Becoming certified as a minority-owned business allows you to access certain government and private-sector programs that can help support your efforts.
Originally Published Jun. 2, 2017
In 2012, the U.S. Census Bureau reported that there were 8 million minority-owned businesses in the U.S. That’s a huge number of business owners looking for opportunities to achieve the American dream and make it as a successful entrepreneur.
If you own one of those businesses, becoming certified as a minority-owned business allows you to access certain government and private-sector programs that can help support your efforts. Here are three certifications/qualifications that can help minority business owners get support for their venture.
The U.S. Department of Transportation (DOT) DBE Certification
The DOT developed the Disadvantaged Business Enterprise (DBE) Certification to assist DBE companies that wish to compete for federally assisted highway, transit, airport, and highway safety contracts. Any state or local government that receives DOT funding must maintain a DBE program that conforms to DOT standards.
Eligibility standards state that you must be in a socially and economically disadvantaged group and own 51% or more of a small business. The DOT defines “presumed groups” as defined in the next section. Other individuals may prove their disadvantaged status based on the DOT standards — these are handled on a case-by-case basis and intended for groups with disproportionately low incomes and high unemployment rates.
Contact your state Department of Transportation to learn how to apply for DBE Certification.
The 8(a) Business Development Program
The 8(a) Business Development Program was created by the Small Business Administration (SBA) to help disadvantaged businesses compete in the marketplace. This nine-year program provides business assistance to help disadvantaged businesses succeed in government contracting and in competing for commercial business. The program aims to “graduate” companies that will thrive in today’s competitive environment. However, before you can apply for the program, you need to qualify as a socially disadvantaged individual.
Some minority groups automatically qualify as “presumed groups,” meaning they are presumed to be socially and economically disadvantaged and can apply to the program. These groups include African Americans, Hispanic Americans, Native Americans, Asian Pacific Americans, and Subcontinent Asian Americans. In addition, Alaska Native Corporations, Indian Tribes, Native Hawaiian Organizations, and Community Development Corporations can also apply to the program.
Besides being in a presumed group, there are other SBA requirements that must be met by the owners of the business and the business itself. You can review the steps in the application process on the SBA website. Qualifying as a socially disadvantaged individual isn’t technically a “certification,” but the program is large enough that we wanted to include these standards in the article.
There are a number of benefits offered by the program. For instance, participants can receive sole-source contracts and form joint ventures and teams to strengthen their position when bidding on contracts. In addition, the Mentor-Protégé Program pairs successful firms with companies new to the program. The mentors provide a range of assistance, including technical expertise, contracting help, and more.
Getting a foot in the door at the SBA can help you understand the process for accessing government grants and contracts and can even open doors to understanding how to qualify for SBA loans — the gold standard when it comes to business financing for growth and expansion. Those loans can be some of the most difficult to qualify for, especially if you haven’t established a business credit score.
The National Minority Supplier Development Council’s MBE Certification
The National Minority Supplier Development Council (NMSDC) is a trade group that supports certified minority business enterprises in obtaining new business opportunities and connects them to their network, which includes corporate members. Their goal is to help MBEs integrate into industry supply chains and to help corporate members meet the increasing call for supplier diversity. The council’s efforts match more than 12,000 MBEs to their impressive network of corporate members.
The council’s regional affiliates coordinate the MBE certification process, and you’ll want to start your application by contacting the affiliate closest to your company’s headquarters. You can visit NMSDC Central to learn more about applying for certification and completing the MBE Certification Application.
This is not a government-affiliated program like the 8(a) and DBE certification. There is an application fee for processing the application. The application process also includes a site visit and interview. The Council’s Certification Committee will review your application, and the Council’s Board will issue final approval after a review of the committee’s recommendations.
In general, your business may apply for certification if the company is 51% owned and operated by minority individuals who are U.S. citizens. The minority ownership members must manage the company’s daily operations and be a for-profit enterprise located in the U.S. or its trust territories.*