Nancy Andrade hands out samples of her vegan and vegetarian tamales at Whole Foods on Roosevelt Road. Photo by Erik Unger via Crain's Chicago Business.

This is a package of six feature stories about minority-owned businesses in Chicago, written for the Focus section.

Breaking out of the niche

Crain’s Chicago Business. November 24, 2008.

James Cabrera had a choice to make.

“There were only two ways to go in my business,” says the president of United Building Maintenance Inc., which started as a small carpet-cleaning company in 1979. “Stay small or grow through volume.”

On the former path, Mr. Cabrera, 57, says, he would probably end up with a minority-focused storefront operation on the West Side, working from his predominantly Hispanic neighborhood. He could be hands-on. Referrals would be good. Customers would be loyal.

But he opted for the latter, and went mainstream.

“If I chose to stay small, I felt like I was operating in a box,” he says. “You’d run out of clients and the cycle of getting work starts to close. I wanted to go after larger jobs.”

Thirty years later, UBM is the largest Hispanic-owned facility-maintenance company in the Midwest, employing 900 and counting AT&T Inc., Commonwealth Edison Co. and United Airlines Inc. as clients. Revenue totaled $21.5 million last year at the private company, which Mr. Cabrera says is profitable.

Like Mr. Cabrera, most small-business owners eventually hit a plateau. But for minority entrepreneurs, the question of how, or whether, to rise higher can be tricky. How do you reach beyond your traditional niche into the mainstream market? And if you revamp your product or service to reach a broader audience, do you risk losing your base clientele?

Read the full story here.

Graduating from set-asides

Crain’s Chicago Business. November 24, 2008.

Obtaining government set-aside contracts is one way minority-owned businesses can scale up and compete in mainstream markets.

Chicago aims to award just under a third of city contracts to businesses certified through its Minority and Women-owned Business Procurement Program. State and federal agencies do the same through Disadvantaged Business Enterprise programs, which have varying eligibility requirements for qualified firms depending on the industry.

For example, to bid on minority set-asides from the U.S. Department of Transportation, a firm must have less than $20.3 million in annual gross receipts, and the business owner’s net worth cannot exceed $750,000. The idea is to help firms “graduate” out of government-assisted programs into the private sector once they achieve a certain size.

Ernest Wong, 49, started his landscape architecture firm, Site Design Group Ltd., in 2000. Though revenue totaled $1.2 million last year, his business has yet to grow as big as he needs to take on bigger, private-sector projects. About 75% of his work comes from city contracts.

“How am I ever going to graduate if I’m not able to get these larger projects as a prime (contractor)?” he says.

Read the full profile here.

Looking to create jobs close to home

Crain’s Chicago Business. November 24, 2008.

Some minority entrepreneurs aim to balance growth with commitments to their communities.

Colby Smith, 49, and William Leggett, 61, started their debt-collection agency, Collectors Training Institute LLC, in 1995 with a mission of creating jobs in an underserved neighborhood.

Almost all of their employees have been black, most from the same ZIP code as the company’s call center, in the old Sears Roebuck & Co. administration building in North Lawndale.

But the company’s growth has been limited by the size of its locally owned clients, which included Great Lakes Consumer Services and the Community Bank of Lawndale.

In their search for bigger clients, the duo highlighted their commitment to the community in order to stand out from other collection agencies.

Read the full story here.

Still room for improvement in hiring, sales

Crain’s Chicago Business. November 24, 2008.

Between 1997 and 2002, the number of minority-owned firms in the U.S. increased by 30%, three times the national average for all businesses. Gross receipts grew 12%, compared with 5% among all other firms. Minorities, who make up one-third of the U.S. population today, are expected to become the dominant demographic by 2042.

But minority-owned firms still lag behind their counterparts, especially when it comes to employment and revenue.

Read the full story here.

Making the leap into the big leagues

Crain’s Chicago Business. November 24, 2008.

Entering the mainstream market requires size, scale and capacity. But most minority-owned firms remain small. Here are some common obstacles to growth and how to overcome them.

1 Lack of access to capital

Minority businesses are denied bank loans twice as often as white-owned firms. If they do secure financing, they often are charged a higher interest rate. It’s no wonder they are more likely to use credit cards, in addition to personal savings, when starting up. But a better source of capital may be equity financing. For entrepreneurs who can’t get a loan but don’t want to swipe plastic, “the next best choice is your SBA guaranty loan,” offered through the U.S. Small Business Administration, says Timothy Bates, professor of economics at Wayne State University in Detroit.

