How to get certified as a minority business?
Updated: Apr 9
Minority business certifications can open access to supplier diversity and inclusion initiatives across BigCos and many enterprise business organizations. Having a minority business certification can offer you a seat at the table of opportunity.
Getting your business officially certified as minority-owned can open up new opportunities for federal, state, local and corporate contracts.
Benefits of Minority Business Certification
“Certainly having our LGBTBE certification has opened the doors for us to have conversations we would have never had before. Nothing replaces the fact you must deliver on your promises and excel in your efforts; but, having a seat at the table has been life changing.” by Timothy Osborn
Governments and corporations around the United States often set aside a percentage of their contract budgets exclusively for minority-owned businesses. These entities want to ensure they are doing their part to buy from a broad set of suppliers that better represent all communities. However, if a business wants its operation to be formally recognized as a minority-owned business or enterprise, it should seek to get an official certification. This shows first that the business is credibly established and second that it is ready to work with large public and private entities.
There are currently four million minority-owned businesses in the U.S., with sales totaling close to $700 billion. If you fall into this category, you might consider getting your business certified as a Minority Business Enterprise (MBE).
An MBE certification allows you to benefit from the many public and private programs designed to help minority-owned businesses, like minority-owned business grants.
Here are some of the biggest advantages to getting certified as an MBE:
Federal contracts: Many federal agencies are required to give a certain number of contracts to certified minority-owned businesses. So this certification could lead to new opportunities you wouldn’t have found otherwise.
Federal tax incentives: The government provides federal tax incentives to businesses that choose to work with minority and women-owned businesses.
State tax incentives: Some states, like Georgia and California, offer state tax incentives to companies that use minority-owned businesses. For instance, Georgia provides state income tax credits to companies that use minority subcontractors.
Access to funding: Across the country, various programs are available to help minority-owned businesses receive access to funding. These programs may provide grants, loans, and business mentorship.
Types of Minority Business Categories & Certifications
In the U.S., a minority business enterprise is defined as a company that is at least 51% owned and operated by an individual that is at least 25% African American, Asian, Hispanic, Native American or LGBTQ. If the company is publicly-traded, then the stock must be at least 51% minority-owned as well. The NGLCC (National Gay & Lesbian Chamber of Commerce) provides additional support for LGBTBE certification and recognition including vetting all LGBTBQ applicants and conducting site visits reviewing business documentation.
Further, women owned businesses can work with WEBNC to pursue the women owned business certification. WBENC Certification validates that a business is at least 51 percent owned, controlled, operated, and managed by a woman or women. This means one or more women must have unrestricted control of the business, a demonstrated management of day-to-day operations, and a proportionate investment of capital or expertise. To become certified, business owners undergo a thorough vetting process, including review of business documentation and a site visit.
How LGBTBE Certification has opened doors at The Osborn Group, LLC
“Doors opened for us once we received the LGBTBE Certification, but keeping those doors open and harnessing the opportunities became a responsibility we had to step up to and engage.” by Timothy Osborn
The experience of being a LGBTBE Certified company has been very enlightening. Organizations like the NGLCC offer programming for certified business enterprises including supplier diversity training, match-making services where suppliers get to know you and your business, and leadership/operational business training. Taking advantage of the opportunities far exceed doing business with supplier diversity teams; but, it is harnessing the knowledge and insights provided by the certifying body equipping certified business owners for success.
How to get your minority business certification?
Federal government certification
If you want to succeed in the public sector, you could benefit from the Small Business Administration’s 8(a) Business Development Program. This program is designed to help “socially and economically disadvantaged” businesses.
According to the Code of Federal Regulations of the United States of America, “economically disadvantaged” individuals have a harder time competing in the market due to fewer opportunities for capital and credit.
To be eligible for the 8(a) Business Development Program, a small business must meet the following requirements:
Meet the SBA’s small business standards at the time of application and throughout the nine-year program. Click here to see if your business meets these standards.
Your business hasn’t already participated in the 8(a) program.
Your business is at least 51% directly owned and controlled by U.S. citizens who meet the criteria for socially and economically disadvantaged individuals.
Have the necessary financial capacity to perform on federal contracts successfully.
Demonstrate “good character.”
Don’t owe any outstanding federal financial obligations.
The business is owned by someone with a personal net worth of $250,000 or less.
The business is owned by someone whose average adjusted gross income is $250,000 or less for three years.
