HISPANIC PROFILE: Toledo contractor Gary Johnson and 2014 Inner City 100
By Kevin Milliken, La Prensa Correspondent
Gary Johnson is a living testament to what can happen to a small minority contractor who tries to aggressively grow his business-- and seeks help from mentors along the way. His story is almost a how-to guide for small minority businesses looking to gain a foothold in Toledo.
The mayor’s office released its quarterly Affirmative Action/Contract Compliance report and exceeded the city’s inclusion goals so far in 2014. Through September, Toledo city officials allocated $131.9 million worth of construction contracts-- with $28.9 million going to MBE’s (minority-owned business enterprises) for a rate of 21.8 percent. The city’s goal is 15 percent.
During the first nine months of 2014, Toledo city government spent more than $27.6 million on goods and services. Over $5.2 million of that contract total went to MBE's, or 18.9 percent. The city's inclusion goal is 10 percent.
All city contracts more than $10,000 are reviewed by city officials and evaluated for MBE numbers. MBE contractors and suppliers must register with the city and be certified.
Within those numbers are Latino-owned small businesses trying to grow and prosper, many relying on inclusion programs to obtain work with government agencies or link up as suppliers or subcontractors with larger companies.
Johnson’s flooring and painting company recently won a national award for its growth over a five-year span into a multi-million subcontractor now able to handle larger projects.
“There are opportunities. You have to be willing to put a lot of time in and don't take for granted that because you're a minority contractor or that there's some other type of opportunity that's bestowed you that it's going to automatically lead to repeat business,” Johnson said. “You have to be willing to deliver and that takes a lot of hard work. It takes putting out quality product and it takes putting out quality service.”
The Initiative for a Competitive Inner City (ICIC) named American Floors and Interiors (AFI) to the 2014 Inner City 100, a list of the fastest-growing inner city businesses in the U.S.
ICIC was developed at Harvard University as a way to track inner-city businesses to see what kind of impact they're having in the cities where they are located. In order to qualify for an award, a business has to have done at least one million dollars of revenue in a given year.
“Our company was able to qualify, and once we made the list, we didn’t know where we were going to end up until the night of the competition in Boston,” said Johnson, who attended the awards ceremony. “We found out we came in number one in construction and eleventh overall. We were competing against some companies in Washington, D.C., Chicago, and Virginia.”
Over the past five years, AFI grew from a company that did $350,000 in business to one that totaled more than $3.8 million in receipts in 2013. Johnson projects the company will top $5 million worth of business before the end of this year. That’s a growth rate topping 500 percent.
“I was pretty excited about it for several reasons. Number one, it was nice to know our company was competing in a growth rate that was commensurate with larger companies all across the country,” said Johnson. “Secondly, it’s because of the impact we feel our company has had in the inner city. A lot of times, a company in the inner city will hire other people who live in the inner city, giving opportunities to people that may not get those opportunities.”
ICIC defines an inner city as an economically-distressed urban area that has a poverty rate of 20 percent or higher. Toledo’s rate shows one of four families living at or below poverty.
“So I’m proud to be a business that’s decided to locate in the inner city. I’m committed to the inner city and I like the idea that I’m helping people that may not get the chance to get that help,” said Johnson.
But AFI’s owner is the first to admit “he got a lot of help along the way” from the Business Assistance Center with the state of Ohio, Minority Business Development Program at the University of Toledo, Small Business Administration, and SCORE, a volunteer group of retired business executives. He also got involved in a mentorship program with Rudolph-Libbe.
“There are a lot of organizations out there, people willing to help you,” he said. “There’s just a variety of things you can do to get the help, but you have to be willing to get the help and show what you're willing to do to apply that help.”
He openly admitted AFI lost money its first three years, but Johnson spent a lot of time trying to grow his business by networking and attending education seminars. One such course taught him how to grow a small business that was sponsored by Goldman Sachs. That same group, the 10k Small Business Program, nominated Johnson for the award.
“They taught me that financing is not as huge a problem as a lot of businesses think that it is,” he said. “It’s knowing how to ask for the money and what type of presentation to put together that will give people the confidence that you can deliver.”
ICIC also sponsored a two-day small business symposium for award winners designed exclusively for urban firms. The seminar featured business management case studies presented by Harvard Business School professors and the CEOs of fast-growing firms.
But survival was the watchword in those early years, because Johnson started his company just before a devastating recession hit, costing many small business owners their dream.
“If it wasn't for the DBE program or the MBE program or the EDGE program, especially in 2008 when everyone else's businesses were turning in a negative direction, ours was continuing to double every year and it was because of a lot of those programs and the fact that the federal government and the state were spending money in order to keep the economy afloat,” said Johnson, whose first big contract came from UT.
“That led to a $260,000 contract with Rudolph-Libbe at the university and "it started to take off from there,” said Johnson.
“Once we started working out there and everybody saw our capability of delivering, we started getting a lot more opportunities-- and not all of them were because we were a minority company,” he explained. “But being a minority company did help.”
Johnson’s company still serves as a subcontractor for larger local construction companies such as Rudolph-Libbe, Midwest Construction, and Turner Construction. AFI also became certified to work as a minority contractor with the Lucas County Metropolitan Housing Authority (LMHA).
“It was when we got our first big contract at the University of Toledo that we started to get some recognition and things started to turn around. We basically became a time and material contractor with the university,” Johnson recalled.
Johnson now sits on the President's Council on Diversity and a construction committee that monitors inclusion, both at the University of Toledo.
“That’s something I’m extremely passionate about,” said Johnson of inclusion. “It has been something that has served me well and I feel I'm giving back. That’s the important thing. It’s one thing to get certified as a minority contractor and get a few opportunities as a minority contractor, but what do you do to back to make sure others get that same opportunity.”
While Johnson’s family makes its home in Sylvania Township, he already has secured an apartment in the central city, in order to meet a residency requirement with the intent of running for Toledo City Council next year. A lifelong Rotarian, Johnson also serves on the Toledo Zoo Foundation Board and as an auxiliary Lucas County sheriff's deputy.