2014 MBA Annual Report - Cincinnati USA Regional Chamber

2014 ANNUAL REPORT
MINORITY BUSINESS
ACCELERATOR
Featuring newest Portfolio firms,
Goal Setters and Accelerator Emeriti.
The Minority Business Accelerator is the economic development initiative
of the Cincinnati USA Regional Chamber designed to accelerate the
development of sizable minority businesses and strengthen and expand the
regional minority entrepreneurial community. It remains the premier regional
economic development initiative for growing sizeable minority companies.
2014-2015 Minority Business
Accelerator Leadership Council
Phillip Holloman | Cintas Corporation (2015 Chair)
Clifford A. Bailey | TechSoft Systems
Calvin Buford | Dinsmore & Shohl
Andy Butler | Procter & Gamble
Dwain Carver | Ohio Minority Supplier Development Council
John Fickle | US Bank
Mel Gravely | TriVersity Construction Company
Amy Hanson | Macy’s, Inc.
Libby Korosec | Castellini Group of Companies
Steve Love | SRL Consulting, Inc.
Johnna Reeder | REDI Cincinnati
Kathleen Roberts | Northern Kentucky University
Carl Satterwhite | RCF Group
Michael Smith | PNC Bank
David Spaulding | Turner Construction
Denise Thomas | The Kroger Co.
Michael Vanderwoude | Cincinnati Bell
Letter from the Chair
2014 was another strong year as the Minority Business Accelerator continued to find, mentor and develop area businesses as the premier regional economic development initiative for growing sizeable minority companies. At Cintas,
we believe that exceeding our customers’ expectations helps us to maximize our long-term value. When the MBA was
created 12 years ago, it was never expected that the services it provides would result in a 10- fold growth in the size of
the minority companies it serves. In the past five years, the MBA has supported the creation of over 200 jobs by portfolio firms. For every 50 jobs created by MBA portfolio firms, another 39 supporting jobs are created in the region. This
generates $2 million annually in wages and salaries and equates to an additional $8 million injected
into the 2015 local economy! Once again, the MBA has demonstrated to its stakeholders and to the greater Cincinnati community 3800
Jobs
Minority Jobs
that its work drives impact and creates tangible value in the region.
3300
As the MBA continues to look to bring solutions to the marketplace
that remove barriers to accelerated growth, the MBA launched the 2800
L. Ross Love GrowthBridge Fund to provide flexible financing for 2300
minority companies to develop new products, enter new markets or
invest in infrastructure to handle the next “big” opportunity. Even 1800
more jobs are expected to be created by the L. Ross Love Growth1300
Bridge Fund. On the pages of this report, I hope you will be inspired
by the work that is being done by the MBA to take your business to
800
2008
2010
2012
2014
the next level. If you are a minority firm, invest in the assets and
activities that produce the long-term value for your customers and
for your continued success. Four companies have earned Accelerator Emeritus status in recognition of the work they
have done over the years to become some of the most successful companies in the region. If you are a majority-owned
firm, a community organization or a public entity, demonstrate your commitment to the power and value of inclusion
through supporting the MBA and its work.
With your continued support, we work toward bigger results and stronger outcomes in 2015.
Phillip Holloman, President & COO | Cintas Corporation
Stan Williams | Messer Construction Co.
Chamber Staff
Brian Carley
Crystal German
Valerie Kimble
Robert LaMothe
Denise Litter
Rodney Swope
Page 2 – 2014 MBA Annual Report
MBA Leadership Council
Letter from the MBA Team
Our team has been working together over the years to grow sizeable minority
companies and increase the adoption of economic inclusion across the region. And
we can say, without reservation, that the work of the MBA is making a measurable
impact and creating value for our region. Our combined experiences from working in
10 different communities in eight different industries allows us to provide top notch
consulting services to minority-owned companies on how to grow smart and to corporations and middle market companies on how to diversify their supply chain. The result
has been a stronger minority business community and a formidable local market for
their products and services, a few of which are featured in this year’s report.
To the best of our knowledge, our community now has three times as many African-American owned companies with revenues greater than $10 million as it had a decade ago. Today, no major economic or community development project is undertaken
without discussion on how to include minority, women and small businesses. This is a
far cry from the environment in which the MBA was started 12 years ago.
