How much do you spend with minority and women owned businesses? With small and local businesses? LGBT, Disability-owned, and veteran-owned businesses? It can seem overwhelming to dig into these numbers and I’ll give you some tips for that later on in the post. Before I tell you what to do, though, how are my numbers? Let’s dig into how I did on my diverse spend this year to see if I’m walking the walk.
2021 vs. Past Wrap Ups
If you’ve been with 12PointFive for a while, then you are familiar with the year-end wrap ups for 2018, 2019, and 2020 where I count my spend with diverse suppliers and let you know how I did and where I can improve. I started in 2018 with 11.5% spend and last year finished the year with 47.9% spend with women owned businesses. That number seemed hard to beat this year but I found I was able to do it and count my Tier II spend, the amount I spend with people that work with as subcontractors.
Looking at the infographic let’s talk about the big numbers. My overall spend with diverse suppliers in 2021 is 56.6% which means that for every dollar 12PointFive spent in 2021, 57 cents went to diverse suppliers.
Tier II Spend
A new category this year is my second tier spend, the amount I spend with contractors I hire to fulfill client work. This is exciting for me because it’s a signal that my business is growing and that I’m able to scale while supporting diverse business owners. My two largest contractors this year were Handmade LatAm and Barometer XP.
I wrote about Handmade Latam last month because we completed a grant together. Handmade Latam completed the Artisanal Catalog for International Buyers and 12PointFive served as an advisor, provided curriculum, and was the administrator of the grant in the U.S. It was a wonderful partnership. One of my favorite parts of it was that supporting Cathy’s business actually amplified support for artisanal businesses and provided a multiplier effect for businesses internationally.
Another business I had the pleasure of working with is Barometer XP. Barometer uses games and simulations to engage, connect, and prepare teams for greatness. While I recognize the need for that among my clients, it’s not my niche. I love to be able to introduce them to another women-owned business and expand what my business is able to provide.
What else is going on with the numbers?
Last year I mentioned that I wanted to find an insurance company that allowed for diverse spend. I reached out to my networks and was able to find a great company that is not women-owned but is Black-owned.
In addition to the 56.6%, the number goes up when you include the amount I spent with certification organizations and events supporting diverse suppliers: 3.2%.
Over the years, travel has proved to be challenging for diverse spend and since it’s a large category for me, it’s worth talking about. I do try to look for small and local businesses when I eat out or shop but for the most part, this spend is all what WBENC calls Act Intentional spend. That means, while I do take flights and there is currently not a certified diverse airline, that I count the spend with companies that have active supplier diversity programs. It’s not included in the 56.6% percent but when I count up intentional spend, and the amount I spend with certification organizations, the total number is 69.4%.
One of the challenges that comes up when I do this is the tension between cutting expenses as a core role of the CEO while also finding opportunities for diverse businesses. Once you have diverse suppliers in the major categories of spend – accounting, marketing, insurance, even some software – it becomes a challenge to edge those numbers up. So I looked at my expenses overall and came up with some creative ways to continue to make this interesting.
Merchant Fees: This is a tricky one because it’s something I’d like to cut down on in general and get more of those funds in the bank! However, sometimes people are just going to pay by credit card and that’s great. With Diversity Masterminds®, we use EPNA, a WBE company that can save you money with your merchant fees. That’s something I’m considering for 12PointFive as well.
More Subcontractors: I’d love to work with more diverse business owners as service providers for my clients. I’ve had great success when the opportunity arises so I’d like to be even more strategic about it.
Affiliates: With Diversity Masterminds® we have a formal affiliate program and it would be great to see how that could work with my consulting. I’m always happy to shell out for good referrals.
If you need any help counting up your own spend, or getting your story across about that spend to potential clients – let me know! In the meantime, I hope you are gearing up for a warm and relaxing holiday season