AskRecy has received numerous emails regarding the recent Hewlett-Packard proposed merger/acquisition of Compaq Computer. I was a little surprised that so many minority business owners and others had apparent concern about this potential merger blockbuster. Hewlett-Packard and Compaq Computer agreed to combine their resources, thus creating what the two merging companies hope to become an $87 billion global technology leader. The value of this acquisition on announcement day, Wednesday, September 5th was $25 billion. Less than five days later, on Monday, September 10th, the value of the acquisition had plunged from $25 billion to less than $20 billion. Since then, the value of the deal has fallen to about $17 billion due to a drop in Hewlett-Packard's stock price and from critics among stock analysts and leaders in the technology field.

Ms. Carly Fiorina, Chairman and Chief Executive Officer of HP, will become Chairman and CEO of the new HP. Mr. Michael Capellas, Chairman and Chief Executive Officer of Compaq, will be President. Capellas and four other members of Compaq's current Board of Directors will join HP's Board.

Hewlett-Packard Co. chief executive Carly Fiorina was reported to be surprised that critics of her company's blockbuster acquisition of Compaq Computer had misunderstood the potential of the deal. Speaking to investors at a Fall Technology conference in Boston, Fiorina reportedly said the deal should not have surprised Wall Street, given increasing demands for more products and services from computer companies.

Ms. Fiorina is said to have a reputation and is thought of as a "big picture" person, while Capellas is known for his diplomacy, execution and deliberation.

According to reported news reports, Capellas in a recent speech had outlined two major reasons for the merger. One was that Compaq had significant gaps in their portfolio, i.e., the Unix market, and two, a data center, that makes it difficult for them to be truly recognized as a major player in the enterprise. Hewlett Packett is No. 2 in the Unix market and an acknowledged leader in the data center. Mr. Capellas also was reported to say, "We are missing a leading set of open application integration tools to support interoperability. HP's OpenView software suite is an industry leader for Internet-based systems and network management interoperability. That is a vital part of our ability to integrate solutions across the enterprise. By merging with HP we are closing those gaps."

Ms. Fiorina is reported to have said, in one of her many discussions regarding the proposed Compaq acquisition, "This week's announcement is about catalyzing change across the industry." Fiorina also told a conference on United States-Japan relations. "Those who say it is about combining forces to salvage two PC businesses, or it is only about creating scale to cut costs, are missing the point. They're looking backward in the rearview mirror."

From the response of AskRecy's readers, the question is who is really looking into the rearview mirror. There is concern on whether minority businesses will benefit from this acquisition and other mergers that have occurred recently. During the past several years, some large corporations have reached their federal targets for contracting business to minority companies. Others are eager to be good corporate citizens and are encouraging the growth and development of minority suppliers, particularly in the area of manufacturing. A few corporations, like Procter & Gamble Co. and Frito-Lay Co, have promoted joint ventures and have helped a couple of minority-owned companies buy a plant from a non-minority supplier.

However, according to a recent survey, minority-owned companies control just 12% of the nation's businesses, even though all minorities together represent 28% of the U.S. population.

Before the HP & Compaq announcement, in July 2001 - Compaq Computer announced two initiatives that reinforced its commitment to diversity within its reseller and partner base in North America. The Compaq Business Partner Program for Diversity Partners is now open to minority-owned technology companies that sell to the education and commercial marketplace as well as the federal, state, and local government. In addition, Compaq created its first Diversity Partner Advisory Council to strengthen its business practices with minority-owned firms.

Although, Compaq prides itself on the diversity announcement, it remains to be seen if the commitment becomes a reality, or if it will fall victim to reductions in personnel and costs that will surely occur and happen with many mergers and acquisition.

More information about becoming a member of the Compaq Business Partner Program for Diversity Partners is available at http://www.compaq.com/resellers.

Is diversity important to HP? If you go to HP's website and search under "diversity," there is a simple statement that says that HP has a long history of valuing diversity and their goal is to make sure diversity is "woven " into the fabric of their company day to day processes and business practices. "Woven," is a good word to use, it sounds good, and feel good, but actual substance and reality is what minority businesses want.

