There's a multibillion-dollar pie that comes from government and corporate contracts targeted to minority-owned businesses. A variety of federal, state and local government agencies offer minority business certification programs in an effort to help businesses qualify. Before going through certification, investigate:
- Criteria to qualify
- Documentation requirements
- Consider whether it's worth it
Decide if certification is for youThe process does take some time and effort, can cost up to $350, and periodic renewal fees may be required, which is why so many small businesses never take advantage of the opportunities brought by being designated a minority business. You should decide which certifications are the best for you.
Discover the Minority Business Development Agency (MBDA)It's part of the U.S. Department of Commerce and it has a Web portal that can plug you into a vast pool of minority business development knowledge and opportunity.
MBDA online tools are all free to use. The MBDA Community Exchange is a place where minority-owned businesses can meet online and exchange ideas and information by categories and topics.
Register with the MBDA's Phoenix DatabaseThe MBDA Phoenix Database is a free online bid matching system that allows you to register your minority company. By using the Phoenix tools, you can locate and access contract opportunities and other information. You can also post opportunities and seek business partners.
Register with the Phoenix Database at the MBDA Web site.
Know what counts for certificationEach certifying entity will have its own criteria. But generally, you will need proof that you exist as a small business and show that 51 percent of the business is owned, controlled and actively managed by minority group members.
Plug into the federal certification process via the U.S. Small Business Administration. The online publication Ethnic Majority has information on state-sponsored and local programs, and for corporate supplier diversity programs.
Prepare your documentsAnticipate being asked about your business' history, legal and financial structure. You could be asked for customer and bank references, details about loan activity, financial statements, balance sheets, tax returns, professional or business licenses, real estate leases, a list of employees, your driver's license and more.
For more on the certification process, review this information from Key Bank. The National Association for the Self Employed maintains a women's resource center with other valuable tips. Proper forms are available from the SBA.
Register your business wherever you canGovernment programs aren't the only place to plug into potential contracts.
DiversityBusiness.com maintains a directory of suppliers and serves as a kind of online matchmaking service between big corporate or government buyers and small business suppliers.
- The SBA's factors for evaluating "potential for success" include the firm's financial capacity, ability to access credit and capital, and the technical and managerial expertise of the firm's managers.
- The SBA will want to see that you have been in business for at least two years, with income verified by income tax returns for each of the previous two years.
- The certification process may include a site visit from the certifying body, so be prepared.