There has been considerable progress for minority-owned businesses in recent years. The rate of growth, for instance, surpasses that of non-minority businesses. But numbers show that there is plenty more room for improvement.
Here are some statistics that show the advancement and the challenges, courtesy of the Minority Business Development Agency’s fact sheet.
- Minority-owned businesses totaled more than 8 million in 2012, which was a 38 percent increase over 2007 figures. The number of non-minority firms not only didn’t expand in that period, but they also declined 6 percent.
- Gross receipts increased 35 percent for minority businesses in the five-year span, compared to 7 percent for non-minority businesses.
- Average gross receipts for all minority businesses were $173,552, compared to $552,079 for non-minority businesses.
For minority business owners, there are opportunities that can play a role in future growth. One step that can provide such a boost is minority certification. This can open doors to new opportunities with firms in the public and private sectors that are looking to increase their connections with minority businesses.
Here’s how Luwanda Jenkins, special secretary of minority affairs in Maryland, described minority certification in a story by Sarah Kessler on Inc.com: “It’s important because we have an obligation in government to ensure that all firms in our state have an opportunity to participate in contracts that are paid for with tax dollars.”
The government aspect of this is a crucial point. Sure, there’s nothing mandatory about getting minority certification, but some opportunities for government contracts can be lost without it. Certification can create those connections, which can then turn into new projects and revenue for minority businesses. Elizabeth Kraus examines this in a story for Kabbage.
“Many federal government agencies are even mandated to reward a substantial number of contracts to certified minority-owned businesses,” Kraus writes. “For example, the U.S. Department of Transportation requires that at least 10 percent of the money spent on contracts for certain projects go to businesses that are minority-owned, and entities (such as state transportation agencies) that receive DOT funding are required to develop Disadvantaged Business Enterprise (DBE) programs to ensure compliance.”
The process for certification isn’t necessarily an easy one. It can be time-consuming, with loads of paperwork, records and research to include. But the payoff may well be worth it. Here are some of the certification options that are available for minority-owned businesses.
U.S. Small Business Administration
About the SBA: The association was created in 1953 “as an independent agency of the federal government to aid, counsel, assist and protect the interests of small business concerns, to preserve free competitive enterprise and to maintain and strengthen the overall economy of our nation,” according to its website. The SBA’s 8(a) Business Development Program is designed to assist minority-owned businesses. This happens “through one-to-one counseling, training workshops, and management and technical guidance. The program also provides access to government contracting opportunities, allowing these businesses to become solid competitors in the federal marketplace.”
Eligibility: Small businesses must be owned by an American citizen, and “majority-owned (51 percent or more) and controlled/managed by socially and economically disadvantaged individual(s).” The business “must demonstrate potential for success,” and the owner “must show good character.” Read the full list of requirements here.
Benefits: The SBA offers development training, and guidance on how to continue meeting the program requirements, according to the site. “In addition, SBA’s Mentor-Protegé program, a subset of the 8(a) program, pairs mentor firms with protégé firms to provide managerial and technical assistance as well as joint venture and subcontracting opportunities to help the protégé compete successfully for federal contracts.”
National Minority Supplier Development Council
About the NMSDC: The council’s website describes it as “one of the country’s leading corporate membership organizations,” and “committed to helping you solve the growing need for supplier diversity.” This is accomplished by “matching our more than 12,000 certified minority-owned businesses to our vast network of corporate members who wish to purchase their products, services and solutions.” The site says the council’s reach includes public and private companies, along with health-care businesses and universities.
Eligibility: For a business to qualify, it must be at least 51 percent minority-owned. The NMSDC program designates minority group members as those who are “at least 25 percent Asian, Black, Hispanic or Native American. Minority eligibility is established via a combination of screenings, interviews and site visits.” Read the full list of requirements here.
Benefits: The NMSDC site explains that certification brings the opportunity to market a business’ services to “prospective corporate buyers who are looking to build relationships with trusted minority-owned businesses.” Other benefits include access to the council’s supplier database, educational and development programs and networking events.
Other certification
Additional assistance can come at the state level. Here’s how the National Conference of State Legislatures describes programs designated to help minority businesses:
“Some states have ‘set-aside’ programs where a certain percentage of government contracting is designated for minority firms. These set-asides are expressed as goals that government agencies try to meet. Some states do not treat these as enforceable quotas while others mandate that government agencies do set aside a number of designated contracts for [minority businesses]. States with set-aside programs certify minority-owned businesses as such to ensure that participation in the program is limited to the group it was designed to assist.”
The NCSL lists Connecticut, Illinois, Ohio, New York and New Jersey as a sampling of states with programs that aim for connections by minority- and women-owned businesses. In Kessler’s Inc.com story, Maryland is featured for its “legally mandated program that requires 25 percent of all government contracts to be filled by minority-owned businesses.”
“It really is a gateway for Maryland businesses to access state and local contracting opportunities,” special secretary Jenkins says in the story.
Eligibility and more information: Most state programs require at least 51 percent of the business to be owned by a minority group member, Kessler reports. A good resource for more information is through the Minority Business Development Agency, which offers links to state certification programs, along with some city-level programs as well.
