demand, as we all know. The work that you all do to address the many challenges that diverse businesses face.
Deborah Membreno 03:00
We know that impacted businesses need culturally competent wraparound services that address issues with operations, management, marketing, sales, finances, customers, competition, and value proposition, so it’s a lot for them to cover. And that access to human, social, and financial capital is limited for diverse entrepreneurs.
Deborah Membreno 03:25
And when we talk about diverse entrepreneurs, we are talking about businesses owned by people of color. Some of them may be starting their businesses brand new. And maybe transitioning from a nine to five to pursue their passions.
Deborah Membreno 03:40
We are also talking about legacy businesses, who are cultural staples of our communities. All who are looking for new opportunities and looking to capture new business.
Deborah Membreno 03:52
So let's talk about the efforts that you've worked on to secure small and large procurement opportunities. How you've helped them build partnerships, and how we are working on achieving sustainability.
Deborah Membreno 04:05
Dr. Choi, we will start with you. In a previous episode, we discussed the school-to-career pipeline and leveraging partnerships to ensure students’ access to high-road careers. Your academic partnership with LISC LA is a bit different. It works with entrepreneurs who are not enrolled as students and are not required to hold a high school diploma or other standards of academic credentials to be part of the Ascend LA program. How do you think academic, corporate, and community partnerships like Ascend LA are critical to achieving equity for entrepreneurs?
David Choi 04:45
Thank you for the question.
David Choi 04:47
I'm bragging here a little bit, but at LMU, we have had a vibrant entrepreneurial program for our traditional students. For undergrads, we have 300 students majoring in entrepreneurship. We have two master's programs as you mentioned, Family Business Program MBA and so on.
David Choi 05:07
We are very proud of our program, but without that, as a Jesuit institution that seeks to be involved in all aspects of society. We felt that we needed to do more to serve our communities than just educate the traditional students.
David Choi 05:26
One thing we wanted to do over the last several decades. We really did a great job of developing the curriculum that really helps entrepreneurs; we've kind of figured this out over the last few decades. The fact is that this great material is not accessible to many of these non-traditional students who could really use the material.
David Choi 05:48
We were looking forward to an opportunity to share the material and we are actually very excited about the opportunity to work at LISC LA and organizations like CMG Alliance and offer this education material to these non-traditional students. And I think that as long as these participants really take time to learn and work with organizations like LISC LA and CMG Alliance they can really grow their businesses and thereby enhance the overall equity in our society.
Deborah Membreno 06:38
Thank you for you know always sharing those resources. We think it's super important that even if people don't have access to a university or a high school degree that they are able to pursue their dreams.
Deborah Membreno 06:53
And part of that is also having the right tools to be able to be successful when it comes to business development. And so, Claudia, as an entrepreneur, what is your approach to business development, given the diversity of clients that you work with?
Deborah Membreno 07:11
What resources and best practices do you provide them with? For example, do you lean on things like management education from a school like LMU? And what other resources do you use for them?
Claudia C Morales 07:25
Absolutely, thank you for that question.
Claudia C Morales 07:27
I feel that I really have to speak to the challenges that I have experienced as an entrepreneur. Operating in a business ecosystem as an immigrant woman of color coming from an underserved community.
Claudia C Morales 07:39
I was very fortunate to be able to pursue a degree and training in social entrepreneurship. But, I was definitely not prepared for dealing with the reality of actually running a business.
Claudia C Morales 07:50
A lot of the work that I do now really focuses on supporting emerging entrepreneurs, who are wanting to start ventures in untested markets, and the risk that comes with that is enormous. I realized that I can't take for granted the knowledge that I gained from going through a training program.
Claudia C Morales 08:09
But really a lot of the entrepreneurs that I work with have no business background. They don't know somebody that runs a business that can give them tips and they don't have access to finance. They do depend a lot on their social capital, working with communities, and creating that system of support.