Read about all four obstacles here.

Q&A: Why growing minority biz matters

Crain’s Chicago Business. November 24, 2008.

Read the full Q&A here.

Photo by Erik Unger via Crain's Chicago Business.

This profile appeared in the annual “40 Under 40″ issue of the Focus section of Crain’s Chicago Business.

35 President, Spaan Technology Inc.

Smita Shah is a self-proclaimed math geek. As a fifth-grader in west suburban Willowbrook, she sat with friends in the back of class converting word problems into algebraic equations.

“I was such a dorky little person,” she says.

Instead of track and field, Ms. Shah ran “math relays” in high school, racing to fill in parts of long equations and pass them off to team members at the University of Chicago Laboratory School, where she helped win numerous statewide competitions.

“I saved all the ribbons and medals,” she says.

She shows the same drive today as president of Spaan Technology, a Chicago technology and project management firm she founded in 1998 after earning a master’s degree in civil and environmental engineering from the Massachusetts Institute of Technology.

But instead of math problems, she solves engineering riddles — whether it’s how to upgrade electrical systems for the Chicago Public Schools or design traffic signals for the Illinois State Toll Highway Authority. In the past 10 years, her company has grown to 50 employees and $10 million in annual revenue. Last year, it was No. 1,821 on Inc. magazine’s list of the 5,000 fastest-growing private companies.

Read the full profile here.

Photo by Wokai.org.

Originally posted on Worldchanging.com.

With about 300 million people living below the poverty line in China, microfinance — most commonly defined as small loans for impoverished individuals to help them achieve financial self-sufficiency — is an attractive option.

Wokai.org, “a capital-contributing microfinance intermediary,” is trying to bring money to Chinese entrepreneurs who want to set up their own small businesses, like dumpling shops, fruit and veggie stands and animal husbandry operations.

Wokai, which means “I start” in Chinese, fosters entrepreneurship and fights poverty by raising loan capital online from individual contributors for microfinance institutions (MFIs) in China. Its goal is to expand financial opportunities for the country’s poor (and mostly rural) population. Though its primary goal is fundraising, Wokai also provides “capacity building” for microfinance organizations, which can mean anything from emotional support for first-time borrowers to computer training for loan managers.

When Wokai launches its new website in mid-November, it’s going to be like Facebook, Kiva andWikipedia combined, says 24-year-old Courtney McColgan, one of the co-founders.

“While we are a fundraising platform, we’re also an information platform, and we’re building a community around China microfinance in the United States,” McColgan says. She started the Internet-based nonprofit in the fall of 2006 with fellow American Casey Wilson. The two met while studying advanced Chinese at Tsinghua University, and since then, they have set up Wokai’s headquarters in Beijing and established three U.S. chapters: Seattle, San Francisco and New York. For now, they’re still recruiting a replenishable stream of interns and volunteers to help raise awareness about microfinance in China, as well as research potential lenders and set fundraising goals.

How does it all work? According to the website,

Wokai partners with local MFIs which identify and screen potential microentrepreneur clients. Selected clients are then posted on the Wokai website through profiles that outline their business ventures and loan request. Contributors browse these profiles, select who and how much to finance, and then transfer money to Wokai through our online payment system. Once funds are transferred, Wokai distributes this loan capital to partner MFIs for allocation to microentrepreneurs. At the end of the loan cycle, partner MFIs collect loan repayments and re-issue loans.

So it’s kind of an online recycler of microfinance loans: your contribution gets used multiple times to help more than one person. The average Wokai loan is about $300, which is usually paid back between six months and one year. McColgan says there is a high success rate of repayment.

Wokai was set up as an “intermediary” because of legal and governmental restrictions in China. As McColgan says, “[MFIs] are not illegal, but they’re not legal,” so they’re not given an official status. In other words, they’re “under the black curtain.” As a result, MFIs cannot mobilize funds through savings deposits and active and capital markets. And grants quickly drain away because of operational inefficiencies and a lack of support after an initial fundraising period. That said, Wokai connects with local “field partners”–based on certain criteria–to allocate the funds to Chinese borrowers.

“Our job is to raise money abroad, bring it in, and funnel it through their system and give contributors the opportunity to see that people can pay loans in China,” McColgan says.

