Become a Certified Minority Business Enterprise: What You Need to Know

 

Minority business firms "accounted for more than 50% of the 2 million new businesses founded in the United States and produced 4.7 million employment during the last ten years," according to the U.S. Senate Committee on Small Business & Entrepreneurship.

Even though there are over 4 million minority-owned businesses in the country, the Minority Business Development Agency of the U.S. Department of Commerce has published data that reveals startling facts that further the systemic injustice faced by minority-owned firms:

Compared to white business owners, minority-owned companies are less likely to be authorized for funding, especially if their yearly sales are under $500,000.

Smaller loan amounts, higher interest rates, and quicker payback terms are given to minority-owned enterprises.

Non-white people depend less on savings and have less collateral to use as security for loans because they have a lower net worth.

Numerous companies, such as Facebook, Microsoft, Google, and others, publicly pledged to promote Black entrepreneurs in various ways in 2020. While everyone is keen to change the way that excluded populations are viewed in terms of equity, others have stated extremely specific prerequisites for entry. The company's certification as a minority business enterprise, or MBE certification, was one of the most important conditions that were highlighted.

An accredited minority business enterprise is what?

A business is referred to as a certified minority business entity if at least one of the following groups owns, manages, and operates at least 51% of it:

Black Americans

Despite not being from the Iberian peninsula, Hispanic Americans

Asian Americans, including those from the West and the East

American Indians, including Aleuts

You must also fulfill the following conditions for MBE certification:

You must be profitable.

Management of the company and day-to-day operations must be in the hands of a member of a minority group.

A U.S. citizen must be the company's owner.

A city, state, or federal entity will often certify minority business operations, with the National Minority Supplier Development Council serving as the primary certifying body (NMSDC). MBE certification holders can identify themselves, but this won't result in official certification. You can gain access to important stakeholders in procurement for all industries thanks to the formal accreditation, among other advantages.

Following your familiarization with the criteria for a recognized minority business enterprise, consider the following points as you start the application process.

1. After determining your purpose, start your MBE journey.

By providing access for Black and Brown persons who find it difficult to meet with stakeholders or important decision-makers, an MBE certification saves you time and effort. You can get access to portals, directories, and events that might assist you to meet possible partners who could alter your company's income trajectory and expose your firm and its offerings to them.

This is all amazing. There is a significant disclaimer, though. Assumptions can be harmful, but since you're reading this, I'm going to presume you already know what I'm going to say. Instead of making an educated assumption, I will tell you that you must start your trip with an open internal dialogue about your why.

This MBE certification will lose its value if you're a freelancer or business owner that prefers to collaborate with other solopreneurs or small, agile firms. You will find that after spending months and hundreds of dollars on certification, your key clientele does not profit from (or appreciate) working with an MBE-certified diversity supplier or business. They might give you their congratulations on the accomplishment, but they won't give any thought to how your qualification will benefit their company.

2. Think about hiring assistance.

It is a preference, however, I would strongly advise engaging a third-party consultant or organization to guide you through the process of earning your MBE. You will have to submit a ton of paperwork, and the process is fairly drawn out.

The type of documentation required varies depending on the organization you chose to work with to become a recognized minority business enterprise, but the following are examples of core documents for MBE certification:

Business background

The declaration and the bylaws of incorporation (if applicable)

All principals' copies of resumes, licenses, and documentation of their citizenship in the United States

business cards with the principals' corporate titles

Agreements regarding ownership, operation, and control

evidence of broad liability coverage

Security deeds or lease agreements

cancellation of business checks

3. Be patient while filling out the application for a certified minority business enterprise.

My process began in May 2021, and by October 2021, my company had received formal certification. You did read that right. During that period, we also continuously worked on compiling all documentation. No time was lost from working on the process. The National Minority Supplier Development Center estimates that the procedure can take up to 90 days to complete. Given that we started the procedure at the end of May 2021 and gained certification in October 2021, this timeframe would be consistent with how long it took us.

The road to earning your MBE certification is not simple. But if you have a well-defined plan and strategy for your company, it is worth the time and energy you put into it. Getting an MBE certification opens doors for you and the content marketers you work with as part of your team landing structure while also making a difference in the business world concerning diversity and equity.