Firms have to surf in order to survive

Internet: As government uses the Web more and more, so must the minority business owner.

Minority business

January 23, 2000|By Shanon D. Murray | Shanon D. Murray,Sun Staff

For minority firms to achieve success in 2000, they must closely monitor how the Internet changes the way business is done, especially for the federal government, experts say.

The federal government, a significant source of business for minority entrepreneurs, is using e-commerce and the Internet more than in the past, and many observers say contractors must be technologically savvy to keep up.

"Many entrepreneurs are losing out on timely bid information because they aren't plugged in," said Courtland Cox, director of the Minority Business Development Agency, part of the U.S. Commerce Department.

"Minority businesses have to get with the program. They must be hooked up to the various databases of information used by the federal -- as well as state and local -- government," he said.

Currently, minorities account for about 26 percent of the U.S. population, and own 11.6 percent of the nation's businesses.

The most comprehensive statistics related to the number of minority firms nationwide and in Maryland are collected by the U.S. Census Bureau every five years. The most recent statistics available are from an economic census taken in 1992.

An economic census of 1997 is expected to be released this year, possibly as early as this summer, a census official said.

"I'm eagerly awaiting those figures," said Allan Stephenson, Baltimore district director of the U.S. Small Business Administration. "I believe the number of minority businesses have grown tremendously since 1992."

Nationwide, according to the U.S. Census bureau, there were 2 million minority firms in the U.S., with more than $205 billion in sales, as of 1992.

In Maryland, according to the 1992 Bureau of the Census data, there were an estimated 57,000 minority-owned firms.

Belinda Cheng, who is Chinese American and founded Micro Star Co. Inc., an information technology company in Jessup, agrees that minority companies must monitor technological changes in the marketplace to remain current.

"Micro Star is a very different company now," Cheng said. "The Internet has changed the way we do business. It's a trend we could not avoid.

"When the world changes, we change," she said.

The company started as a PC manufacturer of custom-built computers for the federal government and private sector customers in 1983. The explosive growth of the Internet led the company to diversify into network integration and telecommunications services.

In 1998, the company started an information security division that develops online security systems for companies who want to conduct communications or transactions via the Internet, Cheng said.

The company has 30 employees, and expects to add 20 more by the end of the year, she said.

Micro Star is also closely linked to the federal government, with which the company does about half of its business. So when the government started disseminating contracting information over the Web, Micro Star quickly adjusted, Cheng said.

"Everyone's familiar with the term e-business and e-commerce -- well, I like to use the term e-gov, because the government has dramatically changed the way it does business."

Because it is typically too costly to provide a lot of paper materials, many government agencies are transmitting information about contract opportunities through e-mail lists, and some only accept online bids, said Cox, of the Minority Business Development Agency.

So a lack of easy access to the Internet will limit a business owner's access to federal contracts, he added.

Minority business owners lag their counterparts in Internet use and e-commerce, business experts said. Misperceptions and ignorance about the importance of the Internet may hurt minority businesses' ability to compete, said Cortez Walker, coordinator of the business management and marketing program at the Baltimore City Community College.

"Practically every business is using the Internet somehow, yet minority-owned ones still remain a little behind," Walker said.

But changes in the way the federal government conducts business don't end with the Internet, Cox said

Another trend that promises to continue -- if not expand -- during the next 12 months is the federal government's practice of "bundling" contracting requirements into one contract that makes it easier for one big enterprise to do the work, instead of a number of minority, and typically much smaller, businesses, Cox said.

As a result, he said, the number of available contracts is dwindling. "Instead of the government issuing 100 $1 million contracts, it may issue one $100 million contract," Cox said.

Contracts with the federal government have often been viewed as manna for minority businesses especially, but lately, they've seemed slightly out of reach, said Buddy Anderson, chairman and chief executive of Global Service Corp., a Columbia-based building maintenance and exterior restoration company.

Global was founded in 1986, and has 160 employees.

"Government contracts are more difficult to get than ever," Anderson said.

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