Own a Minority Business? Certify It

Certification brings numerous resources including access to training, networking events, capital loans.

As minority populations within the United States continue to grow, so too do minority businesses. According to the 2007 Survey of Business Owners conducted by the U.S. Census Bureau, minority-owned businesses increased 45.5 percent from 2002 to 2007 from 4.0 million businesses to 5.8 million. These minority-owned businesses accounted for $1.0 trillion in receipts, or 3.4 percent of total U.S. business revenue. 

As these figures are expected to continue to rise over the coming years, corporate America has already taken steps to take advantage of this increasing supply base. Today, many Fortune 1,000 companies have instituted supplier diversity programs in an effort to support further growth of these businesses and to contribute to the diverse economic development of the communities in which minority-owned businesses operate. These efforts, however, are not limited to just the private sector. The Michigan Department of Transportation, for example, requires that certain contracts only be awarded to bidders who make good faith efforts to meet the established minority-owned business participation goal set by the department.

In order to take advantage of the many opportunities offered in both the public and private sectors, minority-owned business must seek certification through one of the many certifying organizations.Though certain organizations are tailored to opportunities at the state level, other organizations adopt more of a national approach.

In either case, businesses obtaining certification are generally afforded numerous resources including access to training, networking events, working capital loans and contract opportunities with either large corporations in the United States or other sources of public funding. In Michigan, most minority-owned businesses seek certification as either a “Disadvantage Business Enterprise” through the Michigan Unified Certification Program, available through the Michigan Department of Transportation (mdotjboss.state.mi.us/UCP/), or as a “Minority Business Enterprise” through the Michigan Minority Supplier Development Council (minoritysupplier.org/).

Notwithstanding the various options for seeking certification, generally, the eligibility requirements are the same across organizations. To be eligible for certification, the business must be an independent business concern that is at least 51 percent owned and controlled by one or more racial or ethnic minorities who are U.S. citizens, and whose management and daily operation is controlled by one or more of the racial or ethnic minority owners.

In determining whether the business meets the above criteria, all relevant factors are considered, including the date the business was established, the adequacy of its resources and the degree to which there is reliance on financial resources, experience or expertise or any other relationships with non-minority owners or businesses. Further, most certifying organizations will also require the submission of all corporate records and an on-site interview to ensure compliance.  Often, this process can take 2-3 months to complete. 

Given the increase in opportunities available to minority-owned businesses in both the public and private sectors, the time appears ripe to seek certification as a minority-owned business. Not only will certification provide your business with a potential advantage when it comes to securing new contracts, but it may also afford you with the opportunity to attend networking functions and receive financial and technical assistance. To the extent your business meets the criteria outlined above, and you are looking to develop long-term, mutually beneficial business relationships, certification may provide your business with the necessary opportunities to achieve these goals.