7/31/2019 Minority and Women Owned Businesses the Benefits of Being Certified

1/3

Minority- and Women-Owned Businesses

the Benefits of being Certified

By Sonjui L. KumarJune 2012

There are many ways for companies to accessopportunities in the marketplace. One option notto be overlooked is having your company

certified as a minority- or women-owned

enterprise, if applicable. Many corporations, as

well as federal and state governments, have setgoals to procure some portion of their goods and

services from minority- and women-ownedbusinesses. There are many reasons that theseprograms exist but corporate America for one has

recognized that in order to gain market share

from minority communities and women, theymust also do business with those populations.

Governments also want to ensure that tax dollars

are utilized in a way that allows all sectors of

society to participate. To meet these objectives,private and public sector firms search for minority- and women-owned suppliers through

programs that have formal certification processes. The various types of certifications available

can be confusing and companies should take the time to find the certification that best suits theirneeds and strengths. The process is also time-consuming and sometimes expensive, so

preliminary research can save both time and money. Many certifications require that you have

been in business for a minimum period of time. Listed below are some of the more popular

certification programs and their criteria.

National Minority Supplier Development Council (NMSDC)

This certification is best suited for companies that are looking for private-sector buyers. NMSDChas a stellar list of corporate members including Accenture, Nissan, IBM, Oracle and NationwideInsurance (www.nmsdc.org). NMSDC and its local councils help connect these companies with

the certified minority suppliers who are its members through trade-shows, conferences and

referral programs.

Eligibility: For-profit enterprises of any size that are located in the United States and are owned,

operated, and controlled by minority group members who are U.S. citizens. A minority groupmember is an individual who is a U.S. citizen with at least 25 percent Asian-Indian, Asian-

Pacific, black, Hispanic, or Native American heritage. Documentation to support the claim is

7/31/2019 Minority and Women Owned Businesses the Benefits of Being Certified

2/3

required. Additionally, at least 51 percent of the business or the companys stock must be owned

by such individuals, and the management and operations must also be controlled by suchindividuals.

SBA 8(a) Business Development Program

The Small Business Administrations 8(a) Business Development Program helps minority-owned companies win contracts in the public sector (www.sba.gov/content/8a-business-

development). You must have been in business at least two years to apply for this program.

However the application is free and the SBA provides free counseling and assistance to

applicants. The program also offers business counseling, training and marketing assistance. Theprimary goal, however, is to give 8(a) certified businesses access to contracts with limited

competition.

Eligibility: Small businesses that are owned and controlled by U.S. citizens who are sociallyand economically disadvantaged. Socially disadvantaged refers to individuals who are

subjected to racial or ethnic prejudice and includes, but is not necessarily limited to, black,Hispanic, Native American, Asian-Pacific, and Subcontinent Asian. The business must be at

least 51 percent directly owned by economically and socially disadvantaged individuals. The

company must have been in business for at least two years prior to applying, and it must submit

income tax returns for those two years that show operating revenue.

NWBOC- and WBENC-Certified Women-Owned Businesses

The National Women Business Owners Corporation (NWBOC: www.nwboc.org), which was

formed in 1995, and The Womens Business Enterprise National Council (WBENC:www.wbenc.org), a Washington, D.C.-based national non-profit, both provide a process for

women-owned enterprises to get certified and get connected with companies looking for women-owned suppliers. They also offer training and other business resources. NWBOCs certification

is accepted by both public and public sector firms, while more than 1000 private companiesrecognize WBENC certification.

Eligibility: A woman must own 51 percent of the business to qualify for certification. A woman

must also hold the highest position at the company and be active in daily management and the

strategic direction of the company. In addition to being a majority owner, a woman must also be

a U.S. citizen (or a permanent resident for WBENC certification), and it is recommended that shebe in business for at least six months.

