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How to Get Certified as a Minority-Owned Business
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Minority-owned business certification offers entrepreneurs of color opportunities for networking, training and even the ability to compete for government contracts. Learn how to get certified as a minority business with federal and state government agencies. This article explains qualification requirements, timelines and processes and advantages of being certified with each program.
What defines a minority-owned business?
To qualify as a minority-owned business, most programs require that the majority of your business be owned by a person of color, though specific requirements may vary by program. According to the National Minority Supplier Development Council (NMSDC), this means 51% of the business must be owned by a person who is at least 25% Asian, Black, Latino or Native American. That minority business owner also needs to take part in the day-to-day management and operation of the business.
What are the benefits of minority business certification?
The benefits may vary by program, but minority-owned business certification — also called “MBE certification” — offers business owners of color wider access to opportunities. Those opportunities may include bidding on government contracts, entrepreneurship classes or coaching or networking with like-minded entrepreneurs. Becoming a certified minority-owned business can also help you qualify for certain minority small business grants and minority business loans.
Four places to become certified as a minority-owned business
There’s no one single place to get certified as a minority-owned business. Here’s several federal and state governmental agencies that offer MBE certification. Each has its own application process and unique benefits, so you’ll want to decide what is best for your business.
National Minority Supplier Development Council (NMSDC)
The National Minority Supplier Development Council (NMSDC) is a membership organization with 23 regional chapters for minority-owned small businesses. NMSDC offers MBE certification — or minority business enterprise — which provides access to networking, educational training and contract opportunities.
Certification as an MBE could take up to 90 days. First, you’ll need to register with your NSMDC regional affiliate and then apply online, uploading any necessary documents. After a site visit, the Certification Compliance Committee will make a recommendation to the board, which has final say on the decision.
To qualify, your business must be for-profit, located in the U.S. or its territories, and 51% minority owned. Minority ownership members need to be U.S. citizens who are “at least 25% Asian-Indian, Asian-Pacific, African American, Hispanic American, or Native American” and must have a role in day-to-day management and operations of the company.
SBA 8(a) Business Development Program
The Small Business Administration (SBA) offers the 8(a) Business Development Program for minority-owned businesses. The nine-year program offers dedicated one-on-one support, mentorship from more experienced businesses, advice from experts who are trained to understand regulations, and management and technical training from the SBA. In addition, certification as a minority-owned business with the SBA qualifies your business to compete for federal government contract opportunities.
To qualify for 8(a) certification as a minority business, your small business will need to be in operation for at least two years, and you can’t have participated in the program in the past. Your business must be 51% owned and controlled by U.S. citizens who are socially and economically disadvantaged. You also can’t have a net worth of more than $750,000, adjusted gross income of more than $350,000 or assets totaling more than $6 million.
Disadvantaged Business Enterprise program with the U.S. Department of Transportation
The Disadvantaged Business Enterprise (DBE) program offered by the U.S. Department of Transportation (DOT) offers minority-owned businesses opportunities to compete for federal transportation contracts. By law, at least 10% of DOT funds for highway and transit projects must be spent with DBEs.
To be eligible to be a DBE, your small business must be 51% owned by socially and economically disadvantaged individuals. Those individuals must also have a personal net worth of no more than $1.32 million, excluding primary residence equity and ownership in the firm, and must impact the management and operations of the business. When you’re ready to apply, gather the necessary documents and fill out the Uniform Certification Application. You’ll need to contact the state transportation agency in your state to find out where to send it. Approval time may vary by state, but a typical turnaround is 90 days.
Minority-owned business certification with state and local governments
Many states and local governments offer similar programs for minority business certification that come with unique benefits and have their own eligibility requirements. Your state office for minority and women business enterprises is a good place to start. Typically, these programs offer exposure, training and an increased probability of landing government contracts.
Major cities like New York City, Los Angeles, Chicago, Denver and Austin, Texas all have their own programs as well.For example, New York City’s program provides a listing in a directory promoting certified businesses, networking event invites, and educational opportunities tailored to your business. The New York state program, meanwhile, helps women and minority-owned businesses more efficiently secure state contracts.