DBE PROGRAM SPOTLIGHT
IN-DEPTH PERSPECTIVES ON DBE SUCCESS Results of a National Survey By Janine Kyritsis and David Keen
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wners of DBE firms find their own paths to success. Even so, there are lessons from DBE success stories for new and emerging business owners. In this extension of our Spring 2019 article in American DBE Magazine, Keen Independent Research highlights our research on practices of 749 DBEs identified as “most successful” by state departments of transportation. We performed this analysis as part of our nationwide study for the Transportation Research Board of the National Academies of Sciences, Engineering, and Medicine (TRB). The full report, “Compendium of Successful Practices, Strategies, and Resources in the FHWA Disadvantaged Business Enterprise (DBE) Program,” will be published by TRB in the coming months. Our first article in American DBE Magazine discussed the number of successful DBEs working for state DOTs and reviewed data about their characteristics. We described how Keen Independent Research worked with state DOT staff and other groups to identify the DBEs that were most successful in working with their state DOTs. They identified 749 successful DBEs, including graduated firms, based on different criteria for “success.” This second article provides an indepth look at DBE perspectives on what made them successful. We also summarize the types of training and other assistance that successful DBEs see as helpful and compare those insights to what state DOT staff think are most useful. These results are gleaned from in-depth interviews with current and graduated DBEs, survey responses from DBEs and state DOTs, and review of interviews and focus groups conducted with successful DBEs.
Practices and Behaviors of Successful DBEs Successful DBEs seem to go through the same stages of development as any other firm, but with better results. These stages of development can be summarized as:
• Pre-start-up; • Start-up; • Growth and change; • Surviving unfavorable economic conditions or other events; • Relative stability and profitability; • Succession planning; and • For some, exiting the DBE Program or another program. Different types of assistance are needed for a company to move from one stage of development to another, as discussed later. The in-depth interviews with successful DBEs revealed nine common factors important to their success:
1. Experience and relationships prior to start-up 2. Being in a field with demand for services 3. Access to capital 4. Business acumen 5. Quality of work and reputation 6. Relationships with customers 7. Ability to hire, train and retain quality workforce 8. Operational efficiency competitive pricing 9. Succession planning.
Many owners of certified businesses said that they had prior experience in their respective industries (see factor #1). Many owners had family in the industry as well, and this factor often influenced their decision to start their own business. For example, an African American business owner commented that because his wife’s family owned a construction business, he’s “always been around it,” and was confident enough to start a similar business of his own. Access to capital is also needed for success (see factor #3). Access to capital, financing and bonding are all related, and many businesses examined in this study commented on the importance of those factors. An African American owner of a certified professional services firm, for example, said that access to capital and financing are key to her firm’s success. She credited a microloan she received from a local business initiative as being especially helpful. One African American owner of a construction firm credited his state DOT’s loan guarantee program as a reason for his firm’s continued success. Positive relationships with customers were identified by most successful DBEs as a reason for their continued success (see factor #6). Business owners said that reputation and quality of work, business longevity, and building good business relationships with customers and others are keys to the success of their companies. One interviewee said that good relationships with prime contractors and “doing the job 100 percent” are reasons for their success. Another interviewee, an Asian American / summer 2019
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