Claudia C Morales 08:29
I really have to both acknowledge the access that I have as a person that holds a higher degree that does know other people in business. And then I tried to extend that to the entrepreneurs, that I support. I help them develop both the technical understanding that is needed to run a business, but also the very personal and emotional aspects of running a business.
Claudia C Morales 08:55
How do you help emerging entrepreneurs be resilient? How do you help them be okay with plans not going the way that they would ideally want them to go? How do they navigate systems that expect you to come in knowing exactly what you want and need at every point and step of the way?
Claudia C Morales 09:13
It really is a lot of high touch with the entrepreneurs that I work with; interpreting and translating systems is core to what I do.
Claudia C Morales 09:23
What does it mean when you go to the permitting office and all the documents that they are requiring you to do and why they need you to do that when they're going to ask for loans for startup capital.
Claudia C Morales 09:34
We definitely love to work with other partners that understand what it means to be a micro business entrepreneur. How they can then work with them to adjust some of their criteria. How can they measure the success of a new business based on alternate factors.
Claudia C Morales 09:53
For us, it's really important to meet entrepreneurs where they are at, and to not assume they know the things I know and really help them build up social capital.
Deborah Membreno 10:06
Absolutely and Rene I know that work that you support is really one on one support for entrepreneurs. Making sure that they have those tools, but that they know how to strategically use them as well.
Deborah Membreno 10:21
We know that the city of LA, for example, has slated billions of dollars for development and procurement services. But, though entrepreneurs may be excited for these new opportunities and ready to go after them both locally and federally. BIPOC-owned businesses who are certified and considered contract ready only capture a small percentage of the market.
Deborah Membreno 10:48
You work, as I mentioned, one on one with the businesses to help them understand how to work with these procurement offices. What do you see as major challenges? What do you think we can do here as a collective to serve the businesses better and support them?
Rene Cota 11:05
Great question. The way we look at it, at our firm specifically. What we would consider government contracting whether it's federal contracting, state, municipalities, counties, utilities, and then there are smaller agencies off of that. Or even as a subcontractor to a prime contractor looking at the types of opportunities on that side.
Rene Cota 11:25
What we really looked at is boiling down the services and resources. There are tons of resources and tons of services out there for small and diverse businesses to understand what is the best approach on that side, and the one-on-one services, to your point.
Rene Cota 11:42
What we really looked at was the participant coming into the program and then supplying them with an entire business development team.
Rene Cota 11:50
Where they actually have analyst mining, searching opportunities, and looking through scopes of work. That you have a project manager that's going to walk them through an actual request for proposal, no matter how scary it is. Typically, you look at some of these things the scopes, the requirements, and all the hurdles just getting through that document was really critical to take them by the hand.
Rene Cota 12:13
That participant has all the resources they need. If they have a question on a totally obscure requirement, whatever it is. They reach out to their project manager or contract manager and say “What are they talking about here? Make me understand what this is specifically.”
Rene Cota 12:33
And then, as we move into proposal production. Having a technical writer take them by the hand and write this thing out. We start with the template and we say okay here's what's needed, here are the requirements, here's the scope of work. How are we going to create added value?
Rene Cota 12:43
That's the one on one that we have found to be extremely valuable to the participant. The majority of times, if you want to simplify this, we looked at that small diverse company coming in saying: “I don't have enough time, there's just not enough time in the day and in the weeks to look at the specific scopes of work and understand what it is. And then pivoting into proposal production and trying to understand, once I submit this, how am I going to actually get this off the ground?”
Rene Cota 13:15
Having that one on one resource for them, specifically, we think has been incredibly valuable. This is what we preach to the participant: When you come into the program you're going to have a ton of resources, a business development team. And your mindset is to say my analyst, he or she, is searching for specific scopes of work and they're just not hitting the specific point that I want.
