Before we explore the scope of growth possibilities that a Supplier Diversity certification opens up for businesses, it is important to understand what ‘Supplier Diversity’ means. The term basically refers to a supply chain that engages U.S. companies, where over 51% of ownership (and management) lies in the hands of individuals belonging to underrepresented groups such as:
Today, being noticed and hired by Fortune 500 companies has become a tangible dream for many such underserved suppliers & service providers. And Supplier Diversity certifications have emerged as powerful aids toward this change.
A Supplier Diversity certification is granted after a third-party certification agency like Cocolevion’s 58Jorelemon thoroughly screens the application documents and validates that eligibility parameters have been met by the business to qualify as diverse. To obtain this certification, incontestable documentation support has to be submitted for all prescribed criteria:
This certification process begins with the payment of a nominal fee. Then the application is screened by a third-party agency, followed by in-person or virtual interviews, and on-site visits to confirm the diversity claim (if required). The entire process will take 60 to 90 days to be completed. Once certified, suppliers can connect with the diversity program at companies where they’re interested in doing business.
It opens up the market and growth opportunities: For small or mid-sized business owners who are looking to grow their reach, sales, and impact, getting diversity certified could be the best way forward. Most private companies keep aside a huge percentage of spends for diverse-owned suppliers, and uncertified businesses have lower chances of being considered for these opportunities.
Source: McKinsey and Co.’s report
Access to government contracts: Any company working on landing government contracts also has to adhere to strict diversity requirements, especially the ones interested in DoD’s Workforce Diversity programs like:
So, underprivileged businesses can now approach qualified agencies like 58Jorelemon to get their diversity certification and prove their qualification as diverse-owned suppliers. Post which, they can easily apply for big-ticket contracts with the federal government.
As per the press release issued by the U.S. Small Business Administration (SBA) in July 2022, the federal government had awarded $154.2 billion or 27.2% of their annual budget to small businesses in the fiscal year 2021, out of which 11% of government-wide procurement contracts were spent on Small Disadvantaged Businesses (SDBs).
Additionally, President Biden has announced an increase in the share of contracts going to SDBs by 50% by 2025, with an additional infusion of $100 billion in the next five years.
Access to Supplier Diversity programs: Large companies are now making conscious efforts to work with diverse-owned suppliers. Some have created special Supplier Diversity programs to cultivate relationships with diverse-owned businesses, providing information on how their procurement approaches work, and other relevant details. By granting access to resources and support, such programs lend huge advantages to underserved suppliers in a competitive market.
But first, suppliers need to get independently certified as diverse-owned-and-managed businesses to participate in Supplier Diversity programs. This ensures that growth opportunities are claimed only by deserving SDBs.
Not just big organizations, but even the Diversity Certification agencies are investing in programs to support their supplier-members. They are creating an information infrastructure to empower diverse suppliers with continuous access to training, educational seminars, and networking events – everything that disadvantaged businesses need to boost their reach and connections.
An estimated 10,000 certified businesses owned by minorities, women, LGBTQ+ people, veterans, and the disabled earn $10 million a year or more and are ready to compete for business.
Referrals and capital opportunities: Supplier diversity certifications can help businesses get better financing options (and rates) with banks and venture capital firms. They also open up capital aid opportunities from government sources (including tax revenue benefits), non-profits, and other local programs. For start-up funding or expansion financing, SDBs can even approach Diversity Networks which have dedicated capital pools for supporting their members.
Related article: Here is Why You Should Certify Diverse-Owned Business
As registered members of certification networks, diverse-owned businesses surely can make faster inroads into new markets, and leverage referral programs and direct relationships for useful introductions.
Business promotions and marketing: By including Supplier Diversity Certification in promotional materials, SDBs can easily connect with customers/clients who are looking to support brands/solutions that are minority-owned, women-owned, or veteran-owned. Getting the certification highlighted on business websites is another great way to stand out, build goodwill, and increase RFQs.
If you think your business fits into more than one diversity group, and are confused about which route to take from here, you should first begin by researching what actually qualifies as ‘diverse’. The Supplier Diversity certification process is quite rigorous, with stringent requirements. So, there is a chance that your business might not be technically eligible for accreditation.
But, if your business still figures under one or more diverse classifications, you should go with the best fit in terms of:
“Diverse companies tend to hire in the local communities where they operate. Their success creates wealth in communities and helps support the overall economy, which is a good thing for everyone.”
– Jill Davis, Vice President and Marketing Manager, Global Supplier Diversity at JPMorgan Chase
When a diverse business grows, it not only creates jobs but also establishes social equity and inclusiveness in the business ecosystem. Over the last decade, the focus on championing supplier diversity has empowered local communities and fueled exponential growth in the U.S. economy.
If you are running a minority-owned, veteran-owned, or woman-owned business and are looking to get diversity certified, you can sign up here to begin your certification journey.