It is a difficult and time-consuming task to start a business. Entering the public sector supplier circuit, where lucrative contracts abound, challenges even the most dedicated entrepreneurs. Just like in the workforce, where Latinas earn 54 cents out of the dollar of an equally qualified white male, Latina entrepreneurs must overcome significant barriers to gain visibility in procurement departments. This Women’s History Month, we celebrate three Latina leaders making inroads despite the challenges and highlight how placing the firm at the center of public procurement systems can set the conditions for equitable success.
A firm-centric approach and strong support systems can help Latina leaders establish strong enterprises that prove the potential for economic growth in underserved communities. Additionally, Latina entrepreneurs we encounter as part of our Aspen Latinos & Society City Action Lab bring invaluable skills to the marketplace: adaptability, innovation, and strategic planning. Together, policies that put small firms first added to a drive to succeed offer a more complete and auspicious narrative of Latinas in our economy.
In San Antonio, Rosa Santana’s company, Integrated Human Capital (IHC), participated in a mentorship program focused on networking for new opportunities to scale. Santana’s team then attended Toyota’s Opportunity Exchange event in Cincinnati, where they made connections with Toyota suppliers leading to contracts for a new manufacturing plant back in Texas. Continuing to build a strong relationship with Toyota proved fateful. “One day, we received a phone call from Toyota that changed our lives,” Santana said. They presented Santana Group with an opportunity to assemble parts for their trucks. IHC, however, was a staffing services company – nothing to do with building anything. “I was curious, why did you pick me?”, Santana asked. “We like you, we trust you, you know how to hire people, you have been very patient, you know how to run a business, and the rest we can teach you.” Toyota contracted with Santana Group’s newly formed Forma Automotive to assemble truck beds.
Toyota was taking a chance on a small business with no experience in manufacturing, but one it knew had the right ingredients for success. This is a striking difference between corporate America and local public entities. Toyota set a goal for partnering with minority- and women-owned suppliers and conducted outreach to find suitable companies. It then cultivated these relationships and undertook risk to help one of them scale horizontally to a new sector. This deliberate green housing of the supply chain is a missing ingredient in local procurement departments. Santana explains, “If procurement in the public sector were run by the private sector… they’d be surprised at how many minority and women-owned businesses could meet or exceed their needs.”
ShadeFLA, based in Miami, FL, is a company that specializes in shade structures for a state that sorely needs them. They started small, breaking off from a company that eventually went bankrupt. Owner Margueritte Ramos explains that business at first was difficult: “We had the real estate crash in ‘08, and not until 2012 did hotels want to grow, and we got contracts with them.” Ramos then joined the Goldman Sachs 10,000 Small Businesses Program, what she calls a “mini-MBA” that helped her company establish solid business foundations to grow into one of the state’s major suppliers of shades.
Ramos next hopes to supply shades to the school district, hospitals and universities, and municipalities, but local government fragmentation and notoriously byzantine procurement rules present a significant barrier. Today, her company works with the Anchor Alliance, an Aspen Action Lab member focused on lowering barriers to entry to the market.
Together with entrepreneurship programs like 10,000 Small Businesses, support organizations like the Anchor Alliance create a two-sided system to scale small minority and women-owned businesses, first by lifting them up with strong technical foundations, and then lowering barriers to entry. Heeding the story of ShadeFLA could allow South Florida leaders to open the procurement market to local businesses, a potential boon to the local economy.
Jane Gonzalez is the Owner and CEO of Medwheels, a medical equipment supplier in San Antonio. For years, Medwheels grew and established solid business foundations until the pandemic arrived. But unlike many pandemic business stories, Gonzalez’s is one of strategic planning and growth. When hospitals were in desperate need of personal protective equipment (PPE), Medwheels and its network had already been hard at work sourcing PPE to send to Wuhan, China, where the emergency had first arrived. Their hustle proved critical. “We discovered that the large companies dominate the market in hospitals. Hospitals relied too heavily on them. COVID forced these hospitals to find alternative sources… Small companies were able to get in and help.”
Medwheels’ story is one that reflects on the public procurement sector, where cities and agencies make perfunctory efforts at diversifying their supplier base. But Gonzalez’s argument is not one of inclusion for inclusion’s sake. Investing in local minority and women-owned small businesses means investing in historically underserved communities. “Small companies – we see the faces; I know the neighbors; I know the homeless lady who built a house with pallets in the back of my building. It’s not about being in business, it’s about the influence that we have on our communities. That’s the intrinsic value that’s being overlooked.”
Given the right conditions, Latina entrepreneurs demonstrate the potential of a firm-centric approach to public procurement. A firm-centric approach does not passively expect resource-strapped businesses to outcompete larger ones, but actively seeks them out and nurtures them to maturity. It does not put up barriers to entry for newcomers, but deconstructs them while giving smaller firms a hand up. A firm-centric approach does not seek out the most cost-effective contracts, instead, it procures the best deal for the community. After all, these individual stories of success are laudable, but as Jane Gonzalez explains, community wealth is the goal: “Small companies can be very resilient… we manage to survive to create value for our community.” By putting the firm at the center, cities across the country have the potential to put their communities, and their Latina leaders, ahead.