Many corporations, still today, say it is difficult to find minority suppliers big enough to handle their contracts. Many corporations still do window dressing, in the form of new positions and the recent wave of diversity managers. The problem is that the vast majority of diversity managers simply do not have the authority to work in the big picture. On the other hand, there are a few diversity managers that have been unleashed and carry a big stick with the company's support.

To those emails and minority businesses that asked the question, what affect the merger of HP and Compaq will have on minority businesses.

AskRecy's response is to don't wait to find out, put yourself and your business in a position to provide the needed service and start knocking on their doors, not once, nor twice, but numerous times until you get noticed. In addition, my response to those skeptics that say, it's difficult to find minority businesses and suppliers big enough to handle the large contract, direct those to minority suppliers offering the same services, and maybe they can "merge" to compete for the services.

*TDM is a trademark of S&W Innovative Solutions, Inc.

AskRecy response:

If you really believe and have high ambitions of achieving sales of over $100,000,000 in three years and are experiencing the marketing difficulty as outlined, then perhaps you should try an angel. Seriously!

There are select venture capital firms that are willing to provide the necessary jump-start capital. To get an idea of such firms go to "www.garage.com." There is a key and important factor, entrepreneurs, especially start-ups to remember about venture capital firms - although the name is sometimes misleading.

Venture capital implies willingness for someone to take on the profit and loss risks of young companies. Some of these companies have ventured away from funding start-up companies and have offered funding opportunities towards more established businesses. So be careful, instead of having a venture capitalist as a partner, you may attract the attention of "vulture capitalists."

However, there are still some quality Venture capital firms willing to take a chance on good market opportunities. There is book called The Gold Book of Venture Capital Firms. It is a directory of venture capital firms in the United States. Entrepreneurs seeking capital can find contact information, a short description, and a sampling of portfolio companies in the particular area of business entry. It also has four comprehensive indexes to help start-up business entrepreneurs to focus in the right venture capital firm, including key principals, industry sector, stages of financing, and the name of the venture capital firm.

There is also a Venture Capital Resource Library located at www.vFinance.com. The Wall St. Journal, Entrepreneur, and Inc. Magazine all recommended this site for anyone in the private funding arena. However this site charge less than $1 each day, and claims to enhance your deal and direct vast audiences of capital-seekers from around the world to your website and also to check each application carefully and accept ONLY accredited, highly professional and recognized firms. If approved, your firm will be entered into our VSearch database search engine which will provide entrepreneurs with immediate access to your firm's investment parameters and its website.

Good Luck!

Subject: SBA 8A Program

From: Fred Martin

I am very much interested in opening a computer service company in San Antonio, TX. I understand that the SBA (Small Business Administration) has a program called 8A. I am scheduled to go to a briefing next week with them.

Could you give me any insight about this program? Also is there someone you may know that can assist me in filling out paperwork required. When I speak of assistance, I mean helping me understand what information, I need to provide.

AskRecy Response:

The SBA's 8(a) BD Program, named for a section of the Small Business Act, is generally known as a business development initiative that helps socially and economically disadvantaged American citizens to gain access to the economic mainstream. As part of the business development program for the 8(a) firms, SBA helps small disadvantage businesses compete for Federal contracts. As required by law, the SBA must function as an intermediary for 8(a) contracts, but can delegate its authority through special agreements.

The first step in seeking an 8(a) certification is to contact the local SBA district office serving your area. An SBA representative can answer general questions over the telephone. Some district offices may also have 8(a) orientation workshops to provide additional information regarding the eligibility requirements and to review various SBA forms.

The basic requirements an 8(a) applicant firm (a) must be a small business; (b) must be unconditionally owned and controlled by one or more socially and economically disadvantaged individuals who are of good character and citizens of the United States; and (c) must demonstrate potential for success.

SBA defines a small business as one that is independently owned and operated and is not dominant in its field. Depending on the industry, size standard eligibility is based on the average number of employees for the preceding 12-months or on sales volume averaged over a three-year period. However, you should contact your local SBA office for the latest and up to date requirements

SBA defines socially disadvantaged individuals as those who have been subjected to racial or ethnic prejudice or cultural bias because of their identities as members of groups without regard to their individual qualities. The social disadvantage must stem from circumstances beyond their control. In the absence of evidence to the contrary, the following individuals are presumed to be socially disadvantaged: Black Americans; Hispanic Americans; Native Americans (American Indians, and other minorities. Again, contact the local SBA for complete guidelines.

