Becoming a certified minority-owned business owner has a tremendous number of perks, allowing you to gain access to resources, networking opportunities and funding that can help your small business thrive. But when it comes to your business and your business needs, it can be difficult to figure out which certification is right for you. Here’s a rundown of what you need to know about each certification:
The 8(a) Business Development Program
The 8(a) Business Development program helps socially and economically disadvantaged small businesses grow by limiting competition for certain contracts to participating businesses, allowing them to become solid competitors in the federal marketplace.
Disadvantaged businesses in the 8(a) program can:
- Compete for set-aside and sole-source contracts in the program.
- Get a business opportunity specialist to help navigate federal contracting.
- Form joint ventures with established businesses through the Small Business Association (SBA)’s Mentor-Protégé Program.
- Receive management and technical assistance, including business training, counseling, marketing assistance and high-level executive development.
- Compete for contract awards under multiple socio-economic programs, as they apply.
The program is available to business owners that have been in the market for at least two years and are interested in expanding their footprint in the federal marketplace. You must also:
- Not have previously participated in the 8(a) program.
- Be at least 51% owned and controlled by U.S. citizens who are socially and economically disadvantaged.
- Have a personal net worth of $750 thousand or less, adjusted gross income of $350 thousand or less and assets totaling $6 million or less.
- Demonstrate good character.
The government limits competition for certain contracts to businesses in historically underutilized business zones. HUBZones often include Native American land and rural areas. It also gives preferential consideration to those businesses in full and open competition. Joining the HUBZone program makes your business eligible to compete for the program’s set-aside contracts. HUBZone-certified businesses also get a 10% price evaluation preference in full and open contract competitions.
To qualify for the HUBZone program, your business must:
- Be a small business according to SBA size standards.
- Be at least 51% owned and controlled by U.S. citizens, a community development corporation, an agricultural cooperative, an Alaska Native corporation, a Native Hawaiian organization or an Indian tribe.
- Have its principal office located in a HUBZone.
- Have at least 35% of its employees living in a HUBZone.
Minority-Owned Business Certification
Minority-owned businesses are on the move. There are now more than four million minority-owned companies in the U.S., with annual sales totaling close to $700 billion. The National Minority Supplier Development Council (NMSDC) is one of the most popular organizations to receive this kind of certification from, connecting minority-owned businesses and large corporation businesses with supplier diversity opportunities. While they are not the only certifier for minority-owned businesses, their qualifications are similar across the board.
To qualify for certification, you must meet these qualifications:
- The business owners must be U.S. citizens.
- The business must be at least 51% minority-owned, operated and controlled. (Per the NMSDC, a minority must be at least 25% Asian, Black, Hispanic or Native American. Also, minority eligibility is established through screenings, interviews and site visits. For publicly owned businesses, at least 51% of the stock must be owned by one or more minority group members).
- The business must be for-profit and physically located in the U.S. or its territories.
- The minority owners must also participate in the daily management and operations of the business.
Minority-owned business certifications are usually done by individual organizations and while they can help connect you to funding opportunities, they themselves are not necessarily government funded. These organizations do work with a vast network of corporations and organizations that provide contracting and mentoring opportunities.
A minority-owned business certification can also be paired with a disability-owned, veteran-owned, service-disabled owned, women-owned or LGBTQ+ owned certification, if you qualify under any of those titles. Having multiple certifications can further expand your resources and opportunities for business success and usually have similar qualifications and processes to apply.
No matter what you choose, a small business certification is a great decision for overall business progress, opportunity and success.
Sources: SBA, Score, Department of Transportation