And that’s where the Internet social networking microfinance mash-up concept comes into play. Wokai will be similar to Kiva in that it highlights the individual aspect of microfinance by featuring profiles of both entrepreneurs and lenders to facilitate face-to-face engagement; in other words, it’ll empower users to pick and choose where their money’s going. Also, it’ll be like Facebook because users can network with each other, start discussions and share content. And, finally, it’ll be like Wikipedia because volunteers will edit and translate English content into Chinese in order to create a fully bi-lingual platform, catered to field partners in China, as well as U.S. chapter staff.

Currently, the nonprofit is fundraising for $50,000 to cover operational costs through April, which will include the costs of training, evaluating and coordinating with its field partners in China, as well as paying its staff and rent. To listen to a 5-minute podcast with the co-founders, click here.

Olympics expert Ed Hula is the editor and founder of AroundTheRings.com, a Web site that provides news and information about the Winter and Summer Olympic Games. In a Crain’s video interview, he analyzes the pros and cons of each host city candidate for the 2016 Summer Olympic Games: Tokyo, Madrid, Chicago and Rio de Janeiro. According to his analysis, Chicago has the best chances so far. But with more than a year to go before the winner is announced, it’s going to be a tight race. The International Olympic Committee will make its final selection on October 2, 2009.

Focus Editor: Laurie Cunningham
Writer/Producer: Erica Schlaikjer
Multimedia Producer/Editor: Jeff Hartvigsen

Image courtesy of bambu.

Originally posted on ResponsibleChina.com.

The co-founders of bambu, a so-called “renewable ideas company” based in Shanghai, brings “responsible manufacturing” to market with bamboo housewares, kitchen products and tabletops.

Listen:

The ResponsibleChina Show: Jeff Delkin and Rachel Speth, bambu

Photo by Erica Schlaikjer.

Taiwan Business TOPICS. June 2008.

Get an introduction to Taiwan’s aboriginal culture with this suggested three-day tour starting in Pingtung in the south and heading north along the East Coast to Hualien.

Since the late 1970s, the Taiwan aboriginal revitalization movement has contributed to a rise in indigenous cultural tourism. Popular sightseeing destinations include the Wulai Hot Springs Village in Taipei County, Sun Moon Lake National Scenic Area along with the nearby Formosan Aboriginal Culture Village in Nantou County, and the Yami-inhabited Orchid Island. Possibilities for visiting indigenous areas are endless, but here’s a sample itinerary for an easily manageable “three suns and two moons” trip – a tour originally organized by the Taiwan Indigenous Cultural Enterprise Development Association for its inaugural World Summit of Indigenous Cultures held in Taipei this April.

Day one:
Although many rural indigenous people have relocated to cities in search of better economic and educational opportunities, vibrant tribal communities are still scattered across the island. To begin exploring them, take the high-speed rail from Taipei south to Zuoying Station on the outskirts of Kaohsiung. Here you can connect to the surrounding indigenous areas around Pingtung.

For an unconventional way to experience aboriginal culture, consider visiting the Pingtung County Laiyi High School（來義高中）in Laiyi Township’s Gulou Village. The interdisciplinary institute helps sustain aboriginal culture through education, sports, arts, and performance. Most of the students belong to the Paiwan tribe. The school’s talented song and dance troupe, which often performs for visitors, is known for its elaborate costumes and creative exploration of modern and traditional styles. Tel: (08)785-0086. http://www.lyhs.ptc.edu.tw

The Taiwan Indigenous Peoples Culture Park(台灣原住民族文化園區), located in southern Pingtung County’s Majia Township, was established in 1987 to help preserve Taiwan’s aboriginal legacy. The outdoor park occupies about 82 hectares in an area mostly inhabited by members of the Paiwan and Rukai tribes. You can watch song and dance performances in the Naruwan Theater, browse museum exhibits, walk through replicas of traditional tribal houses, try your hand at archery, or ride a traditional Rukai swing in the “DIY” (do-it-yourself) area. http://www.tacp.gov.tw

Up in the mountains of Sandimen Township (三地門鄉), learn about the Paiwan culture’s legacy of making glazed beads. Traditional glazed beads were crafted with clay and represented nobility and power. Now contemporary artisans have adapted the symbolic jewelry into intricate and stylish glass designs. The Dragonfly Beads Art Studio (蜻蜓雅築), at 9 Jhong Jheng Road, Section 2, is a beautiful workshop that was founded by a Paiwan couple in 1983. After the husband, Chen Fu-sheng, died in a traffic accident, his wife, Shi Xiu-ju, became even more determined to fulfill her mission of promoting Paiwan arts and craftsmanship and providing jobs for local aboriginal women. The studio offers tourist packages that include a half-day tour of Sandimen, interactive bead-making activities, and meals and beverages from the on-site café, which features a lovely outdoor terrace. Tel: (08)799-2856

