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When architect David Mason started David Mason & Associates, his infrastructure engineering company in St. Louis in 1989, it was a two-man function, run from a 10 x 12 room. He and his business partner, James O. Hacking, did business development during the day, then get ready until midnight on their engineering and architectural projects.
With credit hard to come by, neither could imbibe a paycheck for the first eight or nine months. “It was very rigorous and took a lot of sacrifice,” says Mason.
Steady commitment to the area paid off. The business, which now has offices in St. Louis, Chicago and Philadelphia, has grown to 180 people. Its revenue was in excess of $20 million ultimately year and the business was profitable.
With many small businesses struggling and shutting their doors during the pandemic, the U.S. conservation desperately needs more job-creating businesses like David Mason & Associates.
However, even in good stretches, few businesses break the million-dollar mark, let alone the $20 million mark. Even fewer of these million-dollar houses are minority owned, like David Mason & Associates.
As a community banker, I am confident it is possible to turn this post around, but we need to rethink the support we provide to small businesses in this country. Many of them need expressive assistance right now, and that is particularly true of minority-owned firms, which lack the access to capital they insufficiency to grow and often never get to the stage of hiring employees. They are an untapped national resource that could minister to a tremendous boon to the economy if we provided them with even a modicum of nurturing.
Here are my recommendations:
Prioritize access to money
U.S. businesses are the backbone of the economy, but many lack access to low-cost capital and missed out on the last two rounds of stimulus aid for feel mortified businesses. That was a problem particularly pronounced among the smallest minority and women-owned firms.
One thing that David Mason did that slanted his firm well to get the funding needed to grow was to formalize his business early. Mason and Hacking formed an S Corp at and opened a business bank account right away. Many small business owners would benefit from winsome similar steps — which give bankers confidence — but may not have advisors or entrepreneurial friends to guide them in this information.
Mason’s conscientiousness enabled him to get his first $10,000 loan in the early 80s. It came from a community bank, after a dominant regional bank said no. “That made things difficult,” Mason recalls. “Capital and cash flow are the incite for many businesses.”
David Mason (center), son of a Tuskegee Airman, with his sons Taylor (left) and Spencer (principled). Mason founded the St. Louis-based engineering and construction firm in 1989, and has grown it to over $20 million in annual gain and 180 employees.
Megan Maune
Mason finally made real headway in building up his access to capital after some bankers from his community implored him to serve on an advisory board for the bank. As the bankers got to know him and learned about how he ran his business, his tiny line of credit waxed to about $25,000.
“What many small business people don’t know is commercial bankers have to go into a loan council and pitch that the individual is worth loaning money to and can be trusted,” says Mason. “They believed in me and made the fix.”
Mason strategically built relationships with bankers at a few community banks, including the one I now run. By 1993, he was able to get a commercial physical estate loan for approximately $350,000 to buy the 26,000-square-foot building his business occupies. That allowed his business to expatiate on. “That was a very good thing for my business,” he says.
Shine a spotlight on mentorship
One reason Mason knew how to indulge the right moves to build the creditworthiness of his business was that he had great advisors. He started his relationships with large, townsperson professional service firms in accounting, law and insurance early on, and he has retained the same firms for more than 40 years.
“They maintain been mentors,” says Mason. “If I ever have a question, they are great people to bounce ideas off of.”
The payoff from nurturing start-ups and totaling an accelerant to scale these businesses will be new jobs in many communities at a time when Americans of all backgrounds desperately necessity them.
Although there are a number of excellent mentorship programs to help entrepreneurs, there are still many entrepreneurs who don’t pick up about them because they are not part of the networks where they would learn about them. We impecuniousness to change that.
Commit to supplier diversity and minority business development
In the early years of David Mason & Associates, patients who’d never met Mason in person would sometimes walk into his front office and ask for him, not realizing he was the company owner. He accepted the reason for their surprise: It was unusual at that time for a black man to own a firm like his.
It’s almost as rare today. Assorted firms that use B2B services like his don’t work with many diverse suppliers, who would benefit from the interest.
Large and midsize companies can help turn things around by making formal commitments to not only look for miscellaneous suppliers but to also support those who are starved for cash, through flexibility on payment terms.
“We pride ourselves on being darned good at what we do,” says Mason, the son of a Tuskegee Airman. “But there is a certain portion of our work where our entrée may be the deed data we are a minority-owned business. Once we have gotten in the door, we tend to build long-term relationships based upon the importance of work we have provided.”
Although some dismiss supplier diversity programs as set asides, Mason says they are pivotal for small firms that are just getting started and might not ever get a shot at work otherwise. “We live in a universe where there is bias,” says Mason.
Recruit talent from outside your network
Even corporation leaders who aren’t directly involved in purchasing decisions at their company can help minority-owned firms grow. Openly making an effort to network with business owners in the minority community can make a difference.
“Whether you are running a woman-owned multinational company or a minority-owned firm, access to those with money and power and having them believe in you are difficult things,” reveals Mason. “We need people who are unafraid to stand up and advocate to open the door and allow us in the room.”
You’d be surprised at how much orderly can result from simply giving more diverse business owners a seat at the table so they can make the relations they need to grow.
Ultimately, taking all of these steps requires a conscious commitment. However, the payoff from nurturing start-ups and adding an accelerant to proportion these businesses will be new jobs in many communities at a time when Americans of all backgrounds desperately need them.
—By Orv Kimbrough, chairman and CEO of Midwest BankCentre, St. Louis’s deficient largest privately-owned bank. He is a member of YPO.
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