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How to get certified as a minority-owned business

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Small business ownership among minorities has grown tremendously, accounting for 50% of all new businesses over the last 10 years and bringing the total number of minority-owned businesses in the U.S. to 4 million. Together, these businesses have achieved annual sales totaling nearly $700 billion and have created over 4.5 million jobs across the country

Yet, as the creation of minority-owned businesses continues to rise, the ability of these businesses to thrive—or even just survive—long term is often challenged by obstacles like lack of financing or difficulty landing substantial contracts. That’s where getting certified as a minority-owned business comes in. 

What are the benefits of getting certified as a minority-owned business? 

Having your business recognized as minority-owned can pay off in many ways when it comes to your business’s success over time. For one thing, it can contribute to greater exposure. Recent data shows that 31% of U.S. consumers are more intentional about supporting minority-owned businesses. Tools like minority-owned business directories are a great resource to increase discoverability for your business. 

Getting certified as a minority-owned business can open even more doors and opportunities to help your business flourish over time. Here are a few of the ways this certification can help your business grow: 

Access to training and workshops

Organizations like National Minority Supplier Development Council (NMSDC) and SCORE offer mentorship programs, workshops, and technical training to benefit minority-owned businesses by helping them overcome the unique hurdles and barriers that often impede their growth. Community-specific organizations such as The Black Upstart or the League of United Latin American Citizens’ Latina Entrepreneur Academy provide even more specialized training. While many programs may not always require minority-owned business certification, earning that certification could help increase your exposure to the right programs and might afford you access to more exclusive opportunities. 

Networking and a sense of community

In addition to providing thoughtful training for minority-owned businesses, mentorship programs and workshops are a great way to build community and connect with other entrepreneurs from within your community. Organizations like the Happy Neighborhood Project also host recurring networking events for entrepreneurs, offering several events for minority entrepreneurs looking to connect with others in their community.

Beyond creating an opportunity to connect over shared experiences, community-based networking allows business owners with a common background to share resources, offer advice, and promote collective growth.

Opportunities to land government contracts

The U.S. government has an annual target of awarding nearly a quarter (23%) of federal contracts to small businesses. Of those funds, they aim to allocate about 5% to minority-owned businesses. Many states take minority business contracting further on a local level. For example, New York, Connecticut, and Illinois set aside 30%, 25%, and 20% of government contracts for minority-owned businesses, respectively. Getting certified through the Small Business Administration’s 8(a) Business Development Program is one way to increase your business’s chances of landing contracts in the public sector.

Increased business partnership opportunities

Like government agencies, several large corporations have supplier diversity programs in place to diversify their supply chain by engaging with minority-owned businesses. Minority-owned business certification through the NMSDC can help your business land game-changing private sector contracts through the organization’s extensive database of corporate partners across industries, including companies like Microsoft, Apple, Facebook, Google, Pfizer, Bank of America, Delta Air Lines, and Nike.

Does your business qualify for minority-owned business certification? 

To qualify for certification as a minority-owned business, your business must meet four main criteria:

  • You and your business owners (if applicable) must be U.S. citizens
  • Your business must be at least 51% minority-owned, managed, and controlled. (The NMSDC defines a minority as someone who is at least 25% Asian, Black, Hispanic, or Native American. For more on the countries of origin represented, see here.)
  • The business must be for-profit and physically located in the U. S. or its territories.
  • The minority owners must also participate in the daily management and operations of the business.

What’s the process of getting certified as a minority-owned business? 

There are a few different ways to get certified as a minority-owned business, but one of the most common routes is to go through the NMSDC. This organization is the leading certifier in the country and has over 12,000 certified minority-owned businesses in its network. 

Here’s how to get certified through the NMSDC: 

  1. Review the certification criteria outlined earlier in this article to ensure your business qualifies.
  2. Gather the required documentation, such as certificate of incorporation, proof of EIN, corporate bylaws, and operating agreement. (The documentation required varies based on your business entity. For a complete list of required documents, see here.) 
  3. Find the regional affiliate closest to your business location or headquarters and register through their website. Once registered, you may complete the online application.
  4. Pay the application fee online via credit card. 
  5. Before submitting your completed application, make sure that you’ve uploaded all required documents. Once submitted, your application and supplementary documents will be reviewed for accuracy. 
  6. Schedule a site visit with an NMSDC Certification Specialist.
  7. The Certification Compliance Committee (CCC) will make a recommendation to the Board of Directors based on your application, supporting documents, and site visit. 
  8. The Board of Directors will make the final decision regarding certification approval.

As you go through the application process, you can take as much time as needed. Your information is confidential and will be saved from session to session if you start the application and need to finish it later. 

The NMSDC certification process can take up to 90 days to complete. If your application is approved, you’ll be notified by the regional affiliate. If the application is rejected, you can submit a letter of appeal to the Board addressing your concerns. 

What are some other ways to get certified as a minority-owned business?

Beyond the NMSDC, several other federal and local organizations offer certification programs for minority-owned small businesses. 

For starters, the Small Business Administration (SBA) offers certification through the 8(a) Business Development Program. As mentioned earlier, this program is an excellent option for businesses interested in landing federal contracts, as the SBA partners with government agencies to award federal contracts to businesses with 8(a) certification. This nine-year program consists of two phases: a four-year developmental stage and a five-year transition stage.
Locally, at least 38 states currently have state-level minority enterprise business (MBE) programs dedicated to the development of minority-owned small businesses. Some states also have city-level programs to further support these businesses. For example, New York City offers its own Minority and Women-Owned Business Enterprises (M/WBE) Program. In addition to allowing minority-owned businesses to win bids on city contracts, certification through this program places a business on the NYC Online Directory of Certified Businesses for a chance to gain increased exposure.

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Disclaimer

This content is for educational purposes only and should not be construed as professional advice of any type, such as financial, legal, tax, or accounting advice. This content does not necessarily state or reflect the views of Bluevine or its partners. Please consult with an expert if you need specific advice for your business. For information about Bluevine products and services, please visit the Bluevine FAQ page.

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Disclaimer

This content is for educational purposes only and should not be construed as professional advice of any type, such as financial, legal, tax, or accounting advice. This content does not necessarily state or reflect the views of Bluevine or its partners. Please consult with an expert if you need specific advice for your business. For information about Bluevine products and services, please visit the Bluevine FAQ page.