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For a small business, especially in the current weak economy, a contract to supply goods or services to a large corporation can be a welcome lifeline. For their part, some big companies are seeking to expand their network of small suppliers.
To serve both their interests, some major corporations, including IBM, Wal-Mart, Procter & Gamble and Home Depot, offer programs to mentor small companies, particularly businesses owned by women, blacks, Latinos and other groups.
Some corporations, including IBM, work with small suppliers who have good if modest track records by assigning an executive to give hands-on advice and guidance for periods of up to 18 months.
Alan Green Jr., co-owner of Green Ink Communications, a media production firm in Voluntown, Conn., said the nurturing "is making a big difference for us to get off the ground."
He joined IBM's mentoring program after he failed to win a company contract to produce a series of employee education videos. The corporation concluded, based on his previous work, that he had a promising business and invited him to participate as part of its outreach to gay, lesbian, bisexual and transsexual business owners.
Green, known as Chip, and his mentor, Carmen Rarden, an IBM purchasing executive, spent two days in 2007 brainstorming at the corporation's diversity supplier program in Charlotte, N.C., to pinpoint Green Ink's capabilities and determine its short-and long-term goals -- a process
"It's typical that companies like Chip's know how to do the work rather than know how to run a business," said Greenhalgh, who is also director of the business school's programs for minority and women-owned business enterprises.
"They tend to always be dealing with crises and meeting deadlines," Greenhalgh said. "But for two days, they sit down, reflect on what they're good at doing, whether it's strategy, marketing or figures -- and no one is good at all three.
"And the mentor is there to hold their feet to the fire -- in a nice way," he added.
Since it began mentoring suppliers in 2003, IBM has used volunteers from its ranks to guide 50 small companies, said Michael K. Robinson, the program's director.
"We identify those with good management, and match them with one of our executives to work with them on identifying and developing two or three business areas to focus on improving," Robinson said.
Despite the economic downturn, Robinson said IBM was continuing to focus on helping its suppliers because "we spent nearly $2.5 billion in 2007 with 350 suppliers in the United States alone." IBM is one of 16 major corporations -- Honda is the newest member -- that make up the Billion Dollar Roundtable. Each member corporation spends at least $1 billion annually with minority-or women-owned suppliers.
Corporations have a strong motivation to help smaller businesses, said Donna Long, of the National Minority Supplier Development Council, which provides a link between minority-owned businesses and corporations, universities, hospitals and similar institutions.
"They don't want to change suppliers every year," said Long, vice president for development. "They would rather work with the supplier they have, but they also want them to be extensions of the corporation and to buy into its values."
At the same time, major companies "don't want to be the only source of business for a small firm," Long said.
Expanding his customer base was one of the goals that Green and Rarden set for their collaboration. But first, they worked extensively on refashioning Green Ink's image and message.
Rarden, who had previously mentored a company owned by a woman, reviewed Green Ink's presentations -- which Green described as "a lot of eye candy, but not a lot of substance" -- and coached the company on how to make them better.
"I pretended I was the customer, and listened to a mock presentation," Rarden said. "Then we improved on that." She also encouraged the three-person company to "think through its values and mission" and put them into a new marketing video. In addition, she offered guidance on nuts-and-bolts areas like the specifics that an IBM purchasing department looks for in a contract bid.
In Atlanta, Home Depot also selects promising young companies to mentor, and participates in the state's mentor-protege business program, where small businesses are paired with large companies.
Gwen Thomas, president of HR Now in Atlanta, which advises companies on human resources management, headed Home Depot's first protege company. When the companies were matched in 2004, Thomas was not assigned one mentor, but rotated through a number of the corporation's departments, including legal and finance, and learned from their executives about Home Depot's policies and needs.
The same year, Thomas renamed her company and, she said, she realized under Home Depot's tutelage that she needed to develop strategies to become better known nationally and connect with other suppliers.
"It was almost like getting an individual business degree," Thomas said of her mentoring. "I had a wish list of what I wanted to learn, and they helped me with it.
"Even now, I can pick up the phone and ask, 'Hey, what do you think about this?' and I'll get a response."
Some small companies also can get corporate scholarships to attend weeklong programs for entrepreneurs at Dartmouth and at Northwestern University's Kellogg School of Management. But Green said his workers were fully engaged in building on what they had learned in the brainstorming session.
"It was like a steroid injection," he said. "We came out of that session so charged and ready to go. It really helped us realize how we could develop our competencies, and how we could grow without hurting our core business."
