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Business

The Interview: Robert L. Wallace on minority entrepreneurs

Robert L. Wallace, CEO of Baltimore-based Bithgroup Technologies, has spent more than two decades building a minority-owned business into a multimillion-dollar success and writing and lecturing about entrepreneurship.

The Cherry Hill-born mechanical engineer recently was tapped to head a new, 25-member advisory council created by Mayor Stephanie Rawlings-Blake to help improve the city's minority- and women-owned business enterprise program.

Wallace, who attended city public schools and earned an MBA from Dartmouth College, worked for DuPont and IBM in Baltimore in the 1980s before starting his company, which is now located in Mount Vernon.

Bithgroup, an information technology consulting company with a division, Bithenergy, that designs and builds renewable energy projects, got its first big contract in the late 1990s as a Y2K consultant for Baltimore City under then-Mayor Kurt L. Schmoke.

Last week, Wallace spoke with The Baltimore Sun about challenges faced by minority- and women-owned businesses.

What are some of the biggest challenges today for minority- and women-owned businesses?

There are a couple of challenges. One is the uncertainty of the market right now. It may be the case for all entrepreneurs, but it's more true for women- and minority-owned businesses that come into the market with not as strong a position.

The other is capitalization, and coming into a market where they may not be as well-capitalized. If you are a consultant, you can manage your costs, but when you get into building projects, those are more capital-intensive-type deals. The third area is access to markets. People who buy stuff build up … contacts that may not be tied to gender [or race] but are in [their] circle of friends. … Because of that human reality, women- and minority-owned [businesses] may not [receive contracts to provide goods and services because their owners are not known entities]. I've seen it in research and anecdotally.

What are some examples you've seen and found in your research?

[Regarding] capitalization, an entrepreneur's first level of funding is his own personal assets. In my case, I took all my savings and used credit cards and a second mortgage. Economically, the minority community lags behind [the population as a whole], and women lag behind. If you are relying on personal wealth, it's going to be limited. When you go to banks as a minority business, you have to be almost perfect. If the decision-maker is uncomfortable with you as a woman or person of color or from the wrong side of town, these are realities we face.

What types of challenges have you faced running a minority-owned business and how have you overcome those challenges?

One is the thinking about the business. What we think is what we become. If I think I'm a small business, I'll be a small business. If I think I'm a global business, I'll be global. We're a small business, but we think globally and have been getting traction in foreign markets.

The second is the challenge of attracting and retaining talented people. … In IT, we compete with IBM, Northrop Grumman, Lockheed. We compete to attract talented engineers and scientists, and it's sometimes difficult. [To compete] we have created our own pipeline of talent [through a summer internship program for high school students and engineering students in partnership with Northrop Grumman]. It's less of a challenge once they've been here with us.

And access to markets — when I go in to sell my goods or services, if a buyer has misconceptions or biases … I've got to deal with those biases before I can get into selling. … If there isn't comfort, it creates a drag on the company. … You can get worn down and worn out before you get to any business.

How much progress has been made in opening doors for minority businesses?

It depends on the state. … All we ask is a fair shot, and if you can't compete, so be it. There are some states that just don't get it. The leadership doesn't get it.

The state of Maryland is such a progressive state when it comes to diversity of business and suppliers. We have leadership that understands if we don't provide an environment where these men and women can be successful, our entire society will be impacted. My premise is until you fix the economy, the ability to impact other areas [such as reducing crime and poverty] will be diminished.

As chairman of the new Mayor's Council on Minority- and Women-Owned Business Enterprises, what is your vision of the future for minority businesses in Baltimore?

Why can't Baltimore City be the mecca of new business startups and of entrepreneurial activity and be a hotbed for economic activity? Why can't we be Silicon Valley? When young entrepreneurs graduate, why can't they say, "I want to come to Baltimore to start my business"?

Will there always be a need for minority business enterprise programs?

I don't believe so. As the gap closes, as the environment becomes more conducive to encouraging anyone who wants to work hard and has passion … these types of programs will not be necessary. … Are we there yet? Nope. We've made progress but are not there yet.

lorraine.mirabella@baltsun.com

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