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Entrepreneurs can move from military service to customer service with help from federal, state and local government agencies.
July 2007. Todd Nelson, Specials to the Star Tribune

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Air Force veteran Paul Smallwood learned how to work with the government with help from the Procurement Technical Assistance Center. Photo by David Brewster

Veterans salute business aid center

Military training -- and the work ethic, discipline and perseverance it instills -- can pay off for veterans who go into small business.

Still, enterprising veterans find that small business can be daunting, from getting access to corporate buyers to bidding for government contracts and competing with larger firms for those jobs.

That's when another military lesson -- the value of teamwork -- can make a difference, veteran business owners say. One ally they and other entrepreneurs can turn to is the Procurement Technical Assistance Center (PTAC), which helps hundreds of Minnesota companies land millions of dollars in government contracts.

"Military service teaches you how to work together as a team," said Paul Smallwood, an Air Force veteran who founded FlowSense, a mechanical and general contracting company in Maple Grove, in 2001. "I started working with PTAC to learn how to do business with the government, and they have been a very integral part of the team with us."

"We did not want to lose that community asset," Cheung Ho said of MEDA's decision to be host to the procurement center. "We see that it really is very well aligned to our own strategy."

The procurement center's staff members have made introductions and helped identify new business leads, Smallwood said. Through the center, he said, his company has obtained government contracts that have brought in new and recurring revenue, diversified the services it provides and even hired additional employees. For Saginaw Construction in Duluth, government contracts accounted for two-thirds of 2006 revenue of more than $2 million, said owner Steve Erickson, who served in the Army. He worked at the paving company for four years before buying it from the retiring owner in 1997. Expanding Saginaw into residential and commercial remodeling and construction has added to revenue, Erickson said, but with the downturn in those markets, government work secured in part with PTAC help likely has kept him in business in the last couple of years. The work includes projects at the St. Cloud Veterans Administration Medical Center, the Minnesota Air National Guard's 148th Fighter Wing in Duluth and the Minnesota National Guard's Camp Ripley near Little Falls, Minn. "The only way you can stay in business any more is to keep close track of what's going on in the economy and react accordingly," Erickson said. "Had I not gone into new areas, I seriously doubt that I'd still be doing what I'm doing," Erickson said. "My banker agrees." Business owners can register as clients online at ptac-meda.net, center director Sherri Komrosky said. "We do a one-on-one visit with the company," she said. "We have a 1-inch-thick packet that shows the regulations they need to know, the websites to look up." One of the first things PTAC helps companies do, Komrosky said, is get listed on the Central Contractor Registration (CCR), the primary database for vendors that do business with the federal government. Federal agencies must dedicate 3 percent of prime contract awards to small businesses owned by veterans or service-disabled veterans. The goal for U.S. Department of Veterans Affairs contracts rose to 7 percent late last year. "Everybody wants to do business with the government," Komrosky said. "They cannot get an award without being on the CCR." Small businesses that get government contracts typically are well-established, with good track records, she said. "The more successful ones are the ones that have commercial products," she said. Nationally, veterans own 3 million businesses, or about 15 percent of the 20 million firms that responded to a 2002 survey, according to a Census Bureau report released last week. About 7 percent of the veteran business owners had service-connected disabilities. The report, the first to look at veterans in business, did not include state-level data. PTAC's continued existence is a product of the kind of teamwork for which veterans such as Smallwood and Erickson have praised the agency. The Defense Department, the largest buyer of products and services in the world, has established procurement offices in each state to help companies market themselves to government agencies. A nonprofit agency or a university must be the PTAC office host. Almost four years ago, state funding was set to expire for Minnesota Project Innovation, which then was host to PTAC. Another nonprofit -- MEDA, the Metropolitan Economic Development Association -- stepped forward to provide the center a home in October 2003. While MEDA provides minority-owned-and-managed businesses with financing and training, concentrating primarily on the Twin Cities area, PTAC works with all small businesses statewide. Of the $160 million in government contracts small business were awarded last year, roughly half went to minority businesses, said Yvonne Cheung Ho, MEDA president and CEO. That's a substantial increase from several years ago.

"We did not want to lose that community asset," Cheung Ho said of MEDA's decision to be host to the procurement center. "We see that it really is very well aligned to our own strategy."

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