How To Get Certified As A Minority Owned Business

In the last 10 years, minority businesses have accounted for more than 50% of the two million new businesses started in the U. S. Here's how to get certified as a minority-owned business and how it can help your business.

This article is for educational purposes and does not constitute legal, financial, or tax advice. For specific advice applicable to your business, please contact a professional.

In the past 10 years, minority businesses have accounted for more than 50% of the two million new businesses started in the U.S. Despite this, minority businesses are less likely to receive financing.

There are resources available to help minority-owned businesses access partnership opportunities, guidance, and more. Here's how to get certified and how it can help your business.

Why should you certify your business as minority-owned?

There are several reasons you may want to consider a minority-owned business (MBE) certification. Beyond letting your customers know what kind of business they are supporting, an MBE certification could give your business access to both private and government grants and contracts.

There are many organizations that are looking for business opportunities with minority-owned businesses, and some even have dedicated budgets to do so. Registering as a minority-owned business gives your small business an opportunity to work with these organizations.

What are the qualifications for a minority-owned business?

According to the U.S. Chamber of Commerce, there are qualifications that your business will need to meet to be considered a National Minority Supplier Development Council (NMSDC) certified minority-owned business. The NMSDC is the largest certification body for minority-owned businesses. It currently matches 13,000 certified minority-owned businesses to a network of 1,500 corporate members that includes Amazon, Target, Apple, and FedEx, among others.

Qualifications

You must be a United States citizen.
Minority businesses must be at least 51% minority-owned, managed, and controlled. A minority group member is defined as at least 25% Asian-Indian, Asian-Pacific, Black, Hispanic, or Native American.
Business must be for-profit and physically located in the United States or its trust territories.
Management and daily operations must be exercised by the minority ownership member or members.

Along with these qualifications, you'll need to show documentation that includes proof of citizenship, a driver's license, and financial statements, among other documents. These documents will vary by business type.

Look into federal, state, and local certifications

There are federal, state, and local certifications for minority-owned businesses that may give you access to different contract opportunities. Each state, and some cities, have earmarked a certain percentage of their budget to go to minority-owned business contracts. Here are a few examples of state and local programs to look into:

California: There are several different state-specific programs and certifications for minority-owned small businesses in California. The Utility Supplier Diversity Program is focused on services and utilities, while the Southern California Minority Supplier Development Council is focused on certified minority-owned businesses.

Connecticut: Connecticut has Set-Aside Program which mandate of 25% of government contracting for small and minority-owned businesses. The state has both small business enterprise and minority business enterprise program certifications.

Illinois: Illinois sets aside a goal of 20% for Business Enterprise Program businesses. This program is for businesses owned by minorities, women, and persons with disabilities.

Ohio: Ohio has a state target of 15% for Minority Business Enterprise Program contracts. They also offer an Encouraging Diversity Growth and Equity (EDGE) program that focuses on economically and socially disadvantaged businesses.

New York: In 2014, New York set a 30% state target for minority-and women-owned businesses as well as a 6% target for veterans with disabilities-owned businesses. More than $3 billion in state contracts were awarded to qualifying businesses in the 2019 to 2020 fiscal year.

New Jersey: New Jersey has a 25% set-aside goal for small businesses. These small businesses include small business enterprises, disabled veteran-owned businesses, veteran-owned businesses, and minority or women-owned businesses.

Small Business Administration 8(a) Business Development Program: While registering as a small disadvantaged business does not require minority ownership, showing that the business is 51% owned and controlled by people who are socially and economically disadvantaged is part of the criteria.

If you're looking for state-specific programs, a good resource is the Small Business Administration list of government contracting and business development resources. Each state and city may have different programs and set-aside budgets for minority-owned businesses, so be sure to search for what is available in the area you are running your small business.