Benefits of a Minority-Owned Business Certification
Businesses that qualify for a minority-owned business certificate can take advantage of special perks such as government grants, contracts, and programs, as well as unique opportunities that can help them grow. The certification shows that the business is credibly established and is ready to work with large public and private entities. Following are a few benefits of a minority-owned business certification.
Access to customer and client databases
As a certified minority-owned business, you will have access to a large database that supports supplier diversity and gives you access to prospective customers that may benefit from your product or service, leading to increased profitability. In addition, your business will be accessible to interested purchasers who can connect with your company. This database is leveraged by major corporations and government entities, which creates immense opportunity for the community of minority-owned businesses at large.
Increased business partnership opportunities
Governments and corporations around the U.S. often set aside a percentage of their contract budgets exclusively for minority-owned businesses. Many corporations and government entities make it a priority to partner with, support, or work with minority-owned businesses as part of a diversity program. These corporations will seek out certified businesses for their supplier relations in order to ensure they’re working with businesses with diverse backgrounds. The increased visibility to larger companies looking to partner with your business is a great advantage for minority-owned businesses looking to expand their market.
Training workshops, management, and technical guidance
Another benefit of getting certified is having access to various workshops, training opportunities, and mentorship programs. The National Minority Supplier Development Council (NMSDC) hosts a variety of events, from its Leadership Week and Building a Successful Diverse Business to an Advanced Management Education Program. Connecting with other business owners and learning tricks of the trade keeps your company agile and helps you avoid some of the pain points small businesses often experience.
Through the certification, your business will have access to events and conferences that bring together major organizations and fellow minority-owned businesses. These events offer educational insights, tools, and a community to help your business flourish. Through NMSDC sponsored events, you can connect with other certified companies to compare experiences, build partnerships, and share resources.
Who qualifies for the certification?
Criteria for certification requires that 51% of the business must be owned and operated by a minority, 51% of the stock is owned by one or more minority group members (if publicly traded), and daily operations and management must be exercised by the minority ownership members. Below is a full list of the criteria for the certification:
- United States citizens.
- Minority businesses must be at least 51% minority–owned, managed and controlled. For the purposes of NMSDC’s program, a minority group member is an individual who is at least 25% Asian-Indian, Asian-Pacific, Black, Hispanic or Native American. Minority eligibility is established via a combination of document reviews, screenings, interviews and site visits. Ownership, in the case of a publicly owned business, means that at least 51% of the stock is owned by one or more minority group members.
- Must be a for profit enterprise and physically located in the U. S. or its trust territories.
- Management and daily operations must be exercised by the minority ownership member(s).
For additional requirements and to see if you qualify, visit the NMSDC website.
In addition, the Small Business Administration (SBA) offers an 8(a) Business Development Program that awards eligible small disadvantaged businesses federal contracting dollars each year. The federal government has a goal of awarding at least 5% of contracting dollars for businesses with 8(a) designation. While 8(a) businesses do not necessarily need to be minority-owned businesses, all companies with 51% minority ownership are likely eligible. Visit the SBA website for the program’s benefits and qualifications.
If you’re looking for additional insights about taking your business to the next level, our experienced banking professionals are equipped with the knowledge, tools, and expertise to help you make the right choices for your minority-owned business. Call us today at 866-762-8392 to learn more.