Friday, April 24, 2009
Martin Mohamed walks in and out of several stores at Karmel Mall, an eight year old mall in South Minneapolis that hosts about 300 Somali stores.
Mohamed is the chairman of the African Chamber of Commerce (ACC). He
knows most of the shop owners and calls everyone he meets by name. A
quick tour around the mall shows the growing number of
small-businesses. Mohamed senses the financial struggles some of them
are going through.
â€śThere is a need for the African businesses to grow,â€ť Mohamed says.
â€śOne is to do business with each other, enter the main stream American
business, and to become a certified minority business provider.â€ť
Many African entrepreneurs in Minnesota see the need for their
businesses to be part of main stream American businesses. Penetrating
the local business market is hard for immigrants, and the country’s
financial business does not make it any easier.
The Midwest Minority Supplier Development Council (MMSDC) is an
organization armed with the task of equipping small minority businesses
with tools to overcome some of these barriers. Through their programs,
minority businesses receive a certification which allows them to engage
in business with major corporations likeCargill, Target and others.
Mohamed finds a flaw in one of the MMSDC’s
criteria which requires business owners to have US citizenship so that
they can be certified Minority Business Providers. This certification
authenticates minority business allowing large corporations to engage
directly with them. Mohamed argues that when corporations rely solely on MMSDCâ€™s
certification they indirectly decline to deal with minority businesses
whose owners are US residents, but are not citizens. â€śI donâ€™t think
that strategy is fair.â€ť
When large corporations seek companies through MMSDC
they do so to seek diversity. Mohamed contends that diversity should go
beyond color. While Africans and Africans Americans are both black, the
similarity ends there, he argues. Africans, Mohamed said face
immigration, family reunification, sponsorship, and student visa
issues: different adversities from those experienced by African
â€śI think corporations need to understand the difference between diversity and multi-culture,” says Mohamed. The ACC’s
mission is to “accelerate the development of African immigrant
businesses, entrepreneurs, and families so that they may thrive within
American economic and social systems.”
According to Mohamed the ACC has met with MMSDC
in attempt to have the organization more inclusive: to include African
immigrants in its diversity. â€śThey took us nowhere,â€ťhe says.
Though the MMSDC
is not a funding organization; corporations, according to Mohamed,
allocate funds for diversity, work force programs, and certification
for minority business providers. There are also quotas. In order for
minority businesses to gain access to such quotas, they have to be
certified. Mohamed claims that these resources do not reach the African
immigrant business community.â€śSo far, they have very little
outreach with the African community. Our community is not really going
through the certification. This means they cannot be certified minority
Growing population and businessâ€ś
are not growing as they are supposed to. We are not part of
the networking,â€ť laments Mohamed. On the other hand, the population of
African immigrants in Minnesota is growing at an incredible rate.
2000, Minnesota ranked tenth in numbers of African immigrants in the
United States. According to the U.S. Census Bureau, Minnesotaâ€™s African
population is growing five times faster than the nationâ€™s black
Ryan Allen, an immigration expert and professor of
community and economic development at the Humphrey Institute, agrees
that many Africans immigrate to Minnesota for many of the same reasons
that Hmongs immigrated to here in the 1970s and 1980s.
African immigrants, Minnesota is attractive, â€śbecause the quality of
life is high,â€ťAllan he says. â€śThere are opportunitiesâ€¦ like affordable
housing.â€ť Minnesota, he added is not the only place experiencing the
economic fallout and foreclosure. â€śMinnesota has a lot to offer
According to the Minnesota State Demographic
Center,â€śThe black or African American alone population in Minnesota is
projected to rise 64 percent between 2000 and 2015, and to reach
386,600 by 2030.â€ť
The report “Minnesota Population Projections by Race
and Hispanic Origin 2000-2030”, stated that, â€śBlacks will remain
Minnesotaâ€™s largest nonwhite racial group.â€ť
In Hennepin County
alone, the Black and African America population has increased from
104,725 in 2000 to an estimated 137,300 in 2010 and projected to be
150,500 in 2015.In terms of business, these figures highlight
the need for a more inclusive partnership with Africans or
multi-cultural business as the African buying power is almost $1
billion (annually) as estimated by the Minnesota Bankers
all is well for African entrepreneurs who are still struggling to
sustain their businesses, build wealth or participate in community
activities. Though it has been described as Minnesotaâ€™s fastest growing
market, many Africans find it difficult to operate in the American
For many immigrants the challenges rise from learning a
financial system different from the one in their home country. With
little or no credit it is almost impossible for these new business
owners to get business loan assistance from financial institutions. For
some of these individuals aborting their dreams and working in
different industries seems to be an easier solution. However, there are
others whose resilience has allowed them to fight language and cultural
barriers and to learn how to navigate the business industry.
there were approximately 22,000 minority firms in Minnesota generating
over $3.2 billion in total revenue according to the U.S. Department of
Commerceâ€™s Minority Business Development Agency (MBDA). Some of these
were African businesses.
Around Lake Street in Minneapolis
are about 300 Somali businesses, most of these businesses reside within
Karmell Mall, and a second Somali mall known as “24” (its on Elliot
Avenue and 24th St). While all these businesses are registered with the
Secretary of Stateâ€™s office none is certified by the MMSDC.
Garth, President of the Minnesota Minority Suppliers Development
Council (MMSDC) explains why, â€śThe African community is at this time
concentrated on the retail side of business.”
you look at the businesses that are cropping up around Lake Street and
other areas, those are primarily business-to-costumer businesses,â€ť
Garth said. â€śThey are retail in nature and they have individual
customers who they are marketing and selling to. They are not marketing
to sell to large corporations like Target or 3M.â€ť
The MMSDC, an
affiliate of the National Minority Suppliers Council is one of 39
councils around the country. Garth said the MMSDCâ€™s mission is to
facilitate business opportunities between minority business enterprises
and corporations. She describes the MMSDC as a business-to-business
Garth said businesses like those at the Lake Street are
not part of MMSDCâ€™s
focus or charter at this time. However, she agrees that some of her
organizationâ€™s policies need to be changed. She hopes to discuss some
of the problems among minority-business owners at theMMSDCâ€™s April
meeting in Washington.
Many African business owners interviewed are
concerned about MMSDCâ€™s membership limitation that requires only US
citizens. For the ACC, this limits financial resources and business
influence in minority communities.â€śWe
are very clear that there are still companies that we are not able to
reach at this point in time,â€ť Garth agreed. â€śBecause of citizenship.â€ť
the role that many cherish more than any other is being part of an
organization that considers their contribution to business developments
In dealing with minorities
businesses, ACC argued there should a distinction between diversity and
multi-cultural businesses. Mohamed and others believe that the MMSDC
focuses more on diversity than they do on multi-cultural businesses in
the Somali, Liberian or Latino communities. Linking multicultural
businesses to corporations is what the African Chamber of Commerce
wants the MMSDC look into.
The Somali Mall is home to markets
where dozens of shops are open every day. It booms with activities as
customers look around for goods and services that they canâ€™t find from
other retailers in Minnesota. Tagging African businesses as
â€śminority-businessâ€ť works in some government sectors, but hasnâ€™t worked
well when dealing with big corporations. The problem, according to
experts is the size of African businesses.
â€śThe sizes of any
business will obviously affect their growth,â€ť said D Craig Taylor,
Director of Business and Community Development at the University of
Minnesota. â€śDepending on their capacity; it can affect their ability to
deal with a large or a smaller contracts, and more consistent with
their capacity to perform.â€ťThe lack of capacity to prove
financial stability, management skills and demonstrated track record in
handling projects for big companies, makes African and minority
business owners to become subcontractors.
The MMSDC also suggest this to its small-business members. â€śCorporations
are going to use businesses that have the ability to meet the
requirements or the scope of what is been requested,â€ť Taylor said.
the business is too small, in most cases, they would be passed over.â€ť However, ACC
wants small-business owners to get past the supplier-diversity managers
and sit at the table with those in charge of specific projects geared
towards the multicultural communities. As minority groups
continue to increase, so is the need for their businesses to tap into
new sources for capital. But, without help or certification, many find
it difficult to continue, let alone expand.
The Twin Cities collaborate on certain projects with the MMSDC.
When multicultural businesses are not certified, Mohamed said, they
miss many opportunities such as funding from the government.â€śYou
can do all you want, but youâ€™re not reaching out the multicultural
community who are bilingual,â€ť Mohamed said. These multicultural
businesses have many challenges, especially in trying to survive the
countryâ€™s economic meltdown.
For years, many believe they could
get help from the City to expand or gain access to the corporate
market. Now, nothing is certain because dealing with corporations needs
certification from the MMSDC . Like the African businesses, much of the
Latino businesses also look forward to expand, but no one could offer
any lucid explanation to them beyond the requirements set by MMSDC for business certification. With millions of dollars pouring to other businesses, doubt has descended among the multicultural business communities. Contracts and contractorsIn
2006, the City of St. Paulâ€™s housing and redevelopment services awarded
$220 million in contracts, according to an audit report, but less than
seven percent went to minority groups.
Last year, Mayor Chris
Coleman said while the audit report showed no ill intent â€śthere was a
lack of coordination impeding our ability to do everything we needed to
do.â€ť According to MPR , Coleman also added that, â€śthere were clear lines
of accountability, there was no one person that could be held
accountable or to the council or to the community.â€ťThere are
many minority-owned businesses that are not considered in the process.
Many suggest that a plan should be in place to track general
contractors to ensure that theyâ€™re complying with minority hiring
Clifton Boyd Jr. serves in the committee charged with studying
the contracts dealing with women and minority firms.â€śStill
there is a little struggle up till today,â€ť Boyd said. â€śWe still have a
problem getting contracts with the larger contractors at the City of
Boyd and other members continue to meet with
officials to solve the problems. The contracts to minority groups are
far less as compared to their population.
Boyd emphasized, â€śIt is not a
reflection on the total population.â€ťFive years ago, social
justice groups and African American community leaders demanded the City
of St. Paul to examine lapses in its goals in giving contracts to
minority vendors. However, many of the cityâ€™s critics viewed it as a
bureaucratic response to solving problems far entrenched in the cityâ€™s
The work at the City is not yet over, it still has it
host of skeptics.
In 2004, only two percent of the cityâ€™s total
contract spending went to minority vendors. It was less than the
previous years. St. Paulâ€™s minority population is 39 percent.
who co-manages the Minority Businesses Retention Program for the City
of St. Paul, said while at the Planning and Economic Development (PED),
they opened up opportunities for entrepreneurs, startup businesses and
offered technical assistance.A
t the news Department of Human Rights and Equal Economic Opportunity, Burkhalter
who comes from a corporate background said the department will
coordinate various contracting services to include minority and
she joined the City of St. Paul, her
first job was to know the minority businesses.
â€śYou canâ€™t sell them
anything if you donâ€™t know who they are. It was my habit to go and find
out about their businesses,â€ťBurkhalter said. â€śSo it is the same here to
find out about businesses, and I also have to learn about the
The Cityâ€™s Vendor Outreach Program (VEM) sets
goals for small minority owned businesses.
â€śWe donâ€™t buy fashion,â€ť Burkhalter said, referring to the African
retail businesses at the Somali Mall. â€ś
That is not where we spend tax
NOTE: In the next edition, the challenges and obstacles for minority businesses â€“ views for the MMSDC and the City of St. Paul.