How to Get Your Minority Owned Business Certification

Becoming a certified minority owned business may seem like an insurmountable task with all the political jargon getting thrown around and the extensive list of eligibility requirements, but I promise you, it is much easier than it looks.

Currently, in the United States, there are about 3 million minority owned businesses enterprises, which make up about 15 percent of the nations total businesses.

I’m sure you might be wondering what exactly it means to be a certified minority owned business and how it can help you. To start off, a minority owned business is a company that is 51% owned and controlled by U.S. citizens who are either Asian, Black, Hispanic or Native American. 

The federal government, state agencies and corporations all are eager to work with minority owned businesses. This eagerness stems from two things. First, these corporations understand the law of attraction. Meaning, if they want to get business from different minority groups and attract them as customers, contracting with minority owned businesses is essential.

Second, it is their obligation. The government and large corporations have a duty to make sure that every business is given an equal opportunity to participate in contracts that are paid for by the public's tax dollars. 

These programs enable firms — in the private and public sector — to search for certified minority owned businesses.  So that means if your business is not certified, you might miss out on lucrative business opportunities and partnerships.

The first step in getting certified is to figure out which minority-owned business group you would fit into. There are 3 types of minority-owned businesses:

• Minority-Owned Business Enterprise (MBE);
• Disadvantaged Business Enterprise (DBE); or
• Economically Disadvantaged Small Business (8(a)), which are categorized by their size and net worth.

MBE Requirements:

• Minority group members are United States citizens who are Asian, Black, Hispanic, or, Native American;
• Be at least 51 percent owned and controlled by minorities for at least 6 months;
• Have a minority serving as president and CEO (if both positions exist) for at least 6 months;
• If the business is a publicly owned business, a minority must own at least 51% of the stock; and
• Have minority owners actively involved in daily management.

DBE Requirements:

• All MBE requirements;
• The business must be controlled or managed by individuals who are socially or economically disadvantaged;
• An individual personal net worth cannot exceed $1.32 million;
• The small business must meet the SBA Size, annual gross income cannot exceed $23.98 million; and
• The small business must be independent of any other company.

8(a) Requirements:

• All MBE requirements;
• Owners must be citizens by birth or naturalization;
• The business must be controlled or managed by individuals who are socially or economically disadvantaged;
• Principals must show good character;
• Must be owned by someone with $4 million or less in assets;
• Must be owned by someone whose personal net worth is $250,000 or less;
• Must be owned owned by someone whose average adjusted gross income for three years is $250,000 or less; 
• The business must demonstrate the potential for success; and
• The minority owner must manage day-to-day operations and make long-term decisions for the company.

To start off, becoming a certified owned business has multiple benefits: profit, visibility, a sense of community and uncapped growth. Getting certified plays on the supplier diversity strategy. Meaning, companies are eager to embrace minority owned businesses because it turns a bigger profit for them.

Government and state agencies as well as corporations set goals for conducting business with and buying from minority-owned businesses, so regardless of the sector your business works with, getting certified will instantly boost your business.

There are several certificates available for different kinds of minority-owned businesses. Here are 3 of the major players:

1) The National Minority Supplier Development Council (NMSDC): Minority Business Enterprise (MBE): 

NMSDC is an organization that helps certified MBEs secure new business opportunities and connects them to corporate members and private sector buyers within their network. This is the best program for businesses that want to connect with private-sector buyers. 

To begin the process, first you should review the criteria and make sure that your business qualifies as an MBE. Then, you should gather all required documentation and complete the application in full.

The MBE certification process can take up to 90 days. However, if you need more time, that is completely fine! You are able to take as long as you need to complete the application. Before you begin the online application, you will need to register on the NMSDC website.

The application fee for the certificate must be paid online via credit card. The processing of your application will begin when payment is received and then it will be scanned for all necessary documentation and completeness. You can upload all the required documents directly on the online application. 

Once all the necessary documents are uploaded and your application is completed in its entirety, you will be required to schedule an on-site visit and interview with an NMSDC Certification Specialist. You can start your application process here.

Cost: Fee varies depending on location.

You can view the breakdown of the eligibility requirements for the NMSDC Minority Business Enterprise eligibility here.

2) The U.S. Department of Transportation (DOT): Disadvantaged Business Enterprise (DBE): 

The U.S. DOT created DBE, a government affiliated program that is developed to rectify ongoing discrimination and the lasting implications of past discrimination in federally-assisted highway, transit, airport, and highway safety financial assistance transportation contracting markets throughout the United States. 

The process is quite simple. In order to participate in contracts, you must meet the eligibility requirements for the DOT: DBE. Then, you must contact your specific state or local transportation organization.  

You will be asked to provide necessary documentation that substantiates your firm's size, owner's personal net worth, independence, and an individual's ownership and control over the business. After this documentation is reviewed, recipients are required to perform an on-site visit to the firm's offices and job sites to conduct an in person interview.

If you wish to receive further instructions on how to apply to this program, you can contact your state DOT. You can begin your application on the DOT website. 

Cost: Free. 

You can view the breakdown of the eligibility requirements for the DOT Disadvantaged Business Enterprise eligibility here.

3) The Small Business Administration (SBA): 8(a) Business Development Program: 

The 8(a) Business Development Program is a government affiliated program that helps even out the playing field for small minority owned businesses.

If your business works with government entities, the U.S. SBA offers its own certification, the 8(a) program, which is more rigorous than the other two. This program is great for businesses that want to do business in the public-sector. 

In order to participate in the program, first you need to get certified as an 8(a) business. You can do this by visiting the SBA website. 

You’ll need to create a profile at SAM.gov before you can begin using the certification website. The required information varies depending on your business structure and your participation in other SBA programs.

After you successfully complete your certification process, the next step is to update your business profile at SAM.gov. This will show contracting officers that your business is now in the 8(a) program and eligible to do business with.

You will be notified by mail whether or not your application was approved. If you’re accepted into the program, you should check profile in the Dynamic Small Business Search and make note of your approval date and exit date for the program.

The 8(a) certification will last for a maximum of 9 years. In order to keep your business in good standing in the program, you will need to complete mandatory annual reviews.

Cost: Free.

You can view the breakdown of the eligibility requirements for SBA 8(a) Business Development Program eligibility here. 

Certification Benefits

Each certificate comes with its own unique advantages, but there are some universal ones that apply to all the programs. With these certificates, minority owned businesses are granted access to private and government contracts. This is great for new or smaller businesses because it gives you a competitive edge. 

Becoming certified, places you into a network of other minority owned certified business and establishes a sense of community. You are able to meet, connect and partner with other business owners who have similar backgrounds and experiences.

Becoming certified is also great for marketing your minority owned business. Marketing is a necessary expense for all businesses, but it doesn't have to break the bank. In addition to getting certified, there are plenty of inexpensive marketing ideas that will attract the public's interest. However, getting certified is a great first step.

As mentioned before, becoming a certified minority owned business enables you to leverage the supplier diversity strategy. In other words, companies want to diversify the who they do business with because they will receive monetary benefits.

Gaining visibility as a minority owned business can be challenging, but getting certified helps to tackle this struggle. Becoming certified enables businesses to gain access to large companies, which increases your business’s exposure and gets your name out there. The goal is to list the names of large businesses and major corporations on your client list and with these programs, that becomes possible.

Helpful links:

The National Minority Supplier Development Council (NMSDC): Minority Business Enterprise (MBE)

The U.S. Department of Transportation (DOT): Disadvantaged Business Enterprise (DBE)

The Small Business Administration (SBA): 8(a) Business Development Program