Judith Messina, Crain’s New York Business, January 30, 2020
Landing a piece of business from Metropolitan Hospital Center was a coup for Rodney Mendez, founder and CEO of ThinkBigData, an East Harlem digital marketing firm.
It might not have happened at all were it not for Buy Local East Harlem, a two-year-old program run by Union Settlement and the East Harlem Community Alliance that encourages residents and companies to spend dollars close to home.
To be sure, it’s never easy for a small business to find customers. But getting work from big institutions like Metropolitan can be next to impossible.
“I never knew how to get into the [procurement] process,” Mendez said. “With Buy Local, we sit at the table with the hospital, and they bring in their procurement people, [who] listen to your pitch. Otherwise, it might have taken months and years.”
Mendez helped the 322-bed hospital restructure its social media outreach and is working on extending the relationship. As an added bonus, he’s now on the approved vendor list for the larger public hospital system. As a result, he has the opportunity to solicit business from the 10 other hospitals in the network.
With $250,000 in funding from Citigroup, Buy Local East Harlem works to get consumers to purchase from local businesses and local businesses to contract with one another. The impact, supporters say, ends up being more than the sum of its parts. When local companies are thriving and growing, they hire neighborhood residents, who in turn pump money back into the local economy.
“There is a tendency to think about economic development in big programs and big real estate deals,” said Gregory Schiefelbein, director of Citi Community Development. “For most New Yorkers, that’s not what shapes their experience with the economy. It’s the hardware store or the bodega on the corner. We want to make sure store owners are positioned to build and expand businesses and employ people.”
In the two-plus years since it launched, Buy Local has generated $560,000 in sales for participating businesses. That’s probably an underestimate because Buy Local didn’t want to set up a formal reporting system, said Union Settlement Executive Director David Nocenti.
“We count what we can count,” Nocenti said. “The goal is to create ongoing relationships and dispel myths about small business.”
During the summer Buy Local expanded its mandate, launching a strategy to get not just small businesses but also large anchor institutions in East Harlem, including hospitals, nonprofits, schools and social-service agencies, buying from neighborhood suppliers.
Buy Local program director Michelle Cruz knows firsthand how hard it is to be a small entrepreneur. She shuttered her popular East Harlem Café in 2016 after eight and a half years in business, unable to make the numbers work.
Small businesses can struggle to find their way into the supply chains of big institutions, and they also have to fight the common assumption that they don’t have the capacity or know-how to serve big customers. It can take some convincing and a lot of show-and-tell, especially in a city like New York, where consumers and businesses have thousands of choices for where to spend their money, not to mention countless options online.
Buy Local East Harlem works with big institutions to debunk the idea that small businesses can’t handle their purchasing needs or that they aren’t service-oriented.
“We’re putting it on the table,” said Kimber Bogard, senior vice president of strategy and programs for the Academy of Medicine, which co-chairs the Buy Local East Harlem program. “We always bring a small-business owner to meetings with anchors so they can provide perspective.”
The academy is one of the big institutions in the neighborhood and has bought food, among other things, for donor receptions from local businesses and books written by a local historian for its board members.
Getting the word out
More than having to convince potential customers, local businesses, big and small, often don’t know what products and services are available in the neighborhood.
“It’s hard to buy local because it’s so easy to not buy local,” Nocenti said. “Because it’s so easy, we knew we needed to make it easy to buy, to put it in front of people.”
The East Harlem Marketplace and Supplier directory, put together by the alliance, does just that, listing local vendors by category.
At the same time, if soliciting sales from big institutions is tough for a small firm, it also can be a challenge for big institutions to do business with small suppliers, given their detailed vendor screening processes, centralized purchasing departments and weeks- or months-long payment schedules that can hamstring cash-strapped companies. Buy Local tries to short-circuit the paperwork and bureaucracy by bringing anchor institutions face to face with neighborhood businesses that meet their needs.
Metropolitan, for one, conducts forums to explain its procurement process to small businesses. Mount Sinai Health Center East does vendor education, has a supplier diversity committee and regularly tracks its spending on minority- and women-owned businesses.
“We do vendor education to expedite and facilitate their being vendors,” said Pamela Abner, Mount Sinai Health System vice president and chief administrative officer of diversity, adding that the hospital plans to do more this year to help local suppliers get on board.
Both hospitals also host pop-up markets and other events where local vendors get to showcase and sell their goods, which can pay off for them down the road.
“Now people know their name, have tasted their food or bought their lotion or soap,” said Alina Moran, CEO of Metropolitan Hospital. “We’re really trying to keep local businesses thriving and make sure they are creating jobs.”
For Jo-Ann Barett of Aromas Boutique Bakery catering service, Buy Local opened a door at Mount Sinai that would have taken months for her to unlock herself. Through the program, she’s also catered events for Union Settlement, Hunter College and a local charter school.
“Buy Local, they take the first step for us,” said Barett, who recently did a tasting event at Mount Sinai. “They create events that make those opportunities easier to find.”
Out of that event also came an opportunity for Barett to work with Mount Sinai’s diabetes program, helping patients learn how to cook healthy meals.
“For those of us ready to scale, [Buy Local is] holding our hands,” she said. “And for those who aren’t there yet, they are looking for opportunities.”
Union Settlement’s Nocenti believes the Buy Local model is ripe for replication in other neighborhoods and cities. Of keeping dollars in the community, he said, “It’s a virtuous cycle.”