Value of Awards Lies Mostly in the Bragging Rights

By Vicki Torres

May 20, 1998 12 AM PT

Every year like clockwork comes the parade of small-business awards, whose numbers are rising as the awareness of small-business’ clout increases.

We’ve got the U.S. Small Business Administration’s Small Business Person of the Year awards, the Ernst & Young Entrepreneur of the Year, the Deloitte & Touche Fast 50, the Honda Supplier of the Year, Connecticut Mutual’s national awards, the Global Information Infrastructure Awards, and the federal Minority Business Development Agency awards, among others.

Then there are Southern California’s more than 225 chambers of commerce, ethnic and otherwise, plus all sorts of business associations, trade groups and economic development corporations that dole out awards each year.

And don’t forget all the universities and nonprofits, plus city, county and state agencies, eager to tip their hats to successful entrepreneurs.

Together, all these small-business saluters must keep a small army of calligraphers and trophy and plaque makers in the black.

But what’s the value of these awards, when they come tumbling into entrepreneurs’ hands like Cracker Jack prizes?

And what’s the validity, especially this year when Michael Hernandez, slated to receive the SBA’s Young Entrepreneur award, got a handful of humiliation instead of a plaque because of a bankruptcy overlooked by the federal agency in its selection process?

What’s the point of all this award horn-tooting?

Well, horn-tooting, precisely.

“It’s not only PR and marketing for the businesses that might win, but for the associations who get to display the caliber of its members,” said Debra Esparza, director of USC’s Business Expansion Network, which recently held its own business awards dinner.

For federal agencies like the SBA or for nonprofits funded by the government, awards ceremonies are a slightly more discreet way to toot one’s own horn and help ensure that the federal dollars keep rolling in, Esparza said.

The SBA reaps tons of nationwide publicity every year by selecting local winners whose dramatic stories of success the media can easily and quickly zero in on. Like Ernst & Young, which organizes a nationwide contest, the SBA brings on board corporate underwriters who also get to boast about their support of small business.

But, even with the publicity, the awards, at least for most corporations and agencies, do not translate directly into customers.

“It’s equivalent to public relations versus advertising,” said Jon Goodman, director of the USC Annenberg Center Incubator Project and a longtime contest judge for Ernst & Young. “Basically, you get your name in front of the right audience . . . but there’s not a direct relationship with new clients.”

For organizations that sponsor or host awards, the cost is enormous and not a money maker. One Ernst & Young employee admitted that the company’s top executives frown deeply from time to time when they look at the bottom line and the involvement of the firm’s 23,000 employees.

But for the small companies that manage to snag an award, the returns can be measured in hard dollars.

Kathy Taggares, founder of K.T.’s Kitchens, a $30-million pizza-making company in Carson, mounted her trophies, plaques and newspaper articles in the lobby. The display softens up bankers, vendors and customers, who treat her with a tad more respect, she believes.

The awards also boost pride and morale among employees, who often cheer loudly at these award banquets. The owners find themselves suddenly overcome, whooping when their name is called and breaking down in tears once the award is put in their hands.

That’s understandable. In starting her business from scratch, Taggares said she risked everything, selling her car, home and jewelry to buy equipment and a factory. During one five-week period, she never left the plant. She slept on the floor and didn’t see daylight all that time.

“Most entrepreneurs have these kinds of stories,” she said. “You put your life on the line. You get an award like this and, bingo, it makes it all worthwhile.”

And that, in the end, is what may be the real reason for all these awards: appreciation for hard work done well. Why shouldn’t small businesses get a pat on the back?

After all, this is a society where corporate CEOs are treated like celebrities, courtroom attorneys and those on trial log miles on the talk-show circuit and movie stars bask in the glow of Emmys, Grammys, SAG awards, Oscars, MTV awards, Golden Globes, People’s Choice, Image awards and Independent Spirit awards. Many small-business awards ceremonies have just as much drama.

“When you’re dealing with these kinds of small companies, you’re dealing with inconceivable struggles,” Goodman said. The awards, she added, are “genuine celebrations of small-business acumen and the American dream.”

“Their speeches are always the same,” she said of the winners, “complete paeans to the people who helped them build the company. Why wouldn’t they weep?”

Times staff writer Vicki Torres can be reached at (213) 237-6553 or at [email protected].