Cincinnati is far from an island—our region competes for talent daily. Young and
mature, and companies small and large. The recognition of the success of the MBA
and the companies it serves by local, state and national media outlets has prompted
other cities across the country to take note of the great work being done in Cincinnati
not only by the MBA but also several other organizations pushing for the increased
participation of small, minority- and women-owned businesses.
2014 Results
At the end of 2014, the MBA’s portfolio of 35 companies had collective revenue
of almost $1 billion and employed over 3,500 individuals, a third of whom live in
neighborhoods across the region. Half of the workforce is minority, and 42% are
women, making their workforces some of the most diverse in the region.
Industry Representation
$34M
$34M
13%
$32M
$32M
16%
$30M
$28M
19%
$29M
33
35
35
19%
7%
10%
$26M
2012
2013
16%
2014
Average Portfolio Firm Revenue
Number of Portfolio Firms
Our work is still far from complete and we need your support to continue making an
impact.
Construction & Related Services
Facility & Engineering Services
Manufacturing
Marketing
Professional Services
Suppliers / Distributors
Other Business Services
MBA At-a-Glance
The MBA process is highly selective.
Admission is based on historical performace, growth potential and soundness
of business operations.
•Three firms were admitted to MBA in
2014 for a total of 35.
•$34M average revenue
•3500+ employees
•Average tenure in MBA is 5 years
MBA staff provides direct management
consulting, driving capacity and revenue growth. Informal or formal boards
are also encouraged. We average four
consulting projects per firm annually.
In 2014, 23% had a formal board to
provide additional guidance. Another
20% had an informal advisory group.
Building business acumen of the
owners and management team is
critical to a firm’s long term sustainability. The MBA connects its portfolio firms
to other training programs, identifying
the best expertise in the region and
across the country.
In 2014, 39% participated in an
advanced training.
Since 2005, the MBA has worked to
grow a local market for minority firms
in the region. The initiative uses MBA
resources to help local companies
identify and source opportunities to
local minority companies.
In 2014, six companies joined the goal
setter initiative for a total of 40 goal
setters with a $1.1 B spend.
2014 MBA Annual Report – Page 3
The Results of our Work – Accelerator Emeriti
The Cincinnati USA Regional Chamber’s Minority Business Accelerator (MBA) announced
that four of its MBA portfolio firms have met the criteria of “Accelerator Emeritus.”
Through work with portfolio companies, the MBA aims to improve the capacity, revenue,
job growth and performance levels of local minority-owned businesses. Firms that work
with the MBA experience a sales growth rate of more than double that of firms who are
not actively engaged with the MBA.
The Accelerator Emeritus designation is to recognize the efforts of the firms to make
their operations, management and financial strength best-in-class. The Accelerator Emeritus status was created to recognize the minority firms who’ve achieved
sustainable, successful business performance and community commitment.
New Accelerator Emeritus Firms
Hightowers Petroleum Co.
d.e. Foxx & Associates, Inc.
}MBA affiliation gives Hightowers
}Partnership with the MBA has allowed
Petroleum Co. its ‘seal of approval’.
~
Hightowers Petroleum Co.’s customers include General Motors, The Kroger Co.,
AK Steel, Duke Energy and the Ford Motor Company.
“Take advantage of every opportunity the MBA affords you, but don’t assume that membership will automatically translate into contracts or opportunities,” said Hightowers
Petroleum Co. President & CEO, Steve Hightower. “What it does guarantee is that the
MBA is saying to other successful corporations that this company has our stamp of approval. They’re marketing and selling Hightowers Petroleum Co. while supplying us with
valuable business development services.”
Hightowers Petroleum Co. is unique as it is a third-generation, sizeable, African
American-owned company. It is built on a family business established in 1957 by Steve’s
father, Yudell. Today, while Steve spends an ever-increasing amount
of his time implementing high-level company strategies, including
expanding internationally, his son and Chief Operating Officer,
Stephen Hightower II, oversees day-to-day operations.
Stephen “Steve” Hightower,
President & CEO
•Founded 1984
•Admitted to MBA 2003
•Middletown; New York City; Lagos (Nigeria),
Cape Town (South Africa); Burlington (Ontario)
locations
•Grown employment from 6 to 38 since MBA
admission
•$339 million revenue in 2014
•3,290% revenue increase since MBA admission
Page 4 – 2014 MBA Annual Report
us to leverage a greater pool of
resources and talent.
