By
Susan E.Majek
It is widely
believed that the "American dream" is easily attainable by anyone in
the US.
However, successful African immigrants who are usually known for not having
good financial support systems, excellent financial literacy skills, access to
capital, legacy name recognition, and exclusive mentorship opportunities that
are easily available to non-minorities can attest to the fact that achieving
their American dream wasn't easy.
In
the Washington, DC area, Ethiopians are especially known for
being entrepreneurs, especially in the restaurant, parking and security
industries. One man who is ahead of the pack and stands out as a leader and
employer to many is Ethiopian born DC Parking lot Czar, Henok Tesfaye
I was recently opportuned to meet this inspiring and exceptionally busy Ethiopian born business mogul who is the President and CEO of U Street Parking Inc, a company which generates a sizeable amount of tax revenue for DC at the recent Young African Professionals meeting, which was held at his mother's magnificently decorated upscale Ethiopian cuisine restaurant, Etete Restaurant.
While networking with fellow young professionals interested in Africa, we sat down to discuss how in spite of being an immigrant with many challenges, he made it to the top of DC’s parking industry, and how he continuously works to grow his business. He also shared nuggets of wisdom, so others can learn from his experiences and avoid some costly mistakes he made. Below are excerpts from the interview:
Who is Henok Tesfaye?
I was born in Ethiopia and came to the US in 1990 at 17 years old with $50 in my pocket.
Why did you come to the US?
I came to receive my higher education, which I started in the ninth grade. I also came to have a safe and secure environment, and better future employment and business opportunities.
What gave you the confidence to become a business owner?
I grew up in a business environment because my parents had transportation businesses in Ethiopia, which I helped run. So when I came here, my thoughts were getting an education and returning to Ethiopia. However, things changed in Ethiopia, and I stayed in the US, but I still knew business was the best career path for me.
What’s your life like?
It’s very busy. If you’re a 9 AM to 5 PM person, you work those hours Monday through Friday and go home. When you work for yourself like I do, it’s a different story. You may see me driving a nice car or wearing nice suits, but the life of a business owner isn’t easy. You have no life and you carry the financial, credit and employee burden of your company on your shoulders. You can never go home early.
How do you grow your business?
During the week after office hours, I’m out promoting my business and looking for more business opportunities by networking and handing out my business cards. My wife complains that I don’t spend enough time with my kids, but that’s the nature of being a business man and entrepreneur.
Even on weekends I work. I go to fund raising and networking events. I’m always promoting my business everywhere I go including restaurants, night clubs, hospitals etc because by talking to people, I get recommendations and referrals to other people and businesses I can serve.
It’s all about word of mouth marketing, which I do myself. I’m very passionate about marketing my business. It’s so much a part of my routine that if my young son is with me and sees me approaching anybody, he’ll ask me, “Dad, are you going to give him a card? It’s funny, but it just goes to show that he sees what I’m doing and he is learning from it.
How did you get the idea to engage in this line of business?
I was working part-time as a parking attendant at Colonial Parking while I was in school, and I was thinking to myself, “Why am I working here? Why don’t I try to create my own company?” I thought about that often because I was doing all the work, but I had never seen my boss or the owner visit the parking garage.
What obstacles did you face?
There are many obstacles to becoming a successful African business in America. There was the culture shock, language barriers, negative stereotypes, and race and cultural issues. All those affected me, but I didn’t let them get me down. I studied hard in college, worked hard and focused on my goals.
How did you start your company?
I worked very hard and kept my eyes on the prize of owning my own company and competing with large national and international companies. In 1998, my brother, Yared and I started our own company with the two of us being the only employees. We got a small contract to valet park cars and we leased a small lot on U Street in North West, DC to do so. Then we got additional valet jobs, hired additional employees and opened our office on U Street, NW.
How did your business progress?
Even though we were often on the verge of success, we continued facing difficulties receiving and being awarded contracts because we were disadvantaged at competing against other local and international parking companies.
How did you overcome that?
Hard work and innovation ultimately pays off. Over time, we knew enough to become certified as a Small, Local and Disadvantaged Business Enterprise (SLDBE), in DC and as a Minority Business Enterprise in Maryland, Virginia and Pennsylvania because being certified helps in different aspects in many public arenas.
Why did you get certified as a SLDBE?
I was bidding on several contracts including government, local; city and private contracts and I didn’t receive information from the local or federal government on what to do. I submitted hundreds of proposals but no contract awards. Then I started talking to people including consultants, who advised me to become an SLDBE, which was a term I wasn’t familiar with. I told them I had a license to operate my business, but they responded saying in addition, I also need to be SLDBE certified to get the opportunity to competitively bid on contracts.
How did you get certified?
I went to the Department of Small and Local Business Development (DSLBD) office at 441 4th Street NW DC to get the application. However, I quickly realized that the application isn’t easy to complete. It takes time and you need someone who is familiar with the application document and process to help. I ultimately completed and submitted it, but the process took me four months because it requires a large amount of information.
How did being certified change your business?
Due to the SLDBE Development and Assistance Act, any DC or Federal Government contract at the time required a minimum of 25% minority business or 35% Certified Business Enterprise (CBE) participation, so that helps even if you don’t have the financial capacity to participate in some business ventures.
Bigger companies will seek out small certified companies in the government’s database in their industry and partner with them because they can’t bid on these contracts alone.
