When Nicholas Perkins, President of Perkins Management Services company, read the biography Black Titan: A.G. Gaston and the Making of a Black American Millionaire, his vision of how to become a business leader crystalized. During his heyday, Gaston was thought to be the richest black man in America and a pioneer among black entrepreneurs. Born in 1892 in a log cabin in Demopolis, Alabama, A. G. Gaston was raised by his grandparents who had been slaves. He would go on to become one of the first black entrepreneurs to dominate the business market using vertical integration to control the supply chain along every aspect of his many enterprises as early as the 1940s.
Perkins, who always knew he would become an entrepreneur, was emboldened by the story of Gaston to pursue his dreams after reading Black Titan in college. After starting his small business at 24 in 2005, Perkins grew his corporation into a multimillion-dollar service provider. Perkins Management Services company, based in Fayetteville, NC, now offers food services, commercial cleaning, laundering services and dry cleaning to colleges, universities and military institutions in seven states. TheGrio spoke to Perkins about his experiences starting out, what he learned along the way and his belief that entrepreneurs must take responsibility for others. His words of wisdom may inspire those of you seeking to start a small business in a down economy, just as Gaston’s life story sparked Perkins’ beginnings.
theGrio: How did you get your initial financing to start your business?
Nicholas Perkins: When I started my company I put in a bid for a small food services contract in Fayetteville. Like most small businesses, getting capital to start a business was very challenging, especially for a minority business. I was not able to secure any loans or anything to start my company. What I had to do was operate out of my savings and I worked [all the jobs related to] my contract myself. I was the breakfast cook, I was the food delivery guy, I was the janitor, I was everything that it required, in order for me to be able to keep labor costs down and mange my business profitably. Then I took the profits I earned for that project and reinvested in the business and it grew that way.
What businesses are winning in this economy, making them safest for new entrepreneurs?
Those that start a business under the auspices of providing a particular product that relies on discretionary income won’t make it in this economy. The government is the largest buyer of products and services in the country. I would encourage anyone trying to get into business to look into to becoming a [government] contractor.
How did you land your first government contract? That can’t be easy.
I had to better understand the way the 8(a) small business development program works. I spent a lot of time early on bidding for contracts that I was just spinning my wheels on because I did not have the past performance that the government was looking for that would score me in such a way that I would not lose points in the technical evaluation.
I found myself bidding on contracts, reaching for the competitive range, yet I could not win the contracts because we did not have the past performance that the government was looking for. So as a result I said well okay, what is it that I’m doing wrong? The first three or four years of [participation in] the 8(a) program should be focused on the 8(a) sole source requirement. Meaning that at that point in time, any contract that was valued at $3.5 million or less could be sold directly to the small business non-competitively.
That is how you build your past performance. You go directly to the agency, meet with the contracting officer, market your product or service to them, get the 8(a) sole source requirement and that is another jewel in your crown.
Then what you do is you build up your past performance on the 8(a) sole sources. That will allow you to, two or three years later, successfully compete for and win the 8(a) competitive requirements.
So I had to learn that the hard way. Once I figured that out I realized, okay that’s how you get the performance you need to be able to win the 8(a) competitive contracts.
It was not really up until recently that we were able to gain the type of financial partnerships in order to be able to get to the next level. Most small businesses find it challenging to find the necessary capital they need in order to be able to grow their businesses. That is one of the greatest challenges in this country that we have got to solve. Access to capital limits the growth of businesses, especially in the minority community.