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May 25th, 2010 - Phil G. Busey

Small business can be big business for state

Oklahoma should use network of suppliers to establish and develop support and sales for larger companies out of state.

busey_5-29x6-17cmPhil G. Busey.
Phil G. Busey
Chairman & CEO
The Busey Group of Companies

Small business is the foundation of Oklahoma's economy. Promoting small business is vital to our future. Small businesses are "big" business in their own right, and notably, Oklahoma is home to a number of large corporations - many are Fortune 500 companies that began as small concerns.

The oil and gas industry has fueled an impressive growth of petroleum and natural gas companies, including the likes of ConocoPhillips, Kerr-McGee and, more recently, Chesapeake and Devon. These companies are now recognized as an integral part of our economy. These companies emerged from an entrepreneurial spirit and founders' vision that is at the heart of every small business owner's dream.

Chesapeake Energy Corp. began in 1989 with 10 employees and $50,000 in capital. With Aubrey McClendon's leadership, it is now the second-largest natural gas producer in the nation. Devon Energy Corp., founded in 1971 by John Nichols and his son Larry, today employs more than 5,500 and is one of the largest independent oil and gas exploration and production companies. Significantly, both companies also practice strong social responsibility.

When McClendon and the Nicholses founded their respective companies, their first goal was probably survival, and they could not anticipate their businesses growing far beyond their wildest expectations. Yet this is the soul of entrepreneurialism. Starting - let alone operating - a small business is risky; hard work and challenges abound. Yet in Oklahoma, more than 99% of business enterprises are small. More than 50% of all jobs are created by small businesses.

In the global marketplace, states are expending large sums trying to lure larger businesses to relocate. However, as a smaller state with a significant base of small businesses, we can use our network of suppliers to establish and develop support and sales for larger companies out of state. For example, Tinker AFB is one of three Material Command Centers for the USAF. With a budget of more than $5.2 billion, 70% goes out of the state for engines, parts and services. By actively linking small business suppliers to these aerospace giants, Oklahoma could capture more of this funding for our own economy and job creation.  

Oklahoma being competitive in this economy depends on building upon our strengths. Small businesses need a voice. Economic development must not just rest on attracting larger companies to (re?)locate. It must also be about growing the ones here, large and small. Building the network of great, small Oklahoma-based suppliers can offer supply solutions to larger companies creating jobs and bringing needed revenues from out of state.

Small businesses need links to other companies, market identification, insurance, banking services, business experience and resources to succeed. They need to capitalize on their small and minority certification advantages, as well. Oklahoma, as part of its focus on commerce, can take responsibility to help this part of our economy grow and thrive.

By being proactive, state government can assist in recognizing and promoting the significance of incentives for small, woman-owned, veteran and minority businesses. These incentives and advantages are mostly offered by the federal government and private sector to encourage use of small businesses.

Oklahoma must beef up its small business focus and own contracting programs, as well. Offering the resources and expertise for business development, strategic counseling and consulting on available incentives can be unique. For example, in government contracting, at least 20% of all dollars spent are set aside for small businesses. This is a mandate. Companies such as Boeing, Lockheed and others have strong small business groups seeking qualified small vendors. In commercial contracting, all Fortune 1000 companies are core members of the National Minority Supplier Development Council, represented by the OMSDC in Oklahoma. Minority small businesses that certify have a path to acceptance in these corporations' vendor base. In 2005 alone, the Fortune 1000 spent more than $95 billion with NMSDC-certified companies.

Small and minority companies have the opportunity to bid on specific government contracts or subcontract to larger companies. Many contracts are out of state, but revenues mean jobs and tax dollars for Oklahomans. Advantageous certifications include socially disadvantaged business, woman-owned, SBA 8(a), veteran or service-disabled veteran or hubzone. The DOD offers a federal incentive for prime contractors to use a Native American-owned business equal to a 5% cash rebate calculated on the subcontract.

Oklahoma small businesses, marketed and supported with resources, can together be a force for economic growth. Some of these small businesses may grow to become large. It is time to showcase our small businesses and help them realize their dream. Oklahoma's industry giants started with little more than a vision.

Support small business. It means big business for our economic future.
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