The face of minority owned businesses is changing in the United States. According to the US Census Bureau, there was a 38.1 percent increase in minority business ownership from 5.8 million in 2007 to 8 million in 2012. California led this surge with 1.6 million minority owned firms. These firms made up 45.6 percent of all businesses in the state. Much of this growth can be attributed to programs like the Minority Business Enterprise (MBE) Certification program from the Minority Business Development Agency (MBDA) that helps give companies access to the tools that they need to grow including:
● Corporate purchasing agents
● Premium networking events
● Affordable consulting services
● Technology programs
● Introductions to nationally-recognized corporations
In the State of California alone, there were 1,220,581 minority owned businesses according to a MBDA 2007 report, with Los Angeles leading the way state-wide. That number has only grown in the past nine years. Unfortunately, not all MBEs take advantage of the certification program and the benefits that come along with it, in large part because many are not aware of its existence; this is especially true in the tech industry.
Despite its lack of publicity, the certification is not just another empty piece of paper for enterprises to boost their resumes with – it has real world benefits that some founders have taken full advantage of:
“With our MBE certification, Sidebench is able to engage with the Southern California Minority Supplier Development Council [SB1] to create opportunities for business through their Open Houses and bi-monthly events. This has translated into frequent touch points with those in the local area. The MBE Certification has also helped create inlets into the business landscape and has benefited Sidebench Studios through the establishment of relationships with Fortune 500 companies”
— Kevin Yamazaki, Founder, Sidebench Studios, Los Angeles App Development Company
With an abundance of growing tech companies, both Silicon Valley and relative newcomer Silicon Beach are fiercely competitive, and an MBE certification can be a leg up in some cases. Relationships are crucial to established companies and fledgling startups alike, and a foot in the door with a potential Fortune 1000 client has the potential to be a game-changer.
Los Angeles is especially poised to reap the benefits of MBE Certification. With a diverse ethnic makeup, the greater LA region is home to countless enterprises headed by minorities whose passion and drive are instrumental in creating a vibrant, unique city. The benefits of the certification can help these enterprises grow in ways that other certifications may not, bolstering both their own business while elevating the larger Los Angeles business landscape at the same time.
Helping meet diversity goals
Introductions and networking help people through the door and access to resources help guide business owners in the right direction. However, these are not entirely exclusive to certified MBEs. True, not everyone can attend these specific events or access these specific resources, but there are avenues available through other organizations that mirror these opportunities.
That said, other organizations cannot help minority owned businesses position themselves to work with Fortune 1000 companies that are looking to meet their supplier diversity goals. These companies need only search the supplier database for the product or service they need. The results present them with a list of certified MBEs and every dollar they spend with those suppliers counts towards achieving their mandated quotas. That certification is available only through the MBDA and is regulated by the US Department of Commerce.
Certification Requirements
Certification as an MBE for the supplier program is done through the National Minority Supplier Development Council (NMSDC) and requires that the business meet the following criteria:
● United States citizens.
● Minority businesses must be at least 51% minority-owned operated and controlled.
● The business must be a for-profit enterprise and physically located in the U. S. or its trust territories.
● Management and daily operations must be exercised by the minority ownership member(s).
Whether you are looking to raise capital through the variety of loans available, or you are looking to expand your customer base through the certified supplier database, the benefits of being a certified MBE are lengthy. At the very least, MBE certification helps by placing your products and/or services in front of companies who are serious about doing business with you, which is tremendously valuable no matter what you are offering.
