Minority-owned businesses grow in Minnesota
Minnesota State Roundup
Published January 1, 1994 | January 1994 issue
Ethnic minority-owned businesses are finding more room and resources in Minnesota's marketplace, in part due to the Metropolitan Economic Development Association (MEDA).
When MEDA was formed in 1971, "conditions were not ripe for minority businesses and capital was sparse," says Warren McLean, MEDA president. Most businesses were single-family operations without resources for expansion. By 1992, in just one year MEDA-assisted businesses created 224 new jobs and paid over $1.5 million in taxes.
Area business leaders created MEDA in response to a series of riots in North Minneapolis to bring minorities into mainstream business by providing technical and management assistance. Consultants at MEDA design a variety of training programs for clients, including administration, marketing, finance and accounting.
MEDA and its related programs receive strong support from the business community, a central reason for the organization's success, McLean says. Volunteers contributed 2,167 hours in 1992, equivalent to two full-time staff positions.
About 100 CEOs and other corporate officers participate in MEDA's mentor program that matches clients with area executives. Joe Kingman, former president of American National Bank in St. Paul, volunteers as a mentor for Dick Martin of Martin Communications in Roseville. They have met every six weeks for the past 10 years to discuss business in the Twin Cities. "He provides insight into how business works," says Martin, while maintaining "a hands-off approach."
While MEDA provides training, the Milestone Growth Fund offers venture capital for ethnic minority business owners. Milestone began in 1990 with $2.1 million in private sector donations. Milestone president Esperanza Guerrero-Anderson says this could eventually translate into a $10 million fund since the US Small Business Administration matches $4 in loans and investments for every $1 of private funds invested by a licensed venture capital firm.
Milestone has investments with 13 minority-owned companies in various industries, including the food, construction, hotel and medical fields. All investments are made with flexible terms and a commitment to help during slow business cycles. "As a long-term partner, we expect rocky times," Guerrero-Anderson says.
MEDA and Milestone help minority businesses create wealth, a key to solving problems in minority neighborhoods. "When we have the money, we can decide the social agenda," Guerrero-Anderson says.