Rene Cota 13:43
What I explained to them on a regular basis is you have to look at this situation like that is almost your employee. We're going to have to guide them, just as you would a brand-new employee. You would have to train somebody that this is what I’m looking for, this is the scope of work i'm looking for, this is the geographic area of operation. Here are the thresholds, here are the requirements that I meet, and here are the requirements that I don't meet. This is where I'm not a Union shop, I’m not a signatory, whatever the case is.
Rene Cota 14:10
Once we're honing that down and the participant really understands that I’ve got a ton of resources. And the total of the ultimate objective in that process; because you think about the analogy to feed somebody give them a fish they eat, teach them to fish…
Rene Cota 14:29
From that analogy, is understanding the ultimate objective for the participant is to say these are micro-processes. These are micro-processes that I’m going to implement within my business.
Rene Cota 14:39
So the takeaway for them, and we hit on this on a regular basis, is as we go through this proposal production and then hopefully contract award where they're really nervous if they've never been a prime contractor or even a subcontract and go “oh my gosh what am I going to do at this point”.
Rene Cota 14:54
Walking them through a kickoff meeting: here's what we're looking at and this is the documentation. Now, these are the requirements. Now, here's what's expected of you. This is where you're going to have to be able to provide your product, your service, whatever it is, and at what timeline.
Rene Cota 15:08
And then, setting up a lot of those documents for them, setting up a cloud-based system or into a drive system.
Rene Cota 15:14
Maybe they're not acclimated or they are not computer savvy and ask “how do I do this”. We are step by step walking them through it. They can definitely do it. It's just a matter of going back to my original point about the time.
Rene Cota 15:29
What I tell participants all the time is what we're really doing is saving you time and we're making sure that you have those resources that you can lean on.
Rene Cota 15:40
Whether it's the LMU folks or whether it's Claudia on the business development side. Understand you've got to be able to reach out. If you're not reaching out trying to understand those resources, then you're letting this go by.
Rene Cota 15:54
What I really preach to a lot of the participants coming in is if it's a six-month cohort, a nine-month cohort, or whatever it is you don't want to be the company that sits there. When you get the notification “hey we're about 30 days out and we're going to be done”, and you sit back and you go “oh my gosh I just didn't take advantage of that.”
Rene Cota 16:09
And we've seen that before in the past. They're coming back and saying “Can I get into another cohort?” Absolutely, because they started understanding the real resources and the one-on-one. Which is what we think is the value. Having those resources specifically moving them through.
Rene Cota 16:33
That is our mantra about one on one is making sure the participant understands, we're going to take a business development team out of the sky and drop it on your business. And say they're yours now and utilize them. That's where we fall or our mindset specifically on a one-on-one consultation.
Deborah Membreno 16:51
And you're speaking to the support specifically that Ascend LA provides, and LMU is also our partner for the Ascend LA Program.
Deborah Membreno 16:59
But, how do you support in general, businesses or entrepreneurs that are diverse? We're looking to meet the supplier diversity goals. How is our approach different?
Deborah Membreno 17:10
Claudia, you mentioned supporting the entrepreneur, and I think David's team does a lot of entrepreneurship mindset work. A lot of it is beyond the business development work that is done.
Deborah Membreno 17:27
I'm curious to hear from all of you, whether a business has access to something like Ascend LA or whether they don't. What could you offer as some words of wisdom for those businesses who are diverse and who are looking to get into the market?
Rene Cota 17:44
I'll jump in on that question. Just from a strategy standpoint, before Dave and Claudia give there's. What we do, specifically on the business development side, is the research and planning. They look at who has a diversity program, how robust is it, is it just lip service. I hate to say it that way, but a lot of times, businesses will understand that.
Rene Cota 18:09
And they'll say, this particular program is serious about their diversity program, their small business program, and they've got advocates.
Rene Cota 18:14
And what we tell the participant is there's no lie in the numbers, take a look at the numbers. What is the forecast? What have they done? How much business do they do with small and diverse businesses? How small is the amount of business they do with them? Is there a possible opportunity to wedge yourself in as an opportunity, on that side?