~
d.e. Foxx & Associates, Inc. has grown from a single-building rehab to a corporation
with three brand groups: (1) a facility services group - Foxx Construction, Caxino, and
Xerve, (2) a manufacturing services brand - XLC Services, and (3) a sourcing and
supply chain management brand - Versatex.
“Our journey has not been without challenges. By staying closely connected to our
customers’ directional needs, we have been blessed to achieve consistent doubledigit growth,” said Dave Foxx, CEO. With assistance in strategic planning and business
development from the MBA, d.e. Foxx serves Fortune® 1,000 companies in the U.S.
and Canada.
“Insight is one of our keys to success and the MBA is an
excellent provider of fresh insight,” added Mr. Foxx.
“Our partnership with the MBA has allowed us to
leverage a greater pool of talented resources to
achieve continued progress.”
David Foxx, CEO
•Founded 1983
•Admitted to MBA 2004
•Based in Cincinnati, with multiple locations
across the USA
•Grown employment from 1,000 to
more than 1,500 since MBA
admission
•660% revenue increase since
MBA admission
In 2010, Global Novations was recognized for serving as an example of the results
of the MBA’s efforts to strengthen and expand the regional minority entrepreneurial
community. In 2012, Global Novations was acquired by Korn Ferry, the world’s largest
talent management company, recognizing the caliber of Global Novations operations,
employees and management. In 2014, four additional companies join the ranks of
Accelerator Emeritus based on their above average growth, operational performance,
and ability to be a value-added solution for their customers. In addition, the management teams of each of these firms are largely recognized for their leadership on boards
and financial commitments to our region’s social services, youth, arts and economic
justice organizations.
RCF Group
TriVersity Construction
}The MBA helped us create a business
blueprint.
~
}The MBA knows everything about us –
and that delivers more value to us.
~
When minority/majority partners, Carl Satterwhite and Scott Robertson formed RCF
Group, the two met with the MBA to develop a successful business blueprint.
“When it comes to the MBA,” offers TriVersity President & CEO Mel Gravely, “you get out
what you put in. The team at the Chamber has helped TriVersity with business development, strategic planning and financial analysis since the beginning.”
RCF Group provides workplace solutions (furniture/furnishings, architectural interiors,
facilities services) to a number of firms including Cincinnati Children’s Hospital Medical
Center, Great American Insurance and Procter & Gamble. In 2014, they expanded
their operation to include the Cleveland/Akron/Youngstown market.
“The MBA’s focus on minority economic development has been greatly beneficial to
RCF Group,” said Carl Satterwhite, RCF Group President and
Owner. “Achieving Accelerator Emeritus status has
allowed us to advocate for community philanthropic
endeavors and support the growth and development
of other minority businesses.”
Carl Satterwhite, President
•Founded 2003
•Admitted to MBA 2004
•West Chester; Cleveland locations
•Grown employment from 2 to 86
since MBA admission
•$64 million revenue in 2014
•498% revenue increase since
admission to MBA
They serve as mentors to other companies and are role models for the investments they
have made in themselves and their companies.
TriVersity has quickly become one of the top 10 largest commercial builders in the
region. Through TriVersity Craft Force, the construction company also self-performs
interiors trade work, and clients include Cincinnati Children’s Hospital Medical
Center, 3CDC, Procter & Gamble and Toyota.
“My advice to portfolio and pipeline firms? Disclose more
information to the MBA, not less,” added Mr. Gravely.
“They know everything about us—and that delivers
more value to us, and to our customers. Quite simply, a strong MBA relationship positioned us for
greater opportunities.”
Mel Gravely, President & CEO
•Founded 2005
•Admitted to MBA 2006
•Cincinnati; Indianapolis locations
•Grown employment from 7 to 70
since MBA admission
•$64 million revenue in 2014
•Average 20% annual revenue
growth since MBA admission
2014 MBA Annual Report – Page 5
Goal Setters
A strong, local economy with willing and committed buying organizations provides an environment for minority
firms to create strong relationships that enable them to
grow. The MBA works to identify new companies or organizations that are interested in diversifying their supply
chain and have a desire to support local businesses and
helps them establish the systems needed to be effective.
Once a goal setter, the MBA provides meaningful introductions to companies and resources that help the goal
setters find new suppliers and the incorporation of supplier diversity best practices.