The business is owned by someone with $4 million or less in assets.
To get certified as an SBA minority-owned business, you can start by filling out a profile at SAM.gov. From there, you can certify your business information at certify.SBA.gov. If your business is accepted into the program, you’ll receive a letter from the SBA informing you that your application was approved.
Private sector certification
The National Minority Supplier Development Council (NMSDC) has programs for minority-owned businesses who want to connect with corporate companies.
If your application is approved, your business will be listed as an MBE in the regional and national Minority Supplier Databases. The NMSDC has a massive list of corporate members and private-sector companies your business can connect with and potentially receive contracts from.
To meet the NMSDC’s criteria for certification, minority businesses must meet the following requirements:
Your business is at least 51% minority-owned, operated, and controlled. Click here to find out if your business meets the NMSCD’s requirements for a minority-owned business.
Be a profitable enterprise that’s either located in the U.S. or its trust territories.
Show that the minority owners exercise management and daily operations.
The NMSDC MBE certification process begins by contacting the regional affiliate closest to your business’s headquarters. The weblink above will connect you with the links to locate the appropriate regional affiliate for your business.
Here are the steps you’ll take to get certified by the NMSDC:
1. Ensure that your business meets the criteria and qualifies as a minority-owned business
2. Gather together the required documentation:
Your business history
Certificate of Incorporation
Articles of Incorporation
Stock Certificates and Stock Ledger
Minutes to Board of Director’s meetings as well as Shareholder’s meetings
Bylaws (executed and attested) and Amendments (if applicable)
All agreement(s) about ownership, operation, and control of the business
Business cards that list appropriate corporate titles, copies of resumes, copy of driver’s licenses, and proof of U.S. Citizenship (Birth certificates or U.S. Passports only) for all Principals
Corporate Bank Resolution Agreement(s) to include Bank Signature Card(s)
Business Lease Agreement(s) (and Security Deeds if home-based)
Proof of general liability insurance and, in some cases, bonding
Copies of the businesses’ canceled checks
3. Register on the NMSCD site and complete the online application
4. Pay the application fee
5. Upload your documentation via the online certification application
6. Schedule your site visit and interview
The entire certification process can take up to 90 days to complete, and you’ll have to wait on final approval from both the board and committee members. If your application is approved, they’ll notify you by email and postal mail.
State and local agency certification
To participate in the MBE programs in your state, contact your state or local programs for further instructions. To get certified as an MBE in your state, you’ll need to apply at the regional office closest to your business headquarters.
Final Guidance and Thoughts
Historically, minority business owners have faced challenges in getting access to business financing and winning large contracts. A 2016 survey conducted by Biz2Credit looked at over 1,500 minority business owners. Over one third of the surveyed business owners said that lack of adequate funding was their biggest challenge. The first round of the Paycheck Protection Program also presented issues with equitable distribution of PPP funds to minority small businesses.
Given these (and the many other inherent) challenges that come with running a small business, it’s worth taking advantage of any available opportunities.
As a certified MBE, you’ll have access to favorable contract opportunities, marketing assistance, and other valuable resources. Plus, you’ll have access to small business training on topics like building alliances with supplier diversity representatives, partnering with BigCos, and standing apart as a minority owned business in a sea of competition.
If you’re looking for more information on funding for minority-owned business owners, how to get a minority business certification, or how to best position your business for long-term engagement with supplier diversity opportunities, be sure to follow our blog or contact us for guidance and direction.
(C) Copyright 2021 - The Osborn Group, LLC - All rights reserved. Sharing is permitted and appreciated.
About the Author - Timothy G. Osborn is the Founder/ Sr. Partner & Management Consultant at The Osborn Group, LLC where " We empower and equip emerging entrepreneurs, founders, c-suite executives, intrapreneurs, and corporate teams through three pathways designed for strategic impact - challenges, courses, and consulting."
Challenges are created to nurture and inspire personal and professional business development. Courses provide structured curriculum and utilize proven process models to fuel strategy formation and harness results. Consulting capabilities provide deeper insights across a wide array of industries, by our expert consulting team, customized specifically toward your needs and engagement objectives identified by your initial free consultation, deep-dive analysis.
The Osborn Group, LLC serves SMEs and BigCos as a Certified LGBTBE company participating in supplier diversity initiatives and request for proposal inquiries.
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