Owning and running a small business is a challenge. Getting more customers, developing products, and maintaining quality are all part of the grind. Businesses owned by women and minorities face even greater challenges. Some states in the US have developed programs for minorities women that promote equity in running a business.
The article focuses on MWBE certification, its eligibility criteria, and its benefits. This piece will also introduce you to a few programs that have been developed by some states.
What Is an MWBE Certification?
MWBE stands for Minority/Women-Owned Business Enterprises. Some states might treat it separately as an MBE or WBE. However, in either case, it is a certification issued by states to provide developmental benefits to the businesses owned by women and minorities. Apart from the state-run programs, there are a few that have been developed by the federal government and private organizations.
Being a minority, you have to belong to any of the following groups:
Black
Originating from any of the African racial groups.
Hispanic
Being a descendant of Mexican, Puerto Rican, Dominican, Central or South American or Cuban origin. The origin could be Latin American.
Asian-Pacific
People coming from the Far East, Southeast Asia, or the Pacific Islands.
Asian-Indian Subcontinent
People having their roots in the Indian Subcontinent.
Alaskan Native or Native American
Persons having their roots with the original people of North America.
Benefits of Getting MWBE Certification
If you are someone who is running a minority/women-owned business, then you may want to consider getting MWBE certified. This is because it comes with some great benefits. Let’s get to know a few of them:
Competitive Advantage
If your company is certified, you may get some competitive advantage. It gives you the opportunity to work with bigger players in the industry. Being certified means having access to developmental assistance, opportunities, and resources. This will help you secure government contracts that were inaccessible before. So, for instance, if you have a catering business, having the certification will give you the chance of catering a government lunch. Similarly, if you own a soap company, you may become a soap supplier to a state facility.
Online Visibility
Having an MWBE certification increases your business’s online visibility. So, the agency that will certify your business is most likely to publish your company’s name on their website. This increases the chance of prospective customers seeing you online and contacting you. Moreover, it builds a valuable backlink to your business’s website.
Company Expansion
Many states develop grant programs and funding opportunities for minority-owned small businesses. Having an MWBE certification gives you several opportunities to bag some capital for your business’s expansion.
Publicity
In addition to online visibility, an MWBE certification helps to publicize your business. Having a state-level certification gives an opportunity to send a press release to local media channels and publications. Moreover, you can also publicize this on your company’s social media platforms.
Branding
With an MWBE certificate, you have a chance of augmenting your branding efforts. You can add a certification logo on your website, email signature, or business cards.
Supplier Diversity Program
This is the biggest and most important benefit that minority and women-owned businesses enjoy. When large corporations buy goods and services from minority-owned businesses, the chances of growth increase manifolds.
It’s not that only small businesses benefit, giant players also reap the befits of getting supplies from small companies. Let’s have a look at a few of them:
- Big players become agile, flexible, and resilient.
- Highlight their commitment to diversity and inclusion, putting them in a good light in the market.
- Enables them to serve untapped markets.
- Get access to innovative products to buy and sell.
Eligibility Criteria to Obtain MWBE Certificate
Eligibility criteria vary from one state to another. Some of the common criteria are as follows:
- At least 51% of the company’s ownership has to be in the hands of one or more persons belonging to the socially or economically disadvantaged group.
- The owner of the business should be a US citizen.
- The company should be physically located in the US.
- The company should be a for-profit enterprise.
- Women or minority members should be looking after the management and daily operations.
It is advisable that you carefully review the requirements of the program you want to join before submitting your application.
The MWBE Certification Process
To get your business certified, you must go through the following steps:
- Go through the eligibility criteria to see if your business qualifies for an MWBE certification.
- Collect the required documents.
- Complete the online application.
- Pay the application fee online via a credit card.
- Upload all the relevant documents online and submit your application.
Points to Know About the MWBE Application Process
- The application process takes around 90 days.
- Before starting an online application, you have to register on the site of the regional council where you intend to apply.
- The processing of the application starts once the payment has been made.
- The concerned state authorities review the application and documents thoroughly.
- Your business site will be thoroughly scrutinized.
- The Certification Compliance Committee will meet regularly to review your application.
- Once the Certification Compliance Committee approves your application, it goes to the Board for final approval.
- The Regional Affiliate notifies you once your application is approved.
- In case your application is not approved, you may submit a letter of appeal.
