Griselda Gonzalez of CG Moving speaks at the 2023 Stanford LBAN SOLE Summit on federal contracting.
The SOLE Summit Panel at Stanford LBAN, February 16, 2023
Griselda joined David Andalcio and Saskia Sorrosa on a panel about contracts and Latino lending.
Last Thursday, February 16th, I had the distinct pleasure of sharing the stage with David Andalcio, CEO of Chicago-based Wynndalco Enterprises, LLC., and Saskia Sorrosa, Founder of New York-based Fresh Bellies. Indulge me for a moment as I show off my video editor skills:
Watch the panel discussion on YouTube.
Jennifer Garcia, COO of the LBAN / Latino Business Action Network, moderated our panel discussion on contracts, missed opportunities, and the debt and equity financing landscape for Latino Owned Businesses.
Who We Are, CG Moving Company's Story
Griselda is Contract Manager and CFO at CG Moving, a federal and commercial mover since 2005.
I shared a brief bio: mom of three, and Contract Manager and CFO at CG Moving Company, Inc., with warehouses in South San Francisco, Sacramento, and soon West Sacramento, California. We are a federal, state, municipal, and commercial contractor, as well as residential movers and licensed installers of modular systems. We offer online inventory management and on-demand delivery services.
Our origin story: my husband Charlie Gonzalez, against my advice, founded the company in 2005 after years of working as a packer, mover, driver, and supervisor. When he is not around, we say “CG” stands for “Cool Girls Moving Company” since Olga Garcia and I handle the company’s licensing, insurance, contracts, estimating, invoicing, and other administrative and operational tasks. I was laid off in 2008 and, after managing a HELOC operations, admin, and collections department where we transferred over 3,000 loan files and close to $400M in HELOCs to the federal government and investors, I joined the company full time. I am glad my husband did not listen to my advice!
The Data on Latino Business Contracts and Why It Should Make You Angry
LBAN data shows LOB federal contracts average $0.5M vs $14.8M for White-owned businesses.
The first question centered on missed opportunities when Latino Owned Businesses do not engage with the federal government. The 2022 State of Latino Entrepreneurship Report pointed out that although Latino Owned Businesses (LOB) are more likely to win contracts with corporations, federal and state governments, the size of those contracts is substantially smaller. On average, LOBs win $1.4M in corporate contracts vs. $4.8M for White Owned Businesses (WOB); $0.6M LOB vs. $20.5M WOB for state contracts; and $0.5M LOB vs. $14.8M WOB for federal contracts. When I look at these numbers, I feel infuriated.
The SOLE Summit itself was a success. More than 700 people filled the Cemex Auditorium and two overflow rooms were at capacity, representing Latino Owned Businesses from all over the U.S. and Puerto Rico. But now that the summit is over, we need to revisit the report, share this information, and keep this conversation alive with the banks we bank with and the people we put in power at every level.
The Federal Government Is the Largest Buyer, Are You Selling to Them?
The federal government spent $637B on contracts in FY2021, Latino businesses should be in that mix.
At CG Moving Co. we are a microbusiness, and two of our largest federal contracts exceed the report’s average of $500K, at $1M and $600K per year. It is an anomaly and it should not be.
Federal, state, and local agencies and corporations are missing out when they do not hire Latino Owned Businesses. We are resourceful, agile, competitive, and prepared. We have this fire. The U.S. Government Accountability Office (GAO) reported that in FY 2021, the federal government spent about $637 billion on contracts. A military base, for example, has homes and people who need painters, movers, educational support services, clothing, food, and more. Anything you currently sell to a commercial customer, you can sell to the federal government. And data from the National Equity Atlas shows that businesses owned by people of color are more likely to hire people of color, increase economic activity in their communities, and strengthen competition, all of which is good for the public and taxpayers.
On Matchmaking Events and Demanding Accountability
Griselda argues matchmaking events need accountability; sources-sought notices are more effective.
On the topic of matchmaking and internal connections: one of the perceived success factors from the report in securing corporate contracts was attending matchmaking events. And yet, LOBs are still reporting longer corporate contract cycles. When I was new to the contracting space, I signed up for every matchmaking opportunity I could find. But this took time from our small business, and eventually I found that this energy was better spent looking at sources sought / request for information notices on SAM.gov, where you can actually influence a future solicitation by sharing commercial practices and whether diverse or small businesses are interested and capable.
If matchmaking has worked for your business, keep doing it. But we need more accountability. We need to ask organizers of these events, especially public agencies, what contracting dollars are actually resulting from them. We cannot keep showing up when our racial or demographic group is queued for a social media post during Hispanic Heritage Month. We need to demand transparency and see who is coming out of those events with real, meaningful connections that result in actual contracts. Show me the data.
The Lending Gap and a Personal PPP Story
After 9 PPP denials, Griselda secured West Sacramento buildings via Community Bank and SBA 504.
On access to debt or equity capital: the report found that White Owned Businesses are more likely to secure loans with national banks when the loan amount exceeds $50,000. On loans of $500K and higher, WOBs secured 85% and LOBs only 67%. We should be asking our banks why this is happening and what they are doing to change it.
I had a traumatic experience during the first PPP round. I did not need it, but when I saw that everyone was getting one I applied. Confidently, I thought: I have a degree in Finance (Go Gators!), I worked in banking, I know my business. I was not prepared to be denied nine times. The last straw was learning that my Tia Reina, who owns Reina’s Restaurant on Mission Street in San Francisco, had gotten the loan. I eventually did get it. When it came time to finance the purchase of two buildings in West Sacramento, I decided not to go through a national bank. Back in 2019, I had met Vicente Lopez through LBAN capital matchmaking, and we stayed in touch. He connected me with Daniel Fujimoto of Community Bank of The Bay and Business Finance Capital, and together they secured an SBA 504 loan for both buildings, tenant improvements, and equipment totaling close to $3.4M.
What We Do Next, Resources and Next Steps
Resources: LBAN research, Stanford LBAN SOLE Summit video, and the LBAN Business Scaling Program.
In closing, I encouraged all LBAN/SLEI alumni to connect with their peers in the network. The people I have met and learned from across different industries and across the country have been nothing but supportive and enriching.
What do we do with this information? LBAN and Stanford have eight years of data. We need to keep empowering each other and act. We need to challenge the systemic practices and policies that have kept us and other minority, LGBTQ, veteran, and disabled business owners out of large contracting opportunities. We do that by demanding transparency in contracting practices, pointing out roadblocks, and changing them.
If you would like to watch a video of the event, here is the Stanford Graduate School of Business YouTube recording. If you want to connect with me to talk about federal contracting, small businesses, and anything in between, send me an invite and let me know if you were at the SOLE Summit!
If you know a Latino Owned Business that may benefit from the Stanford Graduate School of Business and LBAN’s Business Scaling Program, visit their website to apply.