For another artistic excursion, check out Ljegeay Mavaliv’s “Tribe of Brightness” (光的部落) design workshop in Jiayi Village. The 49-year-old Paiwan artist specializes in batik and hand-dyed fabrics, pottery, glazed beads, oil paintings, and wood and stone carvings. He says he works with the Taiwanese government and local community organizations to help nurture the next generation of indigenous artists. Tel: (08)799-0366

After a long day of sightseeing, sit down for a hearty aboriginal-style meal at Shanchongtian Restaurant (山中天餐聽), 10-1 Jhong Jheng Road, Section 1, where you can try sticky taro cakes and millet rice sausage. Shanchongtian also offers hotel rooms decorated with indigenous designs. Tel: (08)799-3440. http://sandiman-sct.idv.tw

Read the rest of the three-day travel itinerary here.

Nest Collective

Originally posted on Worldchanging.com.

A group of foreigners doing business in Shanghai recently hatched a new idea to bring “design with a conscience” to the China market. NEST, as the retail collective is called, aims to unite “intelligent design” with “responsible manufacturing” through collaboration among eight different brands selling sustainable products, including Wobabybasics organic baby clothes; AOO recyclable furniture; and Jooi Design home decor and fashion accessories. The project is sponsored by Hu & Hu, a Chinese antiques company, and Arabica Roasters, suppliers of organic, fair-trade coffee.

The 100 square-meter loft space, located in the International Artists Factory on trendy Taikang Lu (think: Shanghai’s SoHo) is slated to become one of the first “carbon-neutral” retail shops in China, in step with places like the island of Chongming’s Dongtan, billed as “the world’s first eco-city,” and URBN Hotels, China’s first carbon-neutral hotel (editor’s note: despite positive intentions and leaders the likes of Bill McDonough, there are still myriad problems with the eco-city trend).

The NEST design collective focuses on three aspects: natural, renewable or recyclable materials; a manufacturing process that has a low impact on the environment, and providing social benefits to the people of China. Some of the product lines included are less obviously eco-friendly, such asAsianera’s bone china tableware or Torana’s handmade Tibetan wool rugs. But then again, sustainable luxury isn’t usually associated with the whole tree-hugging, granola-crunching, hippie-loving thing. The people who helped launch the project plan to host talks with designers and sponsor other educational events at the venue, but the focus will be on the shopping, I’m sure.

“NEST is a perfect metaphor for what we envision. Like a nest, the sum is greater than its individual parts,” according to a Rachel Speth, one of the founders of NEST and co-owner of Bambu.

Speth, who used to be Nike’s regional director for corporate social responsibility, and her partner, Jeff Delkin, who previously worked for Ogilvy & Mather and Leo Burnett, broke out of the corporate world to pursue their own dreams of sustainable business. They talked to me last month, for an upcoming podcast on ResponsibleChina.com, about creating Bambu — their so-called “renewable ideas company” — in 2003. With an office in Shanghai, the duo works directly “at the source,” interacting with Chinese and Vietnamese craftspeople. Already they are well-poised to help lead the NEST project.

“We began Bambu to create interest and excitement in renewable materials and we do that through imagination and integrity,” says Delkin.

“Imagination” comes in the form of design. Because of the versatility of bamboo, which can be woven, pressed, coiled, and laminated, the company offers 120 different housewares, kitchen products and tabletops in seven different categories, from $2 sporks to $45 hand-coiled bowls.

“Integrity” comes in the form of a holistic approach to manufacturing, which gives Bambu products their unique “proudly made in China” label. The company’s production centers are audited for working conditions, products are approved food-safe by the FDA, its raw materials are certified organic, and all its packaging is environmentally friendly. Beyond its products, Bambu is also dedicated to social responsibility. It supports the Grameen Foundation, which focuses on poverty alleviation through microfinancing, and it has contributed more than $50,000 to non-profit organizations through its association with the 1% For The Planet campaign. Speth and Delkin also support Lexus Hybrid cars.

Bambu has become a good example of responsible manufacturing in China, and I hope their innovative vision can stimulate all the baby ideas for NEST into full-fledged business practices.

For more information about NEST, contact Trine Targett, founder of Jooi Design, at (+8621) 6473 6193 or email info@nestshanghai.com.