Another important standard use for Section 8(a) is that economically disadvantaged individuals are socially disadvantaged individuals whose abilities to compete in the free enterprise system have been impaired due to diminished capital and credit opportunities.

The SBA have a minimum length of time in business requirement and the applicant firm must have been operational for at least two full years, however, the firm may obtain a waiver of the two years in certain situations.

Subject: Regarding free grant monies.

From: B.Smith.

I am a white woman who wants to start a chartering service (fishing) on the bay at Bolivar, Texas. I already have customers lined up for what I am providing and have promises for business to encompass the next year.

I recently moved to this area and have no collateral. I would need approximately 50,000.00 to get my business completely operating.

Where do I go and what do I do?

AskRecy response:

Free grant monies to start a fishing chartering service. I do not think so. This is a very broad question and it is not as simple as that. There are funding sources available to women, present and future business owners. It depends on several factors - the type of business, even the type of funding, the experience, and working knowledge of the business. For starters and with little to work on trying the following organizations:

The SBA Women's Pre-qualification Loan Program that exist in some states. These pre-qualified organizations works with Women Entrepreneurs and is dedicated to expanding economic opportunities for women by advancing entrepreneurship and providing resources to assist in successful business start-ups, maintenance of growth, and exploration of new business opportunities. One such program is Columbia College Center for Women Entrepreneurs. For more information, call at (803) 786-3582. Also, try calling your local SBA. Although, they typically worked with existing business, SBA have been known to finance start-up business with a well prepared business plan that shows potential and demonstrates the business ability to repay the loan. Some banks with the SBA backing, may take a chance with new businesses. Also, these banks may need to improve their Community Reinvestment Resource (CRR) with minority businesses.

Another program is the Women's Business Ownership Assistance and they exist to fund nonprofit economic development organizations to assist, through training and counseling, small business concerns owned and controlled by women, and to remove, in so far as possible, the discriminatory barriers that are encountered by women in accessing capital and promoting their businesses. They may be able to provide some leads and assistance in the area of your field. Their email address is www.fedmoney.com/grants/59043.htm.

There are also two other organizations that can help you; one is called the Women's Business Enterprise National Council. The Certification from this organization is one of the requirements for Minority and Women Owned Business to do business with Wal-Mart. Their website address is http://orgs.womenconnect.com/wbenc.

The other organization that should help you is the National Association of Women Business Owners. They are in your Chicago area and can be found at http://www.nawbonet.org. -----------------------------------------------

Subject: Criteria for Minority Business

From: W. A. "Trip" Wood III
Supply-Chain Manager
Krupp-Gerlach Company
Presta Division

I retrieved your name from the Internet and was hoping that you could help me. My company is a Tier 1 supply to Ford and Chrysler and we are looking to source several of our components to minority businesses. We have contacted several firms, but we are ignorant in the criteria that these businesses need to meet to qualify. Do you have a resource, either within your organization or available on the Internet, that addresses the criteria for the qualification for a minority business either in general or, specifically, within the automotive community?

I would greatly appreciate any assistance you could provide.

AskRecy Response:

This question is asked quite often and warrants repeating.

A Minority-owned Business Enterprise is a business that is at least 5l % owned and controlled by one or more minority persons. A minority is generally defined as an individual who is African American, Hispanic American, Asian American, Native American, a Woman or a Disabled person.

There are many specific eligibility criteria for certification; however, four basic rules generally apply; (1). United States Citizenship or US resident alien status, (2) Fifty-one percent ownership by a minority, (3) Proof of effective management of the business such as hiring and firing authority, operating control, and decision-making role, and (4) Control is defined and evidenced by signature role on loans, leases and contracts.

Dun & Bradstreet expanded its Minority and Women-Owned Database by two-fold to help identify the needs of emerging business market opportunities for small business entrepreneurs seeking to either start or expand their business. You can called D & B Minority and Women-Owned Business Development Group at (610) 882-6988 or send an email to knechelt@dnb.com