The MBA’s work to create local demand for the products and services of minority
companies continues to drive real dollars to the top and bottom lines of local minority
companies across the region. Each year, approximately 40 companies set goals and
track spending with minority companies. For the second consecutive year, the goal setters’
minority spend topped $1 billion in 2014.
$1.4B
$1.2B
Goal Setter Growth
$1B
$800M
28
26
$600M
$400M
40
Annual Aggregate Goal Spend
Number of Goal Setters
474
$
36
31
1,040
$
1,088
$
771
$
30
20
594
$
10
$200M
$0
40
2010
2011
2012
2013
2014
0
In five years, the local buying market has increased by 120% and has created contract opportunities worth $4 billion for minority companies of all sizes in the region.
New Goal Setters for 2014
One of the largest distributors of fresh produce in the
United States, the Castellini Group of Companies are
committed to harnessing their extensive purchasing and
distribution power and leveraging the MBA to identify potential new, diverse suppliers for
all of its brands.
The request to become an MBA Goal Setter coincided
with their recognition of the role it could play in demonstrating to its partners, planners conventions and meeting attendees, the importance of providing real economic opportunities for local companies. The CVB launched its supplier diversity program in
late 2013. In 2014, the CVB sourced needs with more than 275 local minority-, women-owned and small businesses.
As a leader in the fight to end poverty and homelessness, City Gospel Mission understands first-hand
the connection between a strong local economy and
creating employment opportunities. Two minority companies, TriVersity Construction (Accelerator Emeritus) and Jostin Construction (MBA portfolio firm) partnered to build the new Queensgate facility. A projected 31% of spend will be
sourced with local minority- and women-owned firms.
Founded in 1968, Northern Kentucky University (NKU) is
a growing metropolitan university of more than 15,000
students served by more than 2,000 faculty and staff
on a thriving suburban campus near Cincinnati. NKU signaled to the Cincinnati USA region
its continued commitment to diversity with the creation of a new staff position to lead the
University’s inclusion efforts as it became an MBA goal setter.
The Port serves as a catalyst for neighborhood redevelopment by using its economic buying power
to purchase from companies that operate or employ individuals from neighborhoods which need
redevelopment. Its REACH (Rehab Across Cincinnati and Hamilton County) neighborhood
home rehabilitation program employs a variety of MBE and WBE specialty contractors, as
well as local social enterprises that give at-risk youth their first real work experience. REACH
employed 11 residents of the Evanston neighborhood.
Skanska USA is one of the largest construction and development
companies in the country with expertise in construction, civil infrastructure, public-private partnerships and commercial development initiatives. They embrace diversity and inclusion as part of their operational culture,
becoming industry leaders in diversity as they pursue every project with inclusion as standard practice.
2014 MBA Annual Report – Page 7
Providing Capital Access Solutions
The MBA provides best-in-class consulting services to
help each portfolio company set a course for abovePANTONE 144
FONT: Minion Regular
average financial performance. The MBA offers a wide
PANTONE 384
swath of services, including infrastructure evaluation,
PANTONE 646
opportunity analysis and capital access solutions. In
2014, the MBA worked with four of its portfolio firms to
help secure nearly $1 million in funding from banks in
the greater Cincinnati area. Additionally, the MBA underwrote four loans for a total of $575,000 through the L.
Ross Love GrowthBridge Fund.
L. Ross Love GrowthBridge Fund
Established in 2013, the L. Ross Love GrowthBridge
Fund for Minority Businesses memorializes the Cincinnati business executive, entrepreneur and civic leader. The
Fund seeks to connect investors and minority businesses to new growth opportunities by providing established,
highly competitive African-American and Hispanic-owned
firms with flexible financing to develop new products,
enter new markets or invest in acquisitions. Loan
recipients in 2014 were:
K-COR commercial rebar installer successfully launched
a bridge decking division to expand core competencies
in the rebar space in 2014. The GrowthBridge financing
accompanied the new division launch and advanced key
Fund objectives to create seven jobs, add $175,000 in
local payroll and make capital investment in 2014.
Page 6 – 2014 MBA Annual Report
OCG Telecom is a single source value-added reseller for
over 400,000 IT & Telecom products and services. The
GrowthBridge loan helped OCG increase its purchasing
capacity and ability to participate in larger, higher margin bid environments by better employing its capital and
vendor credit.