Rene Cota 18:33
From our standpoint at the firm, we look at the diversity sector as wide open and the spectrum is huge. You have everybody, from who is dead set on the diversity span and saying listen, we will contract with these companies. All the way to the good faith effort type of situation where you go there's no seriousness there.
Rene Cota 19:02
The answer I would think we talk about with a lot of participants is look at the numbers, look at the research, and see what programs are robust. And don't waste your time, especially as a small business. Don't waste your time on a specific agency or prime contractor that you've seen lip service, or maybe their program isn't that robust. Don't waste your time, you can change that at a later date, and talk about how to fix those things, absolutely. But you need to be focused on the business and closing those contracts. That's our mindset on that side.
David Choi 19:38
Deborah to answer your question. To a certain extent, we customize our approach to the special needs of our unique and diverse businesses and sometimes we don't.
David Choi 19:48
The areas we don't, we try to get our participants ready for contracts. That means we got to teach them certain skills that are standard and required for everybody.
David Choi 19:59
For example, how to write a capability speech/ statement. Which we went over last weekend, we can talk about how to write certain aspects of the proposal, how to budget, and how to do financial projections.
David Choi 20:11
These are skills that our participants are going to need, so we go over those things. But we also know that these things are, by the way, very, very hard. Large companies have MBAs and professional proposal writers. We have the small business owners like, you mentioned, not all of them have college graduate degrees.
David Choi 20:35
And now they have to write these proposals and compete against these companies. So we also try to get them like, you mentioned, to have them have the right mindset.
David Choi 20:45
Positive entrepreneur mindset to they can be proactive and innovative and as Claudia mentioned resilient. So we practice that and that's the foundation of our management education approach. Lastly, we know that from observing successful entrepreneurs, what they do well is plan and they put it into action.
David Choi 21:06
So one of the things we focus on in our program is to come up with plans but also really put that into action. Those are some of the different customized approaches in the Ascend Program.
Claudia C Morales 21:22
I think what I would add to what both David and Rene have mentioned is that it's definitely important to have the hard skills. When it comes to research and planning, that is the foundation, I would say, for any business.
Claudia C Morales 21:33
I would say, for us what's become really important is really focusing on the social aspect of the business. And I think both Rene and David mentioned this before, but how committed are firms and companies really when we think about diversity, equity, and inclusion. And so, myself, being a social entrepreneur, I've really had to get in the habit of providing evidence for the work that I do as a business. In order to say how does this positively impact just the employees of the firm but also the community at large. And understanding their metrics are really important and really having clarity of what your outcomes are.
Claudia C Morales 22:09
And I think that what I have seen is that people are very willing to work with you when you're short of the mark and when you're not quite where you want to get to.
Claudia C Morales 22:19
We believe in extending the social network, and making relationships with other business owners who are also trying to figure out the same issue. Talking to people that maybe have already figured it out and then, what are the tips that they can share.
Claudia C Morales 22:31
People are really supportive in that sense, but I think when entrepreneurs are shy to talk about their challenges. When they're like I don't know if this is going to count against me if I talked to them about some of the struggles that I’m having.
Claudia C Morales 22:43
Transparency could go a very long way. I would sum it up by saying that we really focus on the people needs of business and understanding what makes a business successful. And any goals that you've set for yourself around diversity inclusion have to start and have to be about people.
Deborah Membreno 23:02
I absolutely agree, at LISC LA, we really tried to push for Community support. And something that we've seen as a part of our cohort is that businesses can do business together. Some proposals could go in together while other ones might be competition and that's totally okay.
Deborah Membreno 23:22
We want to build community, we want to make sure that we're sharing the knowledge. And even part of us being a part of this podcast together is also coming in community and sharing.
Deborah Membreno 23:33
We are almost out of time. I just want to make sure if you have any last words or anything you'd like to share. Whether it is with entrepreneurs or with potential partners that might be listening. I'll give you the floor, if you want to share anything right before we wrap up.