Once I became certified as an SLDBE under the parking industry category, I was included in the DC government’s database. A Request for Proposal (RFP) came in 2005 for the DC Convention Center Parking lot in Downtown, DC. People were telling me to find a bigger company who was willing to be my partner and bid on the project as a joint venture because it was a big 7 million dollar contract.
I discussed it with my attorney who advised me that if I can do it by myself, I should, since I am local and minority certified. I took his advice and began by creating a proposal, which included my certification status, and I received other credits allotted because I’m a local DC resident, so I got the full twelve credits possible. I bid on the contract and it was awarded to me in January 2006.
At what level is your company currently?
We have over 500 employees, and manage parking at the Washington Convention Center, Reagan and Dulles International Airports, the National Baseball Stadium, which is the largest, and FedEx Field Stadium, as a subcontractor with Standard Parking. We also manage 80% of the restaurants and night clubs in Downtown, DC. We are currently the largest valet parking company in DC and you’ll see my employees all over Downtown, DC wearing their red jackets.
What lessons did you learn as an entrepreneur?
Persevering and taking advantage of the available programs that assist in education and business is essential.
What advice do you have for potential entrepreneurs who need capital to start their own businesses?
Businesses require capital, so a good relationship with banks is essential. I personally prefer smaller local banks like Capital Bank and Georgetown Bank, where I know the President, Vice President and other decision makers, because I can talk to them, tell them what I’m doing and show them my contracts. This personally engages them in my business process, so they understand it, which is essential for banks to fund businesses.
I’m happy with my banks because they have always been good to me, and I like to give them my business. My employee payroll and Line Of Credit (LOC) is through them. The larger banks often don’t know you personally. Even if they have a local branch close by, their head office is in another state, so you don’t have a personal relationship with the decision makers.
Also, when you apply for loans or a line of credit, they use impersonal computer systems to process your application and if your profile isn’t 100% in line with its approval criteria, your application is denied. So, business owners need to cultivate financial relationships to survive in business and smaller local banks work for me.
Have you had negative experiences with larger banks?
Yes. In 2003, I went to different banks like SunTrust, PNC and other larger banks to get a LOC for like $5,000, $25,000 or $30,000, which I couldn’t get from them. So, I decided to go a different route. Prior to that time, when I was selling cars and Enterprise Development Group (EDG) in Virginia loaned my customers money to buy cars.
In December of 2006, I talked to the company’s president who said they could loan me up to $35,000 through their Micro Loan Program under the Small Business Administration (SBA). I applied for the loan and it was approved. That helped me grow my business. Although it wasn’t much, I opened a car dealership with the money, which was very helpful for me to incorporate into my business.
What skills did you acquire that enables your business to thrive?
I work hard to get the job done. My employees and I are always working, and I keep my red jacket in my car so I can help my staff if they get busy. I’m always working and I have gained experience. I talk to other business people. I have business mentors, and I learn from much older people too. I didn’t take classes for what I do, so I believe I’m gifted to do this, but I’m open to listening to people and I also build lasting relationships.
What was your biggest challenge in realizing your dream?
It was incorrectly writing and assembling proposals. I didn't how to research, what to do or where to go. For example, 8 years ago, I was bidding on a hotel project in Downtown, DC and I went to this attorney I know to write a proposal for me. He charged me $5,000 and wrote a one page proposal, which I submitted.
I didn’t understand what occurred when I wasn’t even contacted for an interview. So, I wrote a letter to the president of the hotel requesting to know why I wasn’t contacted to be interviewed. He was honest with me. He told me my mistake was sending him a couple of pages of paper as my proposal.
He then showed me what serious proposals with hundreds of pages that my competitors sent him look like. When I saw them I was amazed. They included essential information my proposal didn’t like pictures, resumes, daily percentage of occupancy numbers, key project performance goals, executive summaries, and 5 and10 year projected performance benchmarks, just to name a few.
That’s how I knew what the expected standard for proposals was, instead of what I had submitted. Now my proposals are about 200 pages long and they can compete with any other giant corporation’s proposal. I also invest my time and money in people who can get things done for me like consultants, advisors and lobbyists.
Do you have business regrets?
Philosophically speaking, the deal probably wasn’t for me. However, I was negotiating for a joint venture partnership with a California based company and we were negotiating percentage rates. I wanted more than what they offered me, so I requested a higher percentage being confident that we’d win the contract and execute it as a joint venture. However, they found another local partner who was willing to take a much lower percentage. The contract was substantial as it was for ten million dollars over 5 years and I lost out on that deal, but I have had many more business successes since then.
How are you sharing your success with others?
I employ many people in the DC area and I have a construction company with 50 employees doing road projects and leasing equipment to the Chinese and local governments in Ethiopia. Also, through my non-profit organization, Mary Joy , I support 50 children and 50 elderly people.
What’s your best general advice?
No matter where you are, what language you speak or your race or ethnicity, there are still many opportunities in the world and the US. Like Thomas Edison said, “You don’t know how close you were to success when you gave up.” So people, especially immigrants should not give up on their dreams. Another thing is that no matter what part of the world you live in, don’t forget or ignore your culture and tradition. Be proud of your heritage. Never hide it.
What’s your best business advice?
Your actions speak much louder than your words. There you have it. Each person’s path is unique. However, the information Henok selflessly shared about his path to becoming a respected business leader is information others would be wise to learn from to assist them in achieving their individual goals in starting their own businesses or become better business owners.
No comments:
Post a Comment