A minority business enterprise, sometimes called an MBE, is a term that describes a commercial organization that is owned and operated on a daily basis by certain minorities. The term minority business enterprise also refers to a specific, private business certification through the National Minority Supplier Development Council (NMSDC).
Eligibility Qualifications
Only certain minorities qualify for this unique classification through the NMSDC. This includes minorities of African, Asian, Hispanic and Native American ancestry. It also includes females and service-disabled veterans. All other minorities do not qualify for this particular certification program. The Asian American category includes West Asian Americans from countries like India and Pakistan as well as East Asian Americans from China and Japan. The category of Hispanic Americans includes people with origins from Portugal, Spain, Latin America and South America. The Native American category includes Aleuts from the Alaska region.
Qualifications
The MBE certification, much like the similar Women Business Enterprise (WBE) certification, are designed for entrepreneurs who conduct contract based B2B business with government and corporate organizations. That is, business professionals who seek contracting opportunities with local, city, county and state governments as well as military, hospital and university organizations. In order to qualify for the MBE certification, the person must be a citizen or permanent resident who owns at least 51 percent of a for-profit business. The individual should be a socially and economically disadvantaged individual who controls and manages daily operations. The business owner must be financially independent and not dependent on non-minority people or companies. The business must have a proper state and county license or registration. The gross annual receipts for the last three years of the business must be submitted.
Program Purposes
The MBE certification is designed for government agencies and corporate organizations to support minority-owned companies. Many government agencies require a certain percentage of funding recipients and government contracts to be awarded to minority-owned businesses. Global corporations also set specific percentages for contracts to buy from and sell to minority-owned suppliers. All organizations use the MBE certification to promote their commitment to diversity and equality. This is especially important for corporations with previously poor PR records with minorities.
Corporations cannot expect minorities to buy products and services from businesses who dislike doing business with minorities. In short, many private and public firms search for minority-owned suppliers through similar certification programs.
The Certification Benefits
The National Minority Supplier Development Council (NMSDC) has a comprehensive list of corporations that support their program, such as IBM, Marriott and Microsoft. The NMSDC database helps companies to connect with over 17,000 minority-owned suppliers. Almost 20 states and 25 cities have adopted the NMSDC certification program to help minorities win public-sector contracts. Besides being listed in the council’s Minority Supplier Database, NMSDC certified companies can attend business opportunity fairs, participate in management training programs and apply to the Business Consortium Fund’s working capital loan program. Depending on the region, the cost of certification is about $350 to $1,200.
Anyone who wants to apply may simply contact one of the 37 regional NMSDC organizations. Part of the application process requires the local council to send a representative to visit the company to verify the information. Alternatively, minority applicants may apply through the Small Business Administration’s (SBA) 8(a) Business Development program.
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