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Minority, Disadvantaged, and Small Business Certification Basics

Minority, Disadvantaged, and Small Business Certification Basics
Pat Dickson - Mon Jul 23, 2012 @ 12:53PM
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If your business is small, or it is partially or completely owned by minorities, women, veterans, or persons with disabilities, you are likely in a position to gain a competitive advantage. You can certify your business with a number of public and private agencies. As a result of being certified, special opportunities for selling your products or services will become available.

There are many, many opportunities for certified minority, small, women-owned, disabled, veteran, and "other" business (we will collectively call them "Disadvantaged Businesses"). Too many to list more than a few in this article.

To name just a few of these opportunities, government bids, projects, and service contracts often require Disadvantaged Business participation. Large food and beverage distribution agreements often require proof of minority, women-owned, or veteran participation. Public and private construction projects often require Disadvantaged Business participation as well. However, to prove your business qualifies, you usually have to produce a proper certificate! 

Because the business certification sources, processes, and opportunities you seek vary so much depending on who you are, with whom you are seeking certification, the products and services you provide, the industry you serve, and where you are located/your geographic reach, this article is only intended to be a general overview. Hence, I will limit the rest of our discussion to definitions and a listing of a few Disadvantaged Business certification opportunities.

Generally speaking, to certify as a Disadvantaged Business, the basic requirements are usually pretty simple. Certification might require proof that the applicant business is at least 51% owned by disadvantaged persons. Such proof is often obtained by providing birth certificates, passports, or drivers' licenses to the certifying agencies. Every certification process and application varies. Caveat, I have seen cases where disadvantaged ownership requirements have been as low as 5% and as high as 100%. 

Disadvantaged Business acronyms: MBE, WBE, SBE, DVBE, DBE, OBE

What do all these acronyms stand for? Here is a partial list, and my definitions are only generalities. Government and private agency definitions vary from certification application to certification application.

MBE = Minority Business Enterprise. To be certified as an MBE usually requires 51% minority ownership or management. Qualifying minorities may include, but are not limited to, Black Americans, Asians, Hispanics, and American Indians.

WBE = Women Business Enterprise. To become certified as a WBE usually requires proof 51% or more of the owners or managers of the business are women. 

SBE = Small Business Enterprise. Certification of an SBE really varies. However, it is not uncommon to require SBE owners to prove their net worth is under $1m, that there are fewer than a certain number of employees, or that revenues or assets are not greater than a certain amount.

DVBE = Disabled Veteran Business Enterprise. DVBE status often requires written proof from the military that the owners/managers were disabled while serving their country.

DBE = Disabled Business Enterprise. Blind, deaf, and otherwise disabled business owners and managers have many opportunities for obtaining DBE certification.   

OBE = Other Business Enterprise. What qualifies for OBE status varies. I have observed that bids with the City and County of San Francisco often reference the preference for certified OBE's from time to time. I have seen one case where a transgendered individual qualified his/her business as an OBE and was given preference in a public bid, which resulted in winning a lucrative contract opportunity.

A few places to apply for Disadvantaged Business Certification:

US Small Business Administration

National Minority Supplier Development Council

Women's Business Enterprise National Council

City and County of San Francisco

City of Phoenix

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