Documentation Required
Documentations vary by business type. Below is a list of documents that each business type is required to submit:
Sole Proprietors
- Complete application
- Driver’s license or valid ID
- Proof of US citizenship
- Declaration page signed dated and notarized
- Ethnicity proof of owners
- Current financial statements
- Bank Signature card
- Occupational licenses if applicable
- Resume of owners
- Proof of EIN
- Bonding Capacity proof if applicable
- Notes Payable if applicable
Franchises
- Franchise Agreement
Partnerships
- Partnership agreement
- Proof of capital investment
- Certificate of formation of the partnership
- Articles of Partnership
- Proof of Partnership purchase
Corporations
- Certificate of Corporation
- Proof of capital investment
- Minutes of the recent board meeting
- Current stock ledger
- Articles or Certificates of Amendment
LLCs
- Certificate of organization
- Operating Agreement
- Proof of capital investment
- Minutes of the meeting
- Minutes of the meeting in which members were elected
- Copy of certificates of ownership
- Copy of membership transfer ledger
- Unit purchase proof
Women-owned Business Enterprises
Women-owned business enterprises can be found in three major industries- construction (15%), arts, and entertainment (12%), and other services (12%).
Why Work With MWBEs
A major reason why businesses would want to work with MWBEs is to gain tax savings. On the federal level, companies that work with MWBEs can get tax breaks. This is a reason why some companies procure supplies and use the services of MWBEs.
Another reason could be that companies would want to diversify their supplier and customer network. Some businesses also feel that working with MWBEs reinforces their company’s values and mission.
MWBE New York City
Like other states, New York City has an MWBE program that assists women and minority entrepreneurs in growing their businesses. Getting certified with New York City means that minority/women-owned business enterprises become visible to prospective buyers, agencies, and contractors who want to purchase goods and services from new suppliers.
There are several benefits of getting MWBE certified with New York City. Let’s have a look at some of them:
- Once you get the certification, your company gets registered in the NYC Online Directory of Certified Businesses. It is a public website that promotes small certified businesses. It includes businesses from various industries such as catering, graphic design, IT, engineering, childcare, plumbing, event planning, accounting, and many more.
- If your company has the certification, you can get access to targeted consultation, networking events, and customized courses.
A business seeking MWBE certification in New York must meet the following requirements:
- The business should have the legal authority to conduct business in New York state.
- The company must be in the business for at least one year.
- At least 51% of the business should be controlled by a minority member or woman who is a US citizen or a US permanent resident.
- The business should have one of the following structures:
- Sole proprietorship
- Limited liability company (LLC)
- Limited Partnership (LP)
- General Partnership
- Corporation
- Limited liability partnership (LLP)
You must ensure that your business should be for-profit.
- The company’s headquarters should be located in one of the following counties of New Jersey and New York City or within the five boroughs of New York City.
- Westchester
- Suffolk
- Bergen
- Hudson
- Passaic
- Nassau
- Putnam
- Rockland
State MWBE Programs
When exploring MWBE certification, do your research to find out about state-level programs your business might qualify for. You can begin to contact agencies and offices in your state or city that looks after the women and minority programs.
- Visit the Minority Business Development Agency’s website for programs offered by different States.
- You may also reach out to the Small Business Administration to find state-level and federal programs that your company may want to join.
- Another option is to reach out to the Chamber of Commerce in your area and speak to their small business liaison. You might come across some opportunities for your business.
FAQs
What is the validity of the MWBE certification?
The MWBE certificate is valid for three years.
Why is it important to provide supporting documents?
It is important because the state has to ensure that the business’s daily activities are managed by a woman or a member of the minority group.
Do documents remain confidential?
Yes, the department ensures that no financial and personal information of a business is revelated without the owner’s consent.
Does one have to send original documents?
No, only copies of the documents are needed.
Does certification guarantee that a business will get state or other contracts?
No, it doesn’t. A company has to do its own marketing, advertising, and networking in order to attract customers. The certification only facilitates and doesn’t give you anything of itself. In the end, how many contracts and customers you get depends on your own marketing strategy.
What is the purpose of visiting the company site?
The purpose is to ensure that all the information in the application and documents holds true. Department conducts on-site visits to see business facilities and understand their functions.
What happens when the certification expires?
The department sends a recertification notice to every certified business at least 60 days before the certificate expires.
What is the purpose of recertification?
The purpose is to ensure that the state department has the firm’s updated information.
A Path to Success
As an owner of a small business, getting an MWBE certification is a path to success. It is one of the tools to help you compete with other players in the industry and grow your business.
If you haven’t secured a certificate yet, now is the time to do so. It will help you create a strong brand identity.
