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Landing the big one: LGBT owners work diligently for certification and major contracts

Landing the big one: LGBT owners work diligently for certification and major contracts

June 9th, 2019 by Joyce M. Rosenberg/The Associated Press in Business

In this Tuesday, June 4, 2019, photo Helen Russell, right, and her partner Brooke McDonnell, co-founders of Equator Coffees, pose at their first cafe location in Mill Valley, Calif. (AP Photo/Eric Risberg)

NEW YORK—In the early days of his information technology company, Sam Lehman looked for ways to differentiate his business from its many competitors.

As he searched online, Lehman found the National Gay and Lesbian Chamber of Commerce, or NGLCC, which certifies companies as lesbian-, gay-, bisexual- or transgender-owned, helping them be more visible to potential clients and customers. Nine years ago, Columbia Consulting Group got its LGBT-owned certification and in turn, a boost in sales.

"Within five years it doubled our revenue," says Lehman, whose company is based in Stamford, Conn. "Eighty percent of our business comes from contacts I made through the NGLCC."

A growing number of LGBT business owners are seeking certification that helps them get contracts with companies, including Fortune 500 corporations that have supplier diversity and inclusion programs. Certification is a way for these owners to gain acceptance across the country, including places where they have encountered discrimination, says Justin Nelson, president of the NGLCC.

While same-sex marriage is now legal in every state, gay, lesbian, bisexual and transgender company owners may not be able to get credit in some states, and there are companies that don't want to do business with them. But Nelson thinks the economic power of the LGBT population will create more opportunities for these businesses.

"When we put an economic face on who LGBT owners are, people who think of us as this amorphous group and are willing to take our rights away then understand that we can have a company that has $180 million in revenue," Nelson says.

To be certified, a company must be at least 51% owned, operated, managed and controlled by an LGBT person or people. It must also go through an application process much like companies certified as owned by women, minorities, veterans or veterans who became disabled during military service. Depending on the certification, it is made by an organization like the NGLCC or the government. Nelson says the NGLCC has certified 1,200 companies across the country, and he expects more LGBT owners to seek certification.

A growing number of state and local governments include LGBT owners in their supplier diversity and inclusion programs. The federal government does not have a target for how many of its contracts are awarded to LGBT-owned firms although it does have targets for companies owned by women, minorities, veterans, service-disabled veterans and economically disadvantaged businesses.

Helen Russell and Brooke McDonnell were able to get their Equator Coffee products into coffee bars at big tech companies in the San Francisco area once they were certified.

"Certification matters. It just does. It's one more that thing that gets you in front of another group," Russell says. She finds that large companies that make diversity and inclusion a priority want to buy from LGBT suppliers; when she mentions that San Rafael, Calif.-based Equator is LGBT-owned, it catches purchasing executives' attention.

Equator has gotten contracts after attending NGLCC events that include networking opportunities with big companies and also LGBT-owned firms. She also finds that certification helps win coffee-drinking customers.

Certification also helps convince big companies that the small, LGBT-owned business seeking a contract is worth hiring, says Jackie Richter, co-owner of Heels & Hardhats, a contracting company based in Byron, Ill., that does projects including roadwork and land clearing.

"We've broken down these walls of doubt in our industry," Richter says. "We have won their confidence, and just because I'm the token tranny out there doesn't mean we can't do good work."

Richter and her partner, Cyndi, have been sought out by Fortune 500 corporations. When she spoke at an NGLCC-sponsored event, supplier diversity executives approached her afterward.

"They were companies looking for vendors specifically like us," Richter says.

Large companies with supplier diversity programs have started including LGBT-owned businesses in recent years. Having a diverse supplier base can be part of a corporate social responsibility strategy. But they're also motivated by profit—being diverse and inclusive can make a company's products and services more attractive to customers.

At Ford Motor Co., buying from LGBT-owned companies gives the automaker more opportunities to take advantage of new and innovative products and services, says Angela Henderson, head of Ford's supplier diversity and inclusion program. And being in the program opens up possibilities for LGBT-owned firms and other participants. "They get the opportunity to work with our internal teams to bring to life their own innovations," Henderson says.

LGBT-owned businesses don't have to be certified to sell to big companies, but having the credential can bring them added benefits. At Ford, where companies need to be certified to be in its program, the automaker introduces participants to other big corporations, increasing their opportunities for contracts.

At Bayer, the pharmaceutical and agricultural manufacturer, the supplier diversity program offers mentorship to participants, allowing them to work with executives in different parts of the company, Senior Vice President Melissa Harper says.

Martin Solorzano found the process to be expensive but worth it. Solorzano got certification for his 3-year-old event staffing company, STAFFED, in April, and soon after was contacted by two companies that wanted to increase their supplier diversity. While building his New York-based company was the primary reason for seeking certification, he also wanted to increase his contacts within the LGBT business community.

"I want to network with these people. I want to be with like-minded people," he says.


How to get a small business certified

NEW YORK—Many small businesses can take advantage of contracting and other opportunities from large companies and federal, state and local agencies. They must qualify for certain categories, such as being at least 51% owned by women, minorities, veterans and LGBT owners and they must be certified by either an organization or the government, depending on the type of certification they're seeking.

Here are some of the ways to be certified:

  •    Women: The best-known certification for companies owned by women is given by WBENC, the Women's Business Enterprise National Council. Visit www.wbenc.org/certification. It's also possible for owners to certify themselves on the Small Business Administration website, https://certify.sba.gov , if they meet requirements for the certification.
  •   Minorities: Small businesses owned by U.S. citizens who are considered socially and economically disadvantaged, including minorities, can be eligible for the government contracting program known as the 8(a) Program. Visit https://certify.sba.gov to start the process.
  •    Veterans: Veterans, including those who have disabilities related to their military service, can be certified by the federal government to be eligible for special contracting programs. For information, visit the Department of Veterans Affairs website, www.va.gov/osdbu/verification.
  •     LGBT-owned businesses: The National Gay and Lesbian Chamber of Commerce is the widely accepted organization to certify LGBT-owned companies. Visit. www.nglcc.org.
  •     Economically-disadvantaged areas: Companies in these areas, known as HUBZones, can compete for contracts in a special federal program. To be certified, an owner must first determine if the company's principal office is located in a HUBZone. Visit www.sba.gov/federal-contracting/contracting-assistance-programs/hubzone-program to learn more.
  •     State/local certification: It may be possible for companies in all the above categories to be certified by their states, counties and cities. An online search can help owners find out what they need to obtain certification.
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