Business In Focus - October 2012
In a mere three years, AIMSC (Australian Indigenous Minority Supplier Council) has charted exceptional growth in incorporating both members and suppliers into its vision of a sustainable venture for the Indigenous enterprise sector. Initiated in 2009 as a three year pilot project based in Sydney, by 2011 AIMSC had already surpassed its performance indicators…
Today, with a total of 179 corporate and government Members (buyers), and 147 Certified Indigenous business Suppliers, this not-for-profit organisation is generating a great deal of interest and picking up momentum – it is turning contacts into contracts.
AIMSC’s success can largely be attributed to corporate and government buyers who are prepared to get involved with the organisation’s vision and the current Indigenous businesses offering their diverse services. “Managing the expectations of buyers and suppliers is one of the greatest challenges,” explains Natalie Walker, CEO of the Council. “It’s amplified because we’re dealing with more Members and Suppliers than anticipated.”
AIMSC feels the pressure this challenge of success creates in that it must find the right Suppliers for its Members and in some cases those Indigenous businesses don’t exist. “The sectors are immature in the sense that there hasn’t been much investment in growing Indigenous enterprise in Australia,” says Natalie. “So we’re dealing with an underdeveloped sector at the moment.” To date, AIMSC has fulfilled over $34 million worth of transactions between its Members and Certified Suppliers.
Not-for-profit organisation, AIMSC has proved itself to be well governed, with a strong management model and dedicated staff. Funded by the Australian Government Department of Education, Employment and Workplace Relations (DEEWR), AIMSC’s commitment lies in aiding the Commonwealth government with the requirements laid out in the National Partnership Agreement of Indigenous Economic Participation. This agreement, signed in 2009, supports the Council of Australian Governments’ (COAG) aim to close the employment gap, in ten years and by at least fifty per cent, between Indigenous and non-Indigenous Australians.
AIMSC’s strategic partners include Indigenous Business Australia (IBA). IBA’s focus is to implement programs that will accelerate Indigenous economic independence by creating wealth through investment opportunities. Both IBA and AIMSC jointly developed the Fast Track Business Loan scheme which provides prompt assessments and finance for quickly growing Indigenous businesses. These businesses, explains Natalie, are “Growing at such a rate that they need quick access to working capital, which AIMSC provides within a week so that they can continue with their contracts.” She also indicates that, “90 per cent of IBA businesses are still successful and growing after twelve months of operation… 80 per cent are still going two years after commencement with IBA.”
The Commonwealth’s Indigenous Opportunities Policy (IOP), revised in July 2011, has an impact on creating demand for Indigenous business through government contract arrangements, particularly in significantly populated areas. “We’ve seen more middle market players coming to AIMSC,” says Natalie. “They are trying to access government contracts, but they have to show how they are going to do business with Indigenous business.”
Through certification as an Indigenous business, AIMSC ensures that Australian companies and government agencies are connected with businesses that are 51 per cent Indigenous owned and operated. These businesses have to take the reward as well as the responsibility for growing their business, says Natalie. “We’re trying to grow a new generation of not only wealthy entrepreneurs who are Indigenous but also successful Indigenous business people that can be role members for future generations.” In order to be successful, an entrepreneur has to have a sense of commerciality as his or her driving force to grow their business – to do the work that the buyer expects them to do. “We focus on entrepreneurs and commercial ventures because we need to work with people that understand how to run a successful business,” Natalie explains. The 51 per cent criterion secures the AIMSC’s model’s credibility – that it is geared toward growth in minority controlled businesses.
Networking is central to AIMSC’s offerings. The organisation is often referred to as a “dating service” for business – it ensures that a given Indigenous-owned business is connected with the relevant decision makers in buyer companies so that deals are procured quickly. Often, it can be difficult for large corporations and government bodies to identify and engage with diversified Indigenous business. AIMSC offers assistance by hosting such events as its annual Connect Events, ensuring that Australians and the world’s largest buyers are exposed to Indigenous SMEs. “It’s the only event of its kind in Australia at the moment,” says Natalie. “We absolutely understand the importance of networks, not only between corporate and government buyers and Indigenous business, but also among the Indigenous businesses themselves, which are seeing a lot of great partnerships growing.”
Since registered buyers in AIMSC make a conscious decision to do business with Indigenous business Suppliers, bias isn’t normally an issue. However, Natalie admits that some members aren’t aware of what Indigenous business can and can’t do, generally through a lack of education and awareness. Many buyers assume that Indigenous business is limited to tourism, dancing and Aboriginal foods; this couldn’t be further from the truth. Many AIMSC suppliers offer an array of services such as teleconferencing, mining and engineering. Some members also believe that Indigenous businesses are high risk because they’re less reliable and more costly. AIMSC hopes to quell these myths, says Natalie. “By busting myths and showing the breadth and depth of Indigenous business… we work with our Members by asking them to give Indigenous business a less risky contract before they commit to something bigger. This gives the Indigenous business supplier an opportunity to prove themselves.”
Starting a business presents a unique set of challenges for any SME, perhaps more so for the Indigenous entrepreneur. It is often the case that an Indigenous entrepreneur lacks access to intergenerational capital, both financial and social – the inherited social networks just aren’t there from family members and friends involved in business. “We have intergenerational disadvantage and poverty,” says Natalie. “That’s the greatest challenge.”
As for AIMSC’s future, Natalie is optimistic. She believes that in the next five to ten years the organisation will be self funded with AIMSC satellite offices in all states and territories providing a national reach. Her hopes are to see regional offices not owned by AIMSC, but supported by them, in local communities, capable of creating their own Indigenous business markets. AIMSC wants to extend its reach globally so that its members can procure $500 million worth of business from certified suppliers in the near future. “There is so much opportunity now available for Indigenous entrepreneurs and businesses… That is what is going to take Indigenous Australia beyond the gap.”