Starting a business as a person of color is a major feat. But your journey isn’t over yet — the next step is keeping your doors open long term. Doing this requires continuous capital, networking, and growing your marketing efforts.
The good news: You don’t have to do this all on your own. Programs exist specifically for minority business owners that can propel their companies forward. If you’re not already a certified minority-owned business, you’re missing out on opportunities for growth.
What is minority-owned business certification?
Minority-owned business certification, also known as Minority Business Enterprise (MBE) certification, is the official recognition that a company is owned by a particular minority group or individual, including:
- Black Americans
- Native Americans
- Hispanic Americans
- Asian Americans
- Pacific Islander Americans
To qualify, the person has to be a US citizen or resident. Some minority business owners seek certification to:
- Build their reputation
- Showcase company pride
- Make public its company ownership
- Be a role model and promote others to follow in their footsteps
- Increase their knowledge and skills
Certificate programs are available in every state. Local governments run most of these programs, but some private organizations also offer MBE certifications.
These programs aim to help minority business owners grow their businesses through education, mentoring, financing, and other resources. After certification, you can receive these benefits through a local or national organization.
For example, Mid-States MSDC offers coaching, networking events, business opportunity fairs, and executive training to certified minority businesses throughout America.
State or local programs, like the New York and New Jersey Minority Supplier Development Council, offer MBE certification and access to events, procurement fairs, and seminars.
Here’s a list of other national organizations:
- Black Business Association (BBA): Offers events, training, networking, and helps shape policies that can benefit Black-owned companies nationally
- National Hispanic Business Group (NHBG): Offers MBE-certified Hispanic businesses access to events, education funding, and networking opportunities
- National Minority Supplier Development Council (NMSDC): Offers access to contract opportunities, business fairs, educational programming, and networking
- Minority Business Development Agency(MBDA): Helps MBE-certified businesses with training, capital, technical assistance, and access to new markets
- US Small Business Administration (SBA): Makes government contracts and mentorship programs available to minority-owned businesses certified through the 8(a) Business Development Program
- US Black Chambers: Gives access to networking and advocacy opportunities, educational webinars, podcasts, and financing to MBE-certified Black business owners
- US Hispanic Chamber of Commerce: Hosts events, offers online programs, and gives access to capital for Hispanic businesses
- US Pan Asian American Chamber of Commerce: Provides education, contracts, and investor connections to MBE-certified Pan Asian American business owners (includes Pacific Islanders, South Asians, East Asians, and Southeast Asians)
Minority-owned business certification benefits
Minority-owned business certification is an official designation given to a business owned by people who are racial or ethnic minorities.
One benefit is that certified companies get a leg up in the competition for government contracts and other business opportunities.
For example, government and corporate companies set aside a percentage of their budgets each year to go toward minority-owned businesses. Philadelphia awards 35% of city contracts to minority, women, and disabled-owned businesses.
In 2020, Wisconsin gave 5.4% of state agency contracts to minority-owned businesses.
Becoming a certified minority business owner qualifies you for federal and state contracts and other corporate opportunities.
Organizations look for certified minority businesses to build a diverse supply chain, increase partnerships, and foster economic growth. Plus, some governments reward companies that hire minority businesses.
For example, in Georgia, companies that subcontract to certified minority business owners receive a tax break of 10% for up to $100k in payments to the subcontractor.
As a certified minority-owned business, you also get access to:
- Entrepreneurship coaching and/or classes
- Network of other like-minded entrepreneurs
- Grants and minority business loans
Note that there are various programs available to certified minority businesses, which will determine what benefits you’ll have access to.
How to get minority-owned business certification
To qualify for a minority-owned business certificate, you must meet the following requirements (depending on where you get certification from):
- Business is 51% owned by a person or group of people who are at least 25% minority (e.g., Native American, Black American, Asian American, Pacific Island American, or Hispanic American)
- Minority owners must take part in the daily operations of the company and have executive officer status and technical experience or expertise in the industry
- Be a for-profit business stationed in the US
- Be a legal resident (green card holder) or citizen of America
The certificate lasts for one year, so you must renew annually using recertification applications.
Minority-owned business certification application
Where you apply for a minority-owned business certificate will determine the process. For example, here’s how the process looks if you apply for a certificate through the NMSDC:
- Register on the website for the regional council you’re applying to
- Fill out your application online (can save and come back if needed)
- Submit the application, along with the fee
- Wait up to 90 days for the application to process
- Documents are reviewed and a site visit is conducted (minority owners may be required to be present)
- Certification Compliance Committee meets to go over applications before submitting it for final approval by the board
- If approved, you’ll receive a notification from your regional affiliate
- If you’re rejected, then you can submit a letter to appeal their decision
To complete the NMSDC application, you must include documents, such as:
- Complete application for certification
- Notarized affidavit or declaration page
- Your Doing Business As (DBA) or fictitious business name statement if you have one
- Proof of US citizenship or residency (e.g., US passport, voter’s registration card, birth certificate)
- Proof of your ethnicity (e.g., original birth certificate)
- Two years of federal tax returns for the business
- Current financial statements (e.g., profit-and-loss statement)
- Occupational licenses (if it applies to your industry)
- Proof of Employer Identification Number (EIN)
- Lease agreement if you’re renting a location to operate your business
Each program has its own application requirements, so do your own due diligence when applying.
Minority-owned business certification cost
The cost of applying for a minority-owned business certificate varies based on the local certifying office. For example, if you apply through the Georgia Minority Supplier Development Council, then the initial application fee is $600, then $350 to reapply.
There are also programs that’ll reimburse you for the minority-owned business certificate fee. For example, the National Minority Supplier Development Council has a Certification Reimbursement Initiative with several partners, including:
You can apply with one of these organizations to get a reimbursement for the certification fee. However, you must apply for certification through their organization. For instance, JPMorgan Chase offers a first-come-first-served application process for eligible MBEs that have had their applications approved through them.
You must also meet certain requirements to qualify for certification and reimbursement from JPMorgan Chase, like:
- Annual revenue of at least $100k
- Two or more years in business
- US citizenship
- 51% minority-owned, managed, and controlled
- For-profit, independent company in the US or its territories
- Minority owners manage and operate the day-to-day activities of the business
If you’re eligible, you can apply for the certificate and request reimbursement at once. You’ll receive an email confirming receipt and that it’s under review.
After review, one of the following will occur:
- You’re approved and will be connected with a regional affiliate council to start certification
- You’re not approved, but you’re eligible for a different reimbursement program and will be connected with a regional affiliate council to start the process for certification
- You’re not eligible at all for certification or reimbursement, and your application process will discontinue
Other organizations on the list have different criteria — for example, Lowe’s requires that you have revenue under $3m and prefer retail businesses (although not required). Plus, it’ll reimburse two years of your certification fees.
Check with each company to see which you qualify for and have higher odds of getting approved.
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