MWBE Certification: Why Diverse Businesses Should Get Certified
If you are a diverse business owner, you may have wondered if you should take the steps to formally certify your business as a diverse business enterprise. You may be asking yourself, “Will certification really help my business in any tangible way? How many hoops will I have to jump through? Is it a waste of time?”
Well, if you are asking yourself those questions, certification may be a good fit for you if:
- your current customer recognizes and place value on certification,
- you plan to sell to customers who recognize and place value on certification in the future or,
- you have determined how becoming a Diverse Business Enterprise can be incorporated into your marketing strategy.
What is a Diverse Business?
A business is generally considered to be a diverse business if it is at least 51% owned by a minority or a woman. In the United States, a person who is: American Indian or Alaskan Native, Asian, Black or African American, Native Hawaiian or Other Pacific Islander; whose ethnicity is Hispanic or Latino; female; and/or a veteran or service-disabled veteran of U.S. Armed Forces are members of a diversity group.
Aside from the 51% ownership, the owner must also demonstrate their financial control of the business, their day-to-day managerial control of the business, and that they have relevant experience and technical knowledge to operate the business. These factors are determined through a rigorous and detailed application process by governmental or third-party certifying agencies.
Benefits and Perks of Certification
What can a diverse business certification do for your company? Considering the time and effort required to prove and obtain formal certification, a diverse business owner should decide first if it will be worth it. There are many reasons to get your MWDVBE Certification, but the following two rank high on the list of justifications to undertake the certification process.
Reason 1 – Get more opportunities
Did you know that diverse business spend goals, depending on the agency’s procurement policies, range from 10% to 25% of a significant portion of their annual eligible procurement dollars? Many government agencies, higher education institutions, and Fortune 1000 companies have programs for diverse business spend goals.
It’s simple math. The more opportunities that you have in front of you, the better sales potential, and the more bids you’re likely to win.
Often, your client or target client has a supplier or procurement diversity program that strongly encourages they meet spend goals with diverse business owners. These clients will seek to meet their diverse spend goals one of two ways:
- contracting directly with certified diverse business owners
- requiring their prime vendors to subcontract with certified diverse business owners.
Either way, there is a market opportunity for certified diverse businesses that non-certified diverse businesses don’t have.
Just having a diverse business certification does not guarantee sales, but it will position your business to be in a select pool that enhances your opportunity to make a sale.
Reason 2 – Be approached, instead of always reaching out yourself
When you are certified as a diverse business enterprise, supplier or procurement diversity programs will target your business for opportunities.
These programs:
- only engage and utilize certified diverse businesses to meet their government or corporate diversity spend goals
- seek to expose certified diverse businesses to their internal buyers and decision-makers through a variety of networking events
- include meet-and-greet events, specific procurement informational meetings, and workshops that focus on assisting diverse vendors to learn about their procurement processes and systems.
Quick tip
The networking events are opportunities to sell your business, make sure you are connecting with the right buyers or departments, and learn about other opportunities within the agency or corporation.
How to Start Applying For MWBE Certifications
The path to certification no matter where you live starts initially with the business owner and their business records.
The detail requested in the application process may appear to be overwhelming, but each government or third-party certifying agency asks 90% of the same questions to verify and validate ownership, control, and experience of the business owner. Once you have all the information for one certification, you most likely will have the information aligned for any other diverse business certification as well.
When compiling your business records, remember, these are the documents relating to the start and on-going operation of the business. If a business owner has maintained reasonable records, much of the application stress is alleviated.
When your business record have been kept in order, it’s much easier to begin the certification process and move through it with less hiccups.
Convinced that your company should become a certified Diverse Business Enterprise, what are you waiting for? Perhaps you want a go-to resource who is familiar with the data requested, understands and can interpret application questions, and will assist you through the process so you can reach your goal of becoming a certified diverse business owner.
CAI consults for a number of diverse businesses that have successfully obtained their MWDVBE certification. Schedule your free 30-minute certification consultation today and see how we can help you, too.