Photo by Erica Schlaikjer.

Taiwan Business TOPICS. April 2008.

Taiwan’s recycling program has gradually shifted from private management to government control. Experts debate what direction it should take in the future.

“People should stop looking at it as waste, and start looking at it as a resource,” says Chang Wen-cheng, manager of E&E Recycling, one of approximately 15 electronics recyclers in Taiwan.

The it to which Chang refers is the hundreds of thousands of television sets, refrigerators, computers, air conditioners, and other electronics devices that individuals and offices discard each year. Much of this “e-waste” finds its way to the conveyor belts at E&E’s two treatment and collection facilities (one in Yangmei, the other in Taipei). Through a multi-step treatment process, E&E extracts the most valuable parts of discarded electronics. From one air conditioner, for example, E&E can recover 14.6 kilograms of plastic, 4.9 kilos of copper, 19.5 kilos of iron, and 4 kilos of aluminum – leaving behind almost no waste. These raw materials are sold to more than 20 buyers and then transformed into building materials, decorative glassware, or other reusable products. Last year, E&E recycled 796,000 units of e-waste, generating revenue of about NT$60 million (US$1.98 million).

Taiwan’s recycling system has come a long way since it first became mandatory, in 1989, to recycle polyethylene terephthalate (PET) bottles. The government since then has implemented a nationwide mandatory garbage sorting policy, requiring that all household garbage be divided into three categories (recyclable waste, food waste, and general waste). The official list of mandatory recycling items has expanded to 33 items spread over 14 categories, including the household appliances and information technology products that have become E&E’s specialty. But countless other items – from toys to microwaves – are still not legally required to be recycled. This, according to Chang, is partly because the cost of collecting and treating such products is higher than the products’ value.

But for the recycling system to improve further, more will be required than treating additional types of waste.

Read the full story here.

Go for Gold

Originally posted on Intelligent Traveler.

WWF China recently created the Go For Gold campaign, an initiative that that encourages Olympic athletes, National Olympic Committees, and individual tourists to offset the carbon emissions from their air travel to Beijing for this summer’sOlympic Games. Before you hop on that plane, consider that a round-trip journey from New York to Beijing will emit about 6.5 tons of carbon. It’ll cost about $137 to offset, which sounds like a lot, but when you consider the hefty price tag of the ticket that you bought to emit those greenhouse gases in the first place, it doesn’t seem so bad.

According to WWF China’s “green olympics” Web site:

On March 27th, 2007, WWF began a global campaign urging Olympic athletes to “Go for Gold.” That is, to donate the equivalent cost of the carbon emissions from their flights to meet the Gold Standard – or equivalent – offsetting projects. These include wind turbines in Madagascar, solar power projects in Costa Rica, biomass projects in India, and other energy efficiency initiatives. It is expected that China projects will begin soon.

By signing on, as individual athletes or an entire Olympic delegation, participants can become a member of the global team in the race against climate change. Even before the Olympic Games commence, these team members will already be taking home the gold for their efforts in offsetting their carbon emissions.

WWF China has a list of suggested sites to help offset your emissions. To hear an interview with WWF China representative Dermot O’Gorman, check out this podcast from ResponsibleChina.com.

World Summit of Indigenous Cultures

Originally posted on Intelligent Travel.

IT contributor Erica Schlaikjer will be attending the World Summit of Indigenous Cultures, and offers an invitation to anyone else able to attend.

For those of you traveling to Asia this month, consider attending the World Summit of Indigenous Cultures, which will be held in Taiwan from April 12-17. The two-day conference and subsequent three-day tour of the island’s indigenous areas aims to bring together a diverse representation of the world’s indigenous peoples — from artists to government leaders — to discuss the intersections between cultural heritage, globalization, and the environment.

The conference‘s formal list of speakers includes people from the Philippines’Kalinawa Art Foundation, Australia’s Seed Savers’ Network (via video presentation), and the Taiwan Indigenous Enterprise and Economic Development Association (TICEDA). They’ll be exploring these themes including:

1. Indigenous environmental wisdom and protection of the earth’s environment;
2. Indigenous belief systems today; and
3. Developing indigenous enterprise.

The tour, which follows the conference, will explore social interactions in Paiwan and Rukai villages, make a visit to a “hunting school” in Taitung and a wetlands conservation project in Mataian, and discover the intricacies of thePasibutbut, a harvest song of the Bunun tribe that is known for its complex harmonies (you can watch a video of the song here).