According to national surveys, basic financial literacy in the United States is generally low, and federal surveys reveal gaps among racial groups and ethnicities. Financial literacy and access to capital don’t impact all businesses equally. Unsurprisingly, there are significant disparities across racial and socioeconomic segments. According to the U.S. Small Business Administration less than 10% of all federal contracts went to minority-owned businesses in fiscal year 2020.
If your company wants to connect with America’s top publicly-owned, privately-owned, foreign-owned corporations, and other large purchasing organizations, National Minority Supplier Development Council (NMSDC)’s certification can be a real asset. The organization has an impressive list of corporate members that includes IBM, Microsoft, and Google. The council helps these companies connect with the more than 15,000 minority-owned suppliers in its database. Seventeen states and 25 cities also accept NMSDC certification for programs designed to help minorities win public-sector contracts.
Who is eligible: For-profit enterprises of any size that are in the United States and are owned, operated, and controlled by minority group members who are U.S. citizens. For the purposes of NMSDC’s program, a minority group member is an individual who is a U.S. citizen with at least 25% Asian-Indian, Asian-Pacific, Black, Hispanic, or Native American heritage. Documentation to support the claim is required. Additionally, at least 51% of the business or the company’s stock must be owned by such individuals, and the management and operations must also be controlled by such individuals.
How to apply: Start by contacting one of the NMSDC’s regional councils close to your business. Your council will provide you with a standardized application and request documents to support your minority status claim through a combination of government documentation. You will also need to sign an affidavit or declaration, provide current financial statements, submit tax returns, a bank signature card and more. Unlike most minority-owned certification programs, the organization will make a virtual office visit to your company to verify the information on your application.
The process of obtaining, coordinating, and submitting all the requirements can be time-consuming, however, the good news is that once you have completed the work for your initial certification, the subsequent renewals are typically much more streamlined.
Business Benefits of Certification
Access to capital and capacity building: Certification is a door opener and potentially give minority business enterprises (MBEs) an edge over non-certified MBEs with whom you are competing for contracts. The great news is that the largest U.S. corporations purchase more than $100 billion in products, services and solutions supplied by MBEs. NMSDC facilitates business connections between corporate members and MBEs through Check—Mate®, which sets the foundation for future partnering and business opportunities. Furthermore, NMSDC has created capital access opportunities for MBEs throughout the life cycle of its partnership with the Business Consortium Fund, the Growth Initiative Program, Corporate Plus® Membership Program, and Capital Managers’ Program.
Unique networking opportunities: Networking is key to the success of any minority business enterprise. By getting NMSDC certification, you’ll join a network of powerful, influential leaders who are eager to share their wisdom and expertise. MBEs have exposure to over 15,000 other MBEs, through the MBE2MBE Search Tool, to engage in business opportunities and the ability to form partnering relationships, strategic alliances or joint ventures for success. Most importantly, NMSDC holds the largest U.S. conference focused on minority business development, where MBEs connect with hundreds of prospective buyers, government agencies, and procurement professionals.
Stand out from competitors: MBEs have to deal with a lot of competition, and it can be tough to cut through the clutter and noise. A minority owned business certification provides unique opportunities as many corporations seek out diverse-owned businesses to spend their money. Once you are certified, spread the word on all your marketing vehicles, including your website, brochures, email newsletters, social media channels and anywhere else you can. NMSDC certification helps communicate your minority business status, not only to prospective clients but also to vendors and the broader business community. It communicates that diversity is a core value of your enterprise, making you a more attractive business partner through values alignment.
If you’re a minority business owner, don’t wait longer and pursue the certification that will unlock new opportunities to grow and scale your business. For more information, visit https://nmsdc.org.