Five of the Most Common Diversity Certifications for Small Businesses

by Edgar R. Olivo

Do you want to bid on big contracts? One of the most important steps to attract the attention of large companies is to obtain your diversity certification and enroll in the supplier diversity programs your target client offers. A certified diverse business has higher odds of being sought out and found by those programs, which may not even consider your business unless it is officially certified.

The procurement process is the formal method many large companies and government agencies follow to purchase goods and services. A diverse certification is a formal review process to verify a business is 51% or more owned, controlled and operated by an eligible applicant or applicants. An authorized third-party or regulatory agency performs the diverse certification. Companies that are successfully certified are provided documentation in the form of a letter, logo or a certificate.

As a marketing tool, a diverse certification can serve as a critical way to make yourself stand out from your competitors. In addition, a diverse certification can help larger organizations that are committed to advancing a diverse supply chain by purchasing from minority-owned business.

A diverse certification provides many opportunities to grow your business, such as exposure to bid opportunities, networking events, educational advancement and much more. There are a number of supplier diversity certifications based on qualifying classifications, and a business can apply for more than one.

Becoming certified takes time and has associated costs, but the time you spend in earning a diverse certification for your business is well-spent. It is a step closer to winning your next big contract.

There are several nationally recognized certifications for diverse-owned businesses and many local programs available. It is up to you to decide which fits best.

Here are five of the most common diverse certifications available for small businesses.

  1. Minority Business Enterprise (MBE): This certification applies to a business that is at least 51% minority owned, operated and controlled. A minority group member must be a U.S. citizen who is Asian, Black, Hispanic or Native American, or a publicly owned business with at least 51% of stock owned by one or more of the minority group members. You can obtain this certification by the National Minority Supplier Development Council and regional affiliates like the Pacific Southwest Minority Supplier Development Council who work with businesses in Arizona.
  2. Women Business Enterprise (WBE): This certification applies to a business that is at least 51% owned by a woman or women who are U.S. citizens and who also control and operate the business. You can obtain this certification from the Women’s Business Enterprise National Council (WBENC) affiliate.
  3. Small Business Enterprise (SBE): This certification applies to a business independently owned and operated and is non-dominant in the field in which it might bid on government contracts. It must qualify as a small business under the criteria and size standards in 13 CFR 21 (which is 500 or fewer employees); this certification includes Historically Underutilized Businesses (or HUBZones) certified by local, state or federal agencies.
  4. Veteran Business Enterprise (VBE): This certification applies to a Veteran-owned business and Service-Disabled Veteran owned-business that is 51% owned, operated and controlled by United States citizens or lawful permanent residents that are U.S. military veterans. The veteran-owned business must obtain certification by the National Veteran Business Development Council (NVBDC) or a local veteran certification council.
  5. Lesbian, Gay, Bisexual, Transgender Business Enterprise (LGBTBE): This certification applies to a business that is at least 51% owned, operated, managed and controlled by an LGBT person or persons who are either U.S. citizens or lawful permanent residents. The LGBT-owned business must obtain certification by the National LGBT Chamber of Commerce (NGLCC).

Each diverse certification will require different documents from you, but, in general, you should have ready at a minimum the following:

  • Your proof of U.S. citizenship or lawfully admitted permanent resident documents for all owners and officers of your business.
  • Proof of ethnicity or minority status for all minority owners and officers in your business.
  • Work experience résumés that include places of employment with corresponding dates for all owners and officers of your business.
  • Your business tax records, and other documents required.

Check with each agency and make sure to submit all the documents they need. The certification process can take up to three months to complete and there is usually a fee involved. The good news is that it does not take that long to renew once you become certified.

EDGAR RAFAEL OLIVO is a bilingual business educator, economic advisor, and contributor for several media outlets. He’s a nonprofit executive who is passionate about education. He is certified in finance and data analytics and holds a business degree from Arizona State University.

Para la versión en español de este artículo, haga clic aquí.

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