Rene Cota 23:52
Oh, my. After you gave the floor after that. David, you knew I was going to cut you off.
(Laughter)
Rene Cota 23:58
Sorry about that. I would just say I would talk about LISC LA. It's just amazing, the programs that you guys are looking at and the type of resources that you're putting out there.
Rene Cota 24:14
I talk to entrepreneurs and small businesses throughout the entire country. And one of the most astonishing people that I’ve ever spoken to is the actual CEO of the La Chamber of Commerce. And she was telling me the story about how she was an actual small business person and she had no idea how many resources are out there.
Rene Cota 24:32
So I would just like to give a pat on the back to LISC LA in general and have pushing forward these initiatives and it's just great.
Rene Cota 24:41
And I know for a fact a lot of the businesses out there just may not know enough about some of the resources out there. Because the things that you guys are doing, are really amazing, to be honest with you, so that was just my small shot there. That's my two cents.
David Choi 24:57
No, I actually agree. We're not just saying this because we're on the podcast with LISC, but LISC LA is a well-run organization.
David Choi 25:07
And people think oh a nonprofit, how well run can they be. But I've been quite impressed with how effective you guys are.
David Choi 25:17
I really like what Claudia mentioned about what entrepreneurs are needing and they should network more often with other businesses small and large. And that, if you're honest about what you're good at and what you're not good at. People really want to help other entrepreneurs, big businesses, and small businesses. It's amazing, as long as you're honest, hard-working, and a nice person. Guess what, people are willing to help, so I would ask our entrepreneurs, not to be shy and cooperate with other people.
David Choi 25:54
What you mentioned about maybe writing a proposal together with other Ascend businesses. I think that'd be really powerful. That would be the most diverse proposal there is so I think there is a winning chance there.
Claudia C Morales 26:12
What I would also say is that not all entrepreneurs are created equal. What it means to be an immigrant entrepreneur versus a woman entrepreneur. Those experiences and the nuances of that are very, very different. Really understanding what those true-to-life experiences are, I think, better can inform the services and support that are available.
Claudia C Morales 26:32
One of the things that I appreciate about LISC LA. I've had the opportunity on a number of times to connect with the staff there. And I find that they're involved, they're sitting in on working groups, being part of meetings, talking to the community, and being with the community. So that they can better understand what is really happening on the ground and how you target the services that you offer to meet those needs.
Claudia C Morales 26:54
I think for me it's just really important to be able to meet people where they're at. And teach entrepreneurs how to work on their business versus working in your business. Because oftentimes as a small business you get so caught up in the day-to-day. You forget to take a step back and remember the why of why you started your business and why you're doing what you do. So I think that a combination of that really goes a long way to help people develop that entrepreneurial mindset.
Deborah Membreno 27:22
And with that. Thank you so much, David, Rene, and Claudia for joining us today. Your insights are really essential to understanding business development, and how businesses access new contracts.
Deborah Membreno 27:35
Each of you plays a vital role in achieving economic equity outcomes in the space, especially during the pandemic. So we look forward to continuing to work with you to dismantle systemic barriers and increase economic mobility through groundbreaking work.
Deborah Membreno 27:50
Thank you so much.
Deborah Membreno 27:55
This episode of Changemakers LA was made possible by our partner JPMorgan Chase.
Deborah Membreno 28:05
If you would like to learn more about how we support place-based initiatives for housing and economic development at LISC LA, please visit us online at www.LISC.org/Los-Angeles. And follow us on Twitter @LISC_LA.
Deborah Membreno 28:20
You can find the rest of the series on iTunes, Spotify, and Google podcasts. Subscribe to hear more conversations about the people and places that shape Los Angeles.
Deborah Membreno 28:30
This podcast was produced in collaboration with Growing Greatness Now, a consulting firm committed to social and environmental justice.
