By Kim Folsom
Getting certified as a minority-owned, woman-owned, or veteran-owned business can be difficult. It takes some persistence, but the benefits can be well worth it.
Getting certified can open the door to faster, more lucrative sales and government contracts. Plus, once you’re in a certification group, you typically get access to resources, networking events, and executive education programs.
For example, most federal, state, and local governments have mandated purchasing goals that require them to purchase from minority groups. The federal government has a mandated goal of awarding 5% of eligible prime contracting dollars to women-owned small businesses. Many large companies also have initiatives to work with minority-owned businesses. Target and Starbucks work with women-owned businesses that are certified by the Women’s Business Enterprise National Council (WBENC).
So what can you expect when you get certified? Here are just some of the benefits:
More support and business connections
You get connected to a group of people that want to help you succeed. Doors open and contacts are made between certified businesses. If you feel like you’re on an island right now as a minority owner, you might not anymore. And you might be able to do business with your peers as well.
More government contracts
Government agencies have statutes in place that ensure they do business with certified minority businesses. You might find your company being far more competitive than you ever imagined. RFPs (requests for proposals) that you might have given up on in the past suddenly become more viable.
More access to large corporations
Likewise, many Fortune 500 companies have minority contracting programs that help you get in front of decision makers.
More focused marketing
Having a certification, and being able to advertise it, can give you a leg up when serving specific communities, especially if your business is located where minorities live.
As you can see, getting certified gives you the opportunity to have more contacts, apply for more contracts, and get access to more customers. In a hyper-competitive business world, every little edge you can get helps.
There are state and local certifications that can be helpful if you only work in a specific area. However, national certifications can open up bigger markets. Here is a quick look at some of the top certification options and their criteria.
General certification criteria for women-owned businesses:
- Women-owned businesses at least 51% controlled by women who are U.S. citizens.
- A woman (or women) must manage the day-to-day operations and a woman must hold the highest officer position in the business and work at the business full-time.
- A woman and a man can own the company jointly, but the woman must be the majority owner and demonstrate her management and control of the company.
Certifiers include the Women’s Business Enterprise National Council (WBENC) and the National Women Business Owners Corporation (WBOC), which is also a certifier of veteran-owned companies. The SBA offers a Women-Owned Small Business (WOSB) designation for federal contracts as well. See each organization for its specific criteria.
General certification criteria for minority-owned businesses:
- Minority businesses must be at least 51% minority-owned, operated and controlled. (Typically a minority group member is an individual who is at least 25% Asian, Black, Hispanic, or Native American.)
- Must be a profit enterprise and physically located in the U.S. or its trust territories.
- Management and daily operations must be exercised by the minority ownership member(s).
- Must be U.S. citizen
The National Minority Supplier Development Council (NMSDC) is the most prominent certifier, with a network of 12,000 certified minority-owned businesses that can be connected to more than 1400 large corporate members.
The Veteran Owned Small Business (VOSB) diversity designation is granted under the Veteran Benefits, Health Care, and Information Technology Act of 2006. It gives qualified companies preferential procurement contracts. Certification requirements include:
- Company must be 51% owned, operated, and controlled by a veteran
- Veteran has full control of day-to-day management and works full time in the business
- Veteran is the highest-paid person in the company and holds the highest officer position in the company
- Company must meet the small business requirements established by the Small Business Administration (SBA)
We’re just scratching the service of women, minority, and veteran business certifications. There are a lot of avenues you can take if you’re a member of one of these groups and manage a business. Getting certified takes time and effort, but it can be worth it to open up new opportunities and give you access to more clients and customers.
Since 2015, Founders First, has helped accelerate the success of hundreds of small, service-based, business-to-business companies through our accelerator programs. Our companies are run by women, people of color, military veterans, and members of the LGBTQ community. We have a focus specifically on lifting up these groups that have been dramatically underrepresented in the ranks of business leadership and without access to growth capital. Visit our website to learn more.