Fred Anderson of Leajak Construction

The University of Washington is helping local communities grow by boosting the bottom line of small neighborhood businesses.

As MBA students in the University of Washington Business School, Michael Verchot (’95) and classmate Paul Pressley (’95) launched a study intended to address the economic challenges facing small businesses in economically distressed inner city communities. Little did they know they were embarking on an effort that would bring about remarkable results for hundreds of small businesses in Washington state. Their timing was impeccable. The mid-1990s found Seattle civic leaders and business professionals seeking ways to revitalize area inner-city communities and community leaders from inner city Seattle neighborhoods looking for assistance in reviving economies.

UW helping minority-owned businesses to thrive
Verchot and Pressley’s study evolved into a bona fide program within the UW Business School, the Business and Economic Development Center (BEDC, formerly the Business and Economic Development Program), that since 1995 has linked UW business students, faculty and industry mentors with small minority-owned businesses to ensure their continued growth and success. Founded and sustained through a partnership between community-based organizations, corporations, professional associations, small business owners, elected officials, and the UW Business School, the BEDC is guided in its work by an advisory board composed of leaders from these organizations and is funded exclusively by contributions from individuals, corporations, and foundations.

To date, more than 600 graduate and undergraduate students involved in the program have assisted 250 small companies in Seattle ’s Central District, Rainier Valley , Chinatown and the International District, White Center , South Park and Beacon Hill communities and in the lower Yakima Valley in Central Washington . Providing business consultation in areas such as accounting, financial management, marketing, and technology management, the program, under Verchot’s direction, has enabled the creation of 500 new jobs and the generation of more than $20 million in revenue while giving UW business students an invaluable education in the realities facing small businesses in today’s economic climate.

Under the leadership of founding Faculty Director Thaddeus Spratlen, the Center has developed a curriculum that is being replicated throughout the Northwest, enabling other schools to support minority business growth in their communities. Additional program components include a series of Minority CEO seminars, in which Business School faculty and business leaders share business strategies with CEOs of the state’s largest and fastest growing minority-owned businesses; and the program’s Minority Business of the Year Awards, which recognize outstanding minority-owned businesses and raise funds for diversity scholarships for UW business students. The BEDC also collaborates with the Colville Tribal Enterprise Corporation and the Confederated Tribes of the Colville Reservation in Eastern Washington , supporting and promoting the economic growth of the tribes' industries through executive education and leadership courses.

Need for mentoring more critical than ever
Recently, the program has added a strong research component to its field work and consulting services. Business School Dean Jim Jiambalvo, speaking at the School’s annual UW Minority Business of the Year Awards Celebration last fall, heralded the expansion of the program into a full-fledged center for economic development. “The establishment of the Business and Economic Development Center will supercharge our efforts to improve the business practices of companies in economically distressed communities and those owned by people of color,” he said.

Today, the need for such assistance and mentoring is more critical than ever before. In his latest research report, "The State of Minority-Owned Businesses in Washington," William Bradford, the program’s Endowed Professor of Business and Economic Development, maintains that the number of businesses owned by people of color has increased significantly during the last 10 years and that during that period people of color started businesses at a faster rate than the state as a whole. Between 1992 and 2002 the number of minority-owned businesses in the state grew 92 percent. Bradford expects the number of minority-owned businesses in Washington to continue to grow in the coming decade. But he cautions that if these businesses cannot move to closer parity with businesses as a whole in Washington , the state will face higher unemployment rates for all residents, state business and occupation tax revenues will be constrained, and family wealth among the state's fastest growing population segments will lag, thus stunting the local economy.

When small businesses flourish, everybody benefits
According to BEDC research, the success of small minority-owned businesses throughout the state is critical to a healthy economy. Small businesses in the United States contribute half of the jobs in America and create jobs at a much lower cost of capital than large enterprises. When small businesses flourish, everybody benefits, an assertion that sits well with student Norrey Le'Ah Acasio, who worked with the Center last winter. “I come from a background of small businesses,” she says. “My parents are self-employed. They also previously owned a small business. All of my past part time jobs were in small businesses.” And small businesses, she says, will most certainly figure into her future. “I don’t want to be in the corporate world, I want to be working with small businesses,” she concludes. “I believe small businesses embody the true American dream.”

