The benefits of being a minority-owned business in 2023
Tue | April 2022
Embracing diversity and promoting inclusivity is at the forefront of the modern business landscape. According to the US Senate Committee on Small Business and Entrepreneurship, minority-owned business owners have created over 50% of the 2 million new businesses in the US these past ten years. We're here to explain the benefits and opportunities you can unlock by certifying your business as a Minority Business Enterprise (MBE)
An MBE certification, often facilitated by organizations like the National Minority Supplier Development Council (NMSDC) or local government bodies such as the SBA, serves as a testament to the business's ownership and opens the door to exclusive resources, networks, and potential partnerships that can significantly contribute to business growth and success.
Read on to understand if your business qualifies for an MBE certification and how it can be a strategic move to elevate your business to new heights.
Understanding Minority Business Enterprise (MBE)
The National Minority Supplier Development Council (NMSDC) defines a minority business enterprise (MBE) as a United States citizen who is Asian-Indian, Asian-Pacific, Black, Hispanic, or Native American. Ownership by minority individuals means the business is at least 51% owned, managed, and controlled by such individuals.
MBE certification can help MBEs access federal grants, mentorship, and contracting opportunities from private corporations. Prominent corporate members of the National Minority Supplier Development Council (NMSDC), such as Microsoft, Starbucks, and Johnson & Johnson, are willing to invest in minority entrepreneur growth.
How do I get certified as an MBE?
Check if you qualify. The minimum requirements to qualify as an MBE with the National Minority Supplier Development (NMSDC) are:
You must be a United States citizen.
You must be a minority group member, defined as someone at least 25% Asian-Indian, Asian-Pacific, Black, Hispanic, or Native American.
Your business must be at least 51% minority-owned, managed, and controlled.
Your business must be a for-profit enterprise and physically located in the United States or its trust territories.
Gather the required documents. Some documents your business must submit are business ownership documents, financial statements, and tax returns. You can find a list of the required documents on the NMSDC website.
Fill out an application. You can find the application on the NMSDC website.
Submit your application to a council affiliate. The NMSDC has a network of regional affiliates across the United States. You can find your closest affiliate on the NMSDC website.
Undergo a review process. Once you submit your application, it will be reviewed by a council affiliate. The review process may include an interview and a site visit.
Get certified. If your application is approved, you will be certified as an MBE.
Getting certified as an MBE can be a valuable tool for minority-owned businesses looking to grow and succeed. The certification process can be time-consuming, but it is worth the investment for its benefits.
Top benefits of MBE certification
MBE certification offers a range of benefits that can help minority-owned businesses thrive in today's competitive market. Here are some of the top benefits:
1. Government Aid and Grants
You've unlocked access to federal government aid and grants if your business has been granted federal certification as a minority business. So, let’s see which one best hits the spot for you:
MBDA Grants and Loans: You can access more than 1,000 grant programs and around $500 billion in MBDA Grants. Before applying for any MBDA grant on the Grants.gov site, you’ll have to get a unique DUNS identifier number and register at SAM.gov.
Local grants: Many states also have special financial aid programs for minority businesses that belong to specific groups. For example, New York sponsors a Minority and Women-Owned Businesses Certification Program (M/WBE). Other states like Ohio open the percentage of government contracts available for all MBE-qualified entrepreneurs. Contact your local State Office for Minority and Women Business Enterprises to learn about additional financial aid opportunities.
Business Consortium Fund: NMSDC-certified businesses can get exclusive access to financing programs, micro-loans, and consulting opportunities through the investors who participate with the National Minority Supplier Development Council Business Consortium Fund, Inc.
2. Workshops, Training, and Coaching
Workshops, training, and coaching can help minority entrepreneurs develop the skills and knowledge they need to start, grow, and succeed. Many programs are available, so you can find one that meets your needs and interests:
The 8(a) Mentor-Protégé Program: There is nothing better than getting personalized guidance to meet all SBA requirements and qualify for federal aid. This option also connects you with entrepreneurship classes, marketing tips, and counseling.
The NMSDC Kellogg Advanced Management Executive Program is a four-day immersive program that allows minority entrepreneurs to work on their businesses in an interactive environment instructed by educators and professionals with real-world experiences.
The Minority Business Executive Program (MBEP) at the University of Washington helps minority business owners develop the skills and knowledge they need to succeed, including business decision-making, strategic planning, and technology adoption.
Advancing Black Entrepreneurs: Free on-demand online classes, resources, and training sessions specifically aimed at black entrepreneurs.
3. Networking Opportunities with Minority Businesses
MBDA Business Centers: The MBDA also networks minority business owners with contract opportunities. Through these local business centers, you can associate with the right strategic partner and learn how to reach new domestic and global markets.
Center for Excellence program: This annual virtual education program sponsored by the NMSDC connects minority businesses with mentors to prepare them to lead in a global environment and diversify associations with minority suppliers.
The NMSDC Network: Once you get NMSDC certification, you’ll be able to associate with more than 1,500 corporate members, including top national public and private company CEOs.
SCORE: This government entity provides the most extensive network of free volunteers for business mentors in the nation. No matter if you’re a minority-owned business or not, you’ll be able to answer your doubts about being a business owner. On their page, they also provide networking opportunities for specific minorities, such as Latino and Hispanics, and Black entrepreneurs.
4. Access to financing and working capital
Minority-owned businesses are the fastest-growing sector in the US. Still, sadly, there is a significant barrier to them reaching their full potential- access to working capital. Because of the lack of funding options, minority entrepreneurs count on short-term debt to finance their businesses. After being denied credit from traditional entities, they turn to revolving credit lines or personal credit cards.
We have a better option! One Park Financials' working capital programs! At One Park Financial, we've worked with minority-owned businesses for over a decade. What makes OPF different? We provide guidance, quality customer service, and a seamless online funding experience.
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Disclaimer: The content of this post has been prepared for informational purposes only. It is not intended to provide and should not be relied on for tax, legal, or accounting advice. Consult with your tax, legal, and accounting advisor before engaging in any transaction.