Governments and corporations around the United States often set aside a percentage of their contract budgets exclusively for minority-owned businesses. These entities want to ensure they are doing their part to buy from a broad set of suppliers that better represent all communities.
However, if a business wants its operation to be formally recognized as a minority-owned business or enterprise, it should seek to get an official certification. This shows first that the business is credibly established and second that it is ready to work with large public and private entities.
Read below to learn about how to get certified as a minority-owned business and how this certification can help a business get more contracts from large companies and governments.
Get to know the National Minority Supplier Development Council
When it comes to getting certified, businesses first need to know more about the National Minority Supplier Development Council (NMSDC), the largest and most prominent certification body for minority-owned businesses. The organization says it has an “unwavering commitment to advance Asian, Black, Hispanic, and Native American suppliers in a globalized corporate supply chain.”
The NMSDC has a network of 12,000 certified minority-owned businesses that can then be connected to more than 1,400 large corporate members. NMSDC certification also holds a lot of weight in government circles, with many states and cities accepting NMSDC certification to help with public-sector contract selection.
Corporate membership of NMSDC includes many of the largest privately owned companies in the world, including Accenture, Apple, Bank of America, Delta Airlines, Facebook, Google, GM, Microsoft, Nike, Raytheon, UnitedHealth Group, Walmart and Walt Disney Company. These member companies use the NMSDC directly of minority-owned businesses to research companies and award contracts.
The NMSDC has a network of 12,000 certified minority-owned businesses that can then be connected to more than 1,400 large corporate members.
How to receive NMSDC certification
For businesses seeking NMSDC certification, the organization offers a relatively easy process to apply. They will go through the following steps:
- Review the certification criteria to make sure the business qualifies. These criteria include that business owners must be U.S. citizens, the business must be located in the U.S., and the business must be at least 51% minority-owned operated and controlled.
- Gather required documentation including certificate of incorporation, articles of incorporation, stock certificates, stock ledger, bylaws (executed and attested), and amendments (if applicable).
- Complete the online application, which must be completed on the website of the regional NMSDC affiliate closest to your business headquarters. Find the closest regional affiliate here.
- Pay the application fee, which must be paid online via credit card.
- Upload all required documentation needed to finish the application.
- Schedule a site visit and interview, which will be performed by an NMSDC Certification Specialist.
The NMSDC certification process can take up to 90 days to complete. Once a business has sent in all application materials, it will be reviewed by the NMSDC Certification Committee. If the Committee approves the application, it will be submitted to the NMSDC Board for final approval. If the Board rejects the application, a business can submit a letter appealing the ruling that addresses concerns. If it approves the application, you will receive a notice via email.
Federal and local certifications
On top of the NMSDC certification, a minority-owned business may also seek out certification from other entities, such as the Small Business Administration (SBA) or individual cities and states in which they are located.
Specifically, the SBA offers a certification called 8(a). Businesses with 8(a) certification are eligible to win federal contracts that are reserved for “small disadvantaged businesses.” The federal government has a goal of awarding at least five percent of contracting dollars for business with 8(a) designation. While 8(a) businesses do not necessarily need to be minority-owned businesses, all companies with 51% minority ownership are likely eligible according to federal regulations.
When it comes to states, Ohio is an example of one that has its own Minority Business Enterprise (MBE) certification process. Once certified in Ohio, minority-owned businesses can win contracts from state agencies, boards and commissions. The state has a goal of awarding 15% of contracts to MBEs. Many other states have these types of certifications as well.
Finally, when it comes to city-level certification, Chicago is a prime example. Chicago has its own Minority and Women-Owned Business (M/WBE) Certification Program. Approved certifications are valid for five years and businesses that are approved have access to bid on large city contracts. Other cities such as Austin, Houston, Indianapolis, Memphis, and New York City offer similar certification programs.
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