Starting and running a business is no easy feat. While many entrepreneurs share some common struggles, it’s important to recognize that not every entrepreneur starts out on similar footing — particularly business owners who are women or minorities.
Chances are you’ve heard about governmental programs designed to level the playing field for women and minority business owners and help them compete against others in their industry. Here, we’ll explore the basics of these Minority/Women-owned Business Enterprise (MWBE) programs and the benefits they offer.
What are the Small Business Certification Options?
Most U.S. states — and some territories and cities — have special certification programs for small business owners within certain minority groups. Because these small business certification programs operate at the state or local level, program titles, eligibility requirements, and application procedures vary by state.
Some of the most common program titles and acronyms to look for are:
MWBE - Some states have a single program that encompasses small businesses owned by women or people in certain minority groups. These programs use the acronym MWBE, which stands for Minority/Women-owned Business Enterprise.
DBE - Instead of MWBE, some agencies or states use the name Disadvantaged Business Enterprise (DBE) for their programs.
WBE/MBE - Some states have separate programs for women-owned businesses (WBE) and minority-owned businesses (MBE).
What are the Benefits of MWBE Certification?
If yours is a minority or women-owned business, there are a lot of benefits to gain from getting certified. An MWBE certification can put your business on the proverbial map when it comes to being considered for opportunities with companies that specifically seek to engage businesses like yours, such as government contractors or agencies.
Some of the benefits of MWBE certification include:
Many large companies request to work with MWBE-certified companies that are actively submitting bids or proposals to the state. These larger companies often have specific goals or targets to reach with regards to spending a certain portion of their budget on small business partners, or have supplier diversity programs to promote opportunities for diverse suppliers. Being certified can give your company a competitive advantage.
Getting certified can help boost your company’s online visibility. The agencies that certify small businesses typically publish a list of certified companies on their website. It’s also not unusual for private organizations to do the same. For example, Justworks has an MWBE directory listing of customer businesses (though these businesses don’t have to have a state/local certification to be listed). Every listing provides an opportunity for prospective customers to find your business while also providing a valuable backlink to your company website.
Getting certified might even help you secure capital to expand your organization. There are some grant programs and other funding opportunities specifically designated for minority-owned small businesses. Being an MWBE-certified business can help improve your chances of being considered for these opportunities.
Publicity possibilities are another key benefit of certification. Earning a state-level certification provides the perfect opportunity to send out a press release to local news