BEDC is good for business

Fred Anderson knows firsthand the challenges facing small business owners in today’s economic climate. Founder and owner of Leajak Construction in Mountlake Terrace , Anderson has been doing business in the Seattle area for more than 15 years, long enough to have endured the ups and downs of a volatile economy and the fallout of I-200. Prior to the 1998 passage of the legislation, which outlawed consideration of race and gender in government hiring, contract awards and student admissions in Washington state, Anderson, who is African American, relied heavily on government contracts that gave minority- and women-owned businesses an opportunity to compete on a level-playing field with larger, more established companies to land construction contracts throughout the Puget Sound region.

The aftermath of I-200 found him fighting to keep his business afloat in an economy challenging enough for small business owners and even more so for those owned by people of color. “It’s a devastating thing for this whole state,” he says. “It’s an unfortunate thing, but we have to find ways to do business; we have to find ways to get involved in this economic climate.”

Today, Anderson is still adapting to the changes wrought by the legislation, but he is finding new reasons to feel optimistic about the future, thanks to his involvement with the Business and Economic Development Center (BEDC) in the University of Washington Business School, a program that enables UW students and faculty to provide a means of transition, survival and success for minority-owned businesses in Washington state. The BEDC has helped Leajak through an intensive six-month Business Assistance Program. The assistance began with pro bono legal advising (through the King County Bar Association) and risk management advising through Safeco. Then, over a ten-week period, a team of four-students, guided by faculty and construction industry mentors, worked with Anderson to provide him with new insight into current entrepreneurial practices, innovative thinking and other strategies, as well as affirmation of the best ways to help his company grow to the next level of success. During the final 10 weeks, Anderson will continue to work with his Business School Alumni Advisors and mentors from the Seattle Rotary Club to fully implement the work of the BEDC’s students.

“They helped me to analyze how I spend my time on a day-to-day basis and what is effective in terms of the marketing and sales side of what I’m doing as an owner of my business,” Anderson says of the student team. “They made recommendations on how I should be spending my time. They did some forecasting of sales based on my current work. And they helped me look at the market in terms of where the opportunities are coming from. A lot of this stuff I knew already, but they helped me to understand how to better prioritize my time and better focus on particular markets. And they helped me set up my website. I really appreciate the time they spent doing that.”

BEDC is good for students
In turn, the students involved in the project also benefited. Junior Norrey Le'Ah Acasio found the opportunity to provide consulting services to Leajak Construction not only a rewarding way to serve the community, but also an eye-opening introduction to the realities of doing business. Though she initially enrolled in the program as a means of fulfilling a graduation requirement, Acasio says her participation proved to be one of the most valuable experiences of her UW education. In addition to helping Anderson with business development, the hands-on teamwork gave her a taste of what business is like in the real world. “The biggest thing I learned was how to approach real-time, real-world problems,” she says. “It let me get my hands on what people really do. In the group, we pulled all of our strengths together in making our business plan. It showed me that there’s room for all of those strengths on a team.”

Team member Alex Hopwood agrees. “I think the most important thing I’ve learned has been the value of teamwork,” says the senior, who is completing a degree in business with an emphasis in entrepreneurship and marketing. “I don’t think I have ever had to rely so much on other group members.”

The opportunity to apply their classroom learning to a real business situation yielded many new insights. All in all, both students found the program provided a valuable dose of reality. “If you want real hands-on experience, this is the class to take, and it doesn’t matter what major you’re in,” Acasio says. “This could help anybody.”

As for Anderson , he plans to follow the advice of BEDC students and faculty and seek out smaller, private clients as well as continuing in his efforts to land larger public projects. He’s already purchased the customer management software the students recommended as a means to remain in closer contact with past and future clients, and is taking to heart the recommendations regarding organization and marketing.

Anderson hopes the measures he’s taken will help him to flourish, tomorrow and beyond. “This is my state,” he says. “I live here and we (minority-owned businesses) want to share in the economic opportunities that are in this state.”

More about BEDC

Support This Work ...

Return to Civic & Culture or Economy