There are manyother certification programs

that cannot be covered here due to spaceincluding the Disadvantaged Business Enterprise program run by the Department of

Transportation (http://osdbuweb.dot.gov/DBEProgram/) and those run by individual cities and

states such as the City of Atlantas Equal Business Opportunity program

(http://www.atlantaga.gov) and the State of Marylands Minority Business Enterprise Program(www.mdot.maryland.gov).

http://www.khabar.com/magazine/business-insights/www.sba.gov/content/8a-business-developmenthttp://www.khabar.com/magazine/business-insights/www.sba.gov/content/8a-business-developmenthttp://www.khabar.com/magazine/business-insights/www.sba.gov/content/8a-business-developmenthttp://www.khabar.com/magazine/business-insights/www.sba.gov/content/8a-business-developmenthttp://www.khabar.com/magazine/business-insights/www.nwboc.orghttp://www.khabar.com/magazine/business-insights/www.nwboc.orghttp://www.khabar.com/magazine/business-insights/www.nwboc.orghttp://www.khabar.com/magazine/business-insights/www.wbenc.orghttp://www.khabar.com/magazine/business-insights/www.wbenc.orghttp://www.khabar.com/magazine/business-insights/www.wbenc.orghttp://www.khabar.com/magazine/business-insights/www.wbenc.orghttp://osdbuweb.dot.gov/DBEProgram/http://osdbuweb.dot.gov/DBEProgram/http://osdbuweb.dot.gov/DBEProgram/http://www.atlantaga.gov/http://www.atlantaga.gov/http://www.atlantaga.gov/http://www.khabar.com/magazine/business-insights/www.mdot.maryland.govhttp://www.khabar.com/magazine/business-insights/www.mdot.maryland.govhttp://www.khabar.com/magazine/business-insights/www.mdot.maryland.govhttp://www.khabar.com/magazine/business-insights/www.mdot.maryland.govhttp://www.atlantaga.gov/http://osdbuweb.dot.gov/DBEProgram/http://www.khabar.com/magazine/business-insights/www.wbenc.orghttp://www.khabar.com/magazine/business-insights/www.wbenc.orghttp://www.khabar.com/magazine/business-insights/www.wbenc.orghttp://www.khabar.com/magazine/business-insights/www.nwboc.orghttp://www.khabar.com/magazine/business-insights/www.sba.gov/content/8a-business-developmenthttp://www.khabar.com/magazine/business-insights/www.sba.gov/content/8a-business-development

7/31/2019 Minority and Women Owned Businesses the Benefits of Being Certified

3/3

There are also disadvantages to becoming certified. A critical part of the application and

certification process is to weed out those companies that are not truly minority- or women-ownedand operatedfor example, companies where majority ownership may be nominally held by a

minority or women but actual control is held by others. Accordingly, the application process is

often burdensome, requiring companies to set aside significant time to gather the documentation

and submit it. Finally, the certification is only valuable to the extent the company utilizes theresources and opportunities that come with it, such as participating in requests for proposal or

attending trade shows and conferences. Pursuing these opportunities means that companies have

to be willing to commit ongoing resources and funds in order to get the benefits of thecertification. So it is important to establish up front and on a regular basis whether certification is

a worthwhile venture for your company. Without it, however, an eligible business may miss out

on a vital business strategy and tool.

Business Insights is hosted by the Law Firm of Kumar, Prabhu, Patel & Banerjee, LLC. Sonjui

L. Kumar is a corporate, transactional attorney and a founding partner of KPPB Law. Her

practice focuses on acting as general counsel to privately held companies, including foreign

companies doing business in the U.S.

Disclaimer: This article is for general information purposes only, and does not constitute legal,

tax or other professional advice.

Published byKhabar Magazine,Business Insightssection June 2012 issue.

http://www.khabar.com/http://www.khabar.com/http://www.khabar.com/http://www.khabar.com/magazine/business-insights/http://www.khabar.com/magazine/business-insights/http://www.khabar.com/magazine/business-insights/http://www.khabar.com/magazine/business-insights/http://www.khabar.com/