The Office of Minority Business Enterprise Could Do More to Start and Maintain Minority Businesses
CED-77-136: Published: Nov 10, 1977. Publicly Released: Nov 10, 1977.
- Full Report:
The Office of Minority Business Enterprise (OMBE) was established to be the focus of Federal efforts to help establish and expand minority businesses. However, the OMBE management assistance program provided few benefits to the 344 minority and prospective minority businesses sampled. Only 25 percent of the 169 prospective businesses got enough help to start, and about 37 percent of the existing businesses helped were out of business or could not be located.
The Office has emphasized quantity rather than quality assistance, causing such deficiencies as: business plans not being prepared for about two-thirds of the cases, management assistance not being given to about one-third of the cases, and cases receiving assistance getting only portions of the comprehensive program. Contractors generally do not provide assistance according to OMBE criteria and have not followed their clients' progress after initial assistance.
Recommendation for Executive Action
Comments: Please call 202/512-6100 for additional information.
Recommendation: The Secretary of Commerce should require the Director of OMBE to: redirect the management assistance program to encourage contractors to provide a comprehensive assistance program to only as many clients as the contractors can assist over a long-term period; require contractors to obtain periodic financial statements from their clients; require that each serious client's business weaknesses and needs be analyzed in a formal business plan; assure that contractors provide clients sufficient management assistance to meet their needs; assure that contractors follow their clients' progress frequently to evaluate growth and identify problems; restructure the time-phase plan so that primary emphasis in the OMBE evaluation process is placed on meeting program objectives and secondary emphasis placed on activity levels; direct contractors to stop abandoning clients at the first indication that clients cannot qualify for financial assistance; direct contractors to exhaust all alternatives in helping clients locate equity and other resources needed to finance businesses; and study the possibility of freeing regional program officers from their heavy contract-administration workload.