ABEL Enterprises, Inc., provides installation of commercial
grade security and fire alarm systems. ABEL’s key clients
include Kroger, Cincinnati Public Schools and the City of
Cincinnati. The GrowthBridge Fund loan was used to add
needed inventory equipment, and support the working
capital and tooling needs associated with training, developing and outfitting two new technicians hired in 2014.
Cog, LLC provides customized graphics production and
prototyping solutions specializing in consumer packaging
and in-store promotion and displays. Cog, LLC is a subsidiary of the Che International Group, LLC. GrowthBridge loan
proceeds were used to purchase industry-leading print
technology equipment and support the training of four
new employees.
New portfolio firms in 2014:
The MBA seeks growing African-American-owned and
Hispanic-owned firms with capacity to supply the world’s
largest and best firms. Firms are taken through a rigorous
evaluation process to determine their capabilities, growth
capacity, business model strength and management team
acumen. Additionally, the MBA looks for firms currently providing unique or value-added services that distinguish it
from competitors. In 2014, the MBA welcomed three firms
into the portfolio:
ATMOS360 started 25
years ago and is recognized
globally as a dust control
technology leader particularly in the area of containment as the source that delivers innovation and cost competitiveness to its customers.
ATMOS360’s dust control technology provides cleaner, safer and healthier processes to industrial, commercial and
institutional product markets.
Business Technical Services (BTS) is an infrastructure support company specializing in pipeline
integrity
management.
BTS provides comprehensive services in the areas of:
pipeline surveys, high-consequence area surveys, industrial coating applications, pipeline maintenance and
repair, vegetation management, atmospheric corrosion
surveys related to bridge pipeline crossings, and above/
below-ground storage tank repair.
K-COR is a subcontractor specializing in self-performing the
installation of reinforcing steel,
post-tensioning
cables
and
mesh for hotels, convention centers, hospitals, parking
garages, waste treatment plants, sports stadiums and
other commercial projects. K-COR is committed to being an
innovative, competitive certified minority business enterprise that provides turn-key furnish and install reinforcing
steel solutions.
MBA PORTFOLIO FIRMS
ATMOS360
Abel Building Systems
Apex Environmental Services
Aunty’s Homemade Food
Best Upon Request
Business Technical Services
Che International Group
Coolant Control
Diversified Facility Solutions
Diversitech
DNK Architects
Environmental & Safety Solutions
GT Industrial Supply
Hi-Mark Construction
Jostin Construction
K-COR
Kanu Investments
Megen Construction
Muñoz Brandz
OCG Telecom
Pathfinder/MPI Management Consultants
Pep
Quality Associates
SFA Architects
Smart IT Staffing
TechSoft Systems
Trio Enterprises
Vivian Llambi & Associates
World Pac Paper
*GrowthBridge Investor
†MBA Operating Supporter
MBA GOAL SETTERS
Al. Neyer
American Red Cross
ArtsWave
Castellini Group of Companies*†
Children’s Hospital Medical Center*
Cincinnati Bell*†
Cincinnati Center City Development Corporation (3CDC)
Cincinnati Reds
Cincinnati State Community & Technical College
Cincinnati USA Convention & Visitors Bureau
Cincinnati USA Regional Chamber*†
Cintas Corporation
City Gospel Mission
Dinsmore & Shohl
Duke Energy
Ethicon Endo-Surgery
Fidelity Investments
Fifth Third Bank
Macy’s Inc.†
Mercy Health*
Messer Construction Co.*†
Metro
Miami University
Northern Kentucky University
PNC Bank
Port of Greater Cincinnati Development Authority
Procter & Gamble
Skanska USA
The Christ Hospital*
The Kroger Co.*†
Toyota Motor Engineering & Manufacturing, NA*†
Turner Construction Co.*
U.S. Bank*†
United Way of Greater Cincinnati*
University of Cincinnati*
University of Cincinnati Medical Center
Uptown Consortium
Urban League of Greater Cincinnati
Viox Services
Xavier University
ACCELERATOR EMERITUS FIRMS
d.e. Foxx & Associates
Global Novations
Hightowers Petroleum Co.
RCF Group*
TriVersity Construction Company*†
3 East Fourth Street
Cincinnati, OH 45202
Phone: 513-579-3111
Fax: 513-579-3101
www.minoritybusinessaccelerator.com