A savvy entrepreneur always knows how to take advantage of all the facilities offered by the law in opening and running a business. For example, social and economic disadvantaged groups – called minority groups – are encouraged to open businesses and get them certified as minority-owned businesses. This certification will give your business preferential access to various educational and financial resources, which we will be talking about in this article.
How to Get Certified as a Minority-Owned Business
The two main authorities that offer the minority-owned certification are the Minority and Women Business Enterprise (MWBE) and the National Minority Supplier Development Center (NMSDC). The criterion for being eligible for this certification is that at least 51% of the share capital of the business should be held by a member of a minority group.
You can claim that you belong to a minority group if at least 25% of your ancestry belongs to the following ethnic or racial groups:
⦁ Native American: any group or tribe of American Indians, Eskimos, Aleuts or Native Hawaiians;
⦁ Asia-Pacific: originating from Japan, Indonesia, China, Malaysia, Korea, Taiwan, Laos, Vietnam, Cambodia, Thailand or the Philippines;
⦁ Asia-India: originating from India, Pakistan or Bangladesh;
⦁ Black: any Black ethnic group of Africa;
⦁ Hispanic: originating from Mexico, Central and South America, or the Caribbean Basin.
You must prove that you belong to any of these races or ethnicities with official documents in order to be recognized as a minority group member.
Now let us see why it is worthwhile to get your business certified as minority owned:
1. Financial Assistance
Minority-owned businesses are granted access to specific loan programs with low interest rates or even grants. These loans are grants are available through third party affiliates of the MWBE and NMSDC. This is one of the most important facilities granted to minority business enterprises in a general effort to offer disadvantaged social and ethnic groups the opportunity to grow and improve their lives through entrepreneurship.
2. Ongoing Education and Technical Assistance
As a member of MWBE or NMSDC, you are eligible to take part in various training courses and business seminars. What’s more, through the 8(a) program developed and maintained by the Small Business Administration, you will be connected to top mentors in your industry who will help you acquire the technical skills you need to run your business.
3. Access to Databases
Minority-owned businesses can access large databases, which are also used by large corporations in the US. These databases will list your company’s description and contact details, helping potential customers find you, but also allowing you to seek business opportunities and customers on your own.
4. Enlarging Your Network
As a member of minority-owned business associations, you will be invited to attend various business and educational events, meet other entrepreneurs and form partnerships or simply exchange ideas. Networking is the key to success in the modern business world, where everything is interconnected.
5. Obtain Government Contracts
This is a special facility reserved for minority-owned businesses. Once your business has grown enough to be able to tackle complex contracts, it can benefit from special set-asides which include being on a preferred list of suppliers for government agencies.
As you can see, there are so many advantages to being certified as a minority-owned business, so it is really worthwhile taking the time to obtain this certification.