Managing Your Small Business

Right: Monarch Services CEO Meredythe Holmes (seated) pores over a report with Human Resources Director Vivian Jackson

Where to get help for your small business

Working Harder, Smarter
Women and minority business owners share secrets
that helped them overcome obstacles to success

By Kevin Brafford

Meredythe Holmes is as smart as she is savvy. She’s also African American and a female, so when she moved to the Triangle in 1979 she realized it might not be as easy starting a staffing company here like the one she and her husband helped form eight years earlier in Reston, Va.

In baseball parlance, she faced the prospect of coming to bat with two strikes against her, race and gender. So Holmes did the intelligent thing. She sent up a pinch-hitter. Betty Goff, who is white, had been a top assistant to her for years and relished a move to Raleigh. “So when we went looking at office space, we went together,” Holmes says. “People could make whatever assumptions they wanted to make. There was never any overt change of roles, but most of the people we talked to assumed she was the boss.

“It was very easy for the owner behind the company to be nebulous. And that was OK by me, because that’s what was necessary at the time for my business to get off the ground. You learn to live with the realities that you’re given — to work within the system. I kept quite a low profile in those early years. I kind of came out of the ‘closet,’ so to speak, gradually.”

Holmes has since sold Monarch Services but remains the CEO of the company that now has offices in Durham, Raleigh, Greenville and Rocky Mount. She is a prime example of a minority small business owner success story, someone who used intelligence, resourcefulness and a keen business sense to create a niche in a business world whose doors don’t open automatically for everyone.

Those doors are opening, however, and there is more foot traffic through them today than ever. The Annual State of Small Business’s latest national figures show that almost 50 percent of small businesses are owned by women and 15 percent are owned by African Americans, Hispanics, Asians and American Indians. In 1997, the last year for which U.S. Census figures are available, North Carolina ranked 10th in the nation with 61,500 minority-race business owners.

“There’s no question that there are more opportunities today for minorities who want to own their own business,” say Holmes. “There’s just always been less margin for error for minorities, and that hasn’t changed as much.”


‘If You Believe In It, Do It’

Robert Brown knows just how little margin for error there is. In 1960, he returned to his native High Point from New York, intent on going into business for himself. More than a few people, family members included, thought he was crazy to give up a government job as an agent for the Federal Bureau of Narcotics.

A victim of the color barrier, he felt he’d go crazy if he didn’t. “I was making more cases than anyone in my office, but I couldn’t get a merit raise,” says Brown. “I decided if I put that much effort into my own business, it would be a success.”

With his wife Sallie’s blessing, Brown began spending his free time at the public library, pouring through book after book on public relations and crisis management, a field that piqued him. When his research was complete, he quit his job. “My supervisor told me, ‘You’re a damn fool. Your people can’t even eat in a restaurant in North Carolina. If you’re going to quit your job to start a business, at least stay in New York,’” Brown recalls.

His heart, though, was in Carolina. He leased an office in High Point one floor above an abandoned theater and opened B&C Associates, though the name was perhaps a misnomer at the time. “I was a joke,” he says. “I had quit a federal job, I was 26 years old and I only had about $700 saved.” But he took comfort in advice given from his grandmother, whose portrait still hangs above his desk. “She always said, ‘If you believe in it, do it,’ ” he remembers.

He drove across country in search of clients and landed his first big catch with F.W. Woolworth Co., the New York-based company that was still reeling nationally from the demonstrations against segregation in Greensboro a few years earlier. Brown showed up at Woolworth’s headquarters and his request to see the president was granted. “I was sleeping in my car and paying 50 cents or so to get a shower at the local YMCA, but when I went in, my suit was pressed and my shoes were shined,” he says. “I could have come out of the Waldorf Astoria instead of a 1960 Rambler with seats that folded down. First impressions meant everything.”

Brown’s hard work paid off. Four decades later, he and company President and COO Frankie Jones boast of a diversified client portfolio worldwide that includes Sara Lee, Nissan, Michelin, Coca-Cola, General Motors and Office Depot. “Our focus has always been on the client and doing the right thing for the right reason,” Jones says. “One of (Brown’s) favorite sayings is that you can’t do wrong doing right. He taught me the importance of building strong, credible relationships based on integrity and a strong work ethic.”

Minority business owners today who take advantage of the many federal and state assistance programs available (see story this page) owe Brown a debt of gratitude. While serving as a special assistant to President Nixon from 1968-73, he created the Minority Enterprise Program within the Department of Commerce, now part of the Minority Business Development Agency. Other programs followed, all designed to further the business opportunities of minorities. “Attitudes have improved 1,000 percent,” he says. “I’m thankful that others don’t have the barriers to go through that I did.”


Facing Structural Segregation

The obstacles that Brown faced in 1960 and Holmes in 1980 continue to erode as Americans have less gender and race biased. Bigotry isn’t as rampant, especially for women and, to a lesser extent, African Americans.

“This is how it was,” says Holmes. “When we first started our company here, I’d have employers call and say very specifically that they didn’t want an African American, a Negro, a black — whatever the word was then. ‘Send me a white blonde female for this job,’ they’d say. Of course, we didn’t do that. We’d have to educate them, let them know that we didn’t keep records of anyone’s race, that we’d send the best person for the job regardless of any of those things.

“Compare that to today, when we don’t get those requirements — ever. While we all know that discrimination is not dead, it is certainly not what it was.”

There are exceptions, of course, and the most obvious one occurs within North Carolina’s rapidly growing Hispanic population. In 1997, only one percent of small business minority owners in the state were Hispanic. Most experts today put that figure closer to five percent. That’s still a small percentage given that the number of Hispanics living in the state’s metro areas — Charlotte, the Triangle and the Triad — now total more than 211,000 people, a staggering average increase from 1980 of more than 985 percent.

“A would-be minority business owner who’s Hispanic faces one more potential barrier that African Americans haven’t had to face, and that’s language,” says Lew Myers, an African American and the founder and owner of LHM Associates in Durham, a management consulting firm. “It’s just another obstacle that has to be overcome.”

Myers feels a big obstacle facing minority owners today is transparent to many. “There’s what I would call structural segregation now,” he says. “Say I lived in Charlotte and I wanted to get to know a Hugh McColl (the recently retired Bank of America executive). The best way I know to do that is to find out where he goes to church or what club he belongs to and then go there. Now if I was white, I could do that and probably fit in easily enough. But because I’m black, people would look at me as if I was crazy.”

Gayle Tuttle began a small consulting company a little more than 10 years ago that has blossomed into Perigee Healthcare Services, a quality improvement firm located in Garner that provides onsite clinical data abstraction and auditing services throughout the Southeast. When she initially went into business, she shied away from the traditional approach to launching a small company in part because of a bias that also would be transparent to many.

“As a female, and I would think with some other minorities, there just isn’t the knowledge — whether it would be inherent or educational — of how to deal within a banking and investment climate,” she says. “I really took a bootstrap approach because that’s what I knew. I identified a clientele and built a product based on a fair price of what people would be willing to pay me.

“As a minority, had I just come up with the idea and tried to secure the financing, I wouldn’t have had the training and been networked into the community to succeed. Had I needed to develop a pro-forma to anticipate the costs and to jump through those hurdles, I would not have started a business. I applaud those who have.”

To a degree, Ralph Shelton is one who has. An African American, he founded Southeast Fuels Inc. in the basement of his Greensboro home in 1984, leaving behind a comfortable management position at Burlington Industries, where he had learned the basics of burning coal.

With his wife Christine acting as his secretary, Shelton started looking for clients. First up was his old employer, Burlington Industries. Next came Merck, then Miller Brewing. Others followed. “Two things helped me,” he says. “First, I chose to do something that I was enjoying doing already, just on my own,” he says. “Second, while there were certainly financial considerations, I chose to do something that didn’t require huge investment capital.”

Linda Gilleland first opened an insurance agency in 1989. “I worked seven days a week for two years straight,” she recalls. Today she owns Greystone Insurance in Boone, a company that’s 250 percent larger than it was 13 years ago. She was fortunate in that she had a longtime friend in the banking industry who helped the company capitalize in its infancy. “Still, if I knew then what I know today, I think I would have been too scared to go into business for myself,” she says.

“Sometimes,” she adds, “I think being a minority — as a woman — helps you get in the door. In other instances, you’ll find that the doors are still closed. You have to have luck and a lot of determination. I feel very fortunate to be where I am.”


Elements of Success

If you’re a minority looking to go into business for yourself, there is no specific model to follow. “The basic blueprint for success, whether it’s a large or small business, is about the same for everybody,” says Holmes of Monarch Services. “The differences are if you’re a woman, the hurdles are higher.  And if you’re black or Hispanic or any race other than white, they’re even higher still.”

Here are a half-dozen elements minority business owners say are important to launching a successful company:

Outwork the competition. “You’ve got to come early and stay late,” says Brown and B&C Associates. “Nobody is looking to hire someone who’s heading out the door at 4 or 5 o’clock.”

A strong work ethic requires the right attitude. “If a person doesn’t put himself in the right light then he’s not going to make it,” Brown says. “That’s a simple truth in all business, whether he’s white, black, blue or green.”

Access capital. “It’s always been key,” says Holmes. “In a lot of instances, I’ve found that you’ve had to have something to get something, and that’s difficult for someone just starting a business. And face it, most minority businesses don’t have the resources behind them that other companies have.”

Her advice? Add “banker” to your list of important friends to have — the list that includes a lawyer, physician, plumber and mechanic.

Be active in the community. “That’s the way many people first got to know me,” says Holmes. “They saw me out at functions and doing community service work. You’ll benefit personally and professionally.”

Both Holmes and Myers of LHM Associates believe strongly in joining organizations that will work for your company. “There is an association for practically every business,” Holmes says. “Find it and join it.” Adds Myers: “I don’t understand how you can be in business and not be a member of your local chamber and the statewide chamber. NCCBI does wonderful things for businesses in North Carolina.” 

Gain knowledge. This extends beyond a formal education and even graduate school and into the workplace. “Ask questions,” says Holmes, “and surround yourself with people who know more than you do. Learn as much about your business as you can. I don’t believe you ever stop learning.”

Don’t burn bridges. “You had better be kind to everybody,” says Myers, “because you never know when you’re going to see someone who’s wearing a different hat from one they had worn before.”

Cultivate relationships. “People want to do business with people that they’re most comfortable with,” says Shelton. “Once you establish a level of trust, and if you’ve demonstrated that you have a product or service that works, you have the foundation for a strong relationship.”

Finally, include networking in your relationship building. “For a long time I was out many, many nights with people,” says Gilleland. “Sometimes you’re having to do things that you really don’t want to do, but it’ll pay off — maybe not this year but the next.”

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