How Certifications Can Help Businesses Owned By Minorities, Women, and Veterans.
These days, most small businesses owned-&-managed by ethnic minorities, women, veterans, and other underrepresented groups are availing certifications to strengthen their operations. Diversity certifications are definitely on their high-priority list.
But why is certification so important? How do these certifications help disadvantaged business owners?
If these are the questions on your mind, you will find your answers in this blog.
Essential Stats to Consider
“Annually, government-wide minimum participation goal for small businesses is 23% of contract budgets. In 2021, prime government contracts worth $147 billion (26% of total federal contract funds) were awarded to small businesses”.
Getting diversity certifications can help business owners (veterans, women, and minorities) establish eligibility for participation in government contract bids.
“Women own around 20% of all small enterprises in the country. Less than 5% of federal contract funds go to women-owned enterprises”.
Applying for women-owned certifications can help these women entrepreneurs get more visibility and opportunities.
“Post-pandemic, 31% of U.S. consumers said they took efforts to purchase more from minority-owned businesses. While 46% of Gen-Z consumers and 51% of Millennials increased their small-business buys”.
Creating marketing strategies to target customers looking to buy from women-owned, veteran-owned, or minority-owned businesses can increase sales significantly. Mentioning diversity certification in promotional materials lends authenticity to businesses.
Advantages of getting women-owned, veteran-owned, and minority-owned certifications
There is a general misconception that diverse-owned certifications are only advantageous when businesses participate in bidding processes for government contracts. But that is not true. There are many ways that a small disadvantaged business can truly benefit from getting certified.
- Opens up lucrative opportunities in new markets.
- Increases chances of receiving loans and grants.
- Gives access to nationwide vendor networks and networking events.
- Helps get visibility as a verified contractor on vendor listing platforms, and national or state MWBE directories.
- Boosts chances of winning government contracts through quotas assigned for diverse suppliers or vendors from underrepresented communities.
- Helps improve knowledge through various executive education programs available for small businesses.
- Increases access to customers specifically looking for diverse-owned products & services.
- Helps diverse-owned businesses qualify to be a part of larger supply chains of Fortune 500 companies.
Why do Businesses Consider Certifications?
- Qualify for government grants & contracts: Certifications can mean faster access to government grants that aid businesses owned by women, minorities, veterans, and other disadvantaged groups. Depending on the kind of entity your firm is certified for, a percentage of federal, state, & local government contracts are kept aside for small businesses. Getting appropriate certifications can help validate your eligibility to bid for these opportunities.
- Compete in the supply chain ecosystem of large corporates: In the last few years, large organizations have been increasingly committed to including diverse suppliers and prioritizing them in their supply chains. Getting certified as a women-owned, veteran-owned, or minority-owned business builds connections with other like-minded enterprises and helps you catch emerging opportunities with better grip and strength.
- Catapult your growth beyond your current market: Certifications allow small businesses to leverage their marginalized status to access communities that wish to support them. A certification on your company website, brochures, products, and marketing materials builds goodwill and increases RFQs (Request For Quotes). Accreditation helps your reach and network can expand nationwide.
As per the McKinsey report, there are an estimated 10,000 diversity-accredited businesses in the country (owned and managed by minorities, women, LGBTQ+ people, disabled, and veterans) that are earning over $10 million annually.
How to Get a Business Certification?
Getting certified as a minority-owned, woman-owned, or veteran-owned business takes a lot of documentation and verifications. However, the process takes only 1-3 months to complete, opening up growth and expansion opportunities for your business like never before. With it, you can easily garner visibility and compete versus public-sector contracting. There are many authorized agencies, like 58Joralemon, offering such specialized certifications.
Step 1: Research eligibility
Before approaching a certification agency, research whether your business qualifies for accreditation.
To get diversity certified, companies must meet the following eligibility requirements:
- Minority-owned, woman-owned, or veteran-owned business owners must meet the definition of their respective category and own and control 51% of the business.
- The majority owner must be a U.S. citizen or a legal resident.
- Small companies must meet the SBA size criterion.
- The business owner’s net worth can be at most $3.5 million after deductions.
- New businesses must operate for 6 to 12 months before requesting certification.
Step 2: Find a certification agency
Identify which agency in your area is responsible for the required certifications. If your business is eligible for multiple certifications, you can hire a specialized third-party consultant to guide you on the most favorable option. These days, all big certification agencies do offer this service.
Step 3: Application form & documentation
Identify which agency in your area is responsible for the required certifications. If your business is eligible for multiple certifications, you can hire a specialized third-party consultant to guide you on the most favorable option. These days, all big certification agencies do offer this service.
Step 4: Payment
Certification costs are nominal – established agencies like 58Joralemon charge $99 for application processing and an annual renewal charge of $99. You have to make the payment before applying.
Step 5: Application review & certification
Upon receipt of payment, the application review process takes 1-3 months. The next round is a face-to-face interview, followed by a site visit. The review committee meets again to approve or reject an application. Finally, you receive the decision about your certification via email.
You can take a more in-depth look at the certification process by getting a copy of our Small Business Guide to Certification and Verification.
Ready to Get Certified?
If you have any doubts about your business’s eligibility for certification, you may contact our consultants at 58Joralemon at (512) 222-5730 or get started with the registration at 58Joralemon.
