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Why is it important for minority businesses to certify?

Updated: Sep 10, 2020

Minority owned business certification, often referred to as Minority Business Enterprise (MBE) Certification, is generally restricted to businesses who are at least 51% controlled by a minority owner. Minority business owners, for the purposes of certification, include African-Americans, Latino, Pacific Islander, Asian, and Native American owners.

The process of becoming certified as a minority-owned business for the purposes of participating in special programs like those offered by the NMSDC and the SBA’s are significant, but the benefits of being a minority-owned business with certification are vast. From federal and government agencies to private corporations, there are many organizations that want to do business with minority-owned businesses and would prefer to do so when your business is certified.

Certification may provide your business with opportunities it might not otherwise be able to compete for. Minority-owned businesses that are certified can take advantage of special government programs, including increased access to government contracting opportunities that can help them grow quicker.

Many federal government agencies are even mandated to reward a substantial number of contracts to certified minority-owned businesses. 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.

The rise of minority business certification programs comes from the resounding business benefits that arise from pursuing a supplier diversity strategy. In other words, companies that embrace diversity are more profitable than companies that don’t. But the benefits extend beyond profits. When governments and businesses are fostering more diverse, inclusive supply chains, everyone wins. As a result, there are numerous supplier diversity initiatives found throughout government and private business. These programs are formal, intentional efforts to contract with disadvantaged business owners.

And that’s why minority business certification is important. It authenticates that the business is owned, managed, and controlled by a minority and opens the door to participating in government and corporate supplier diversity initiatives, where new relationships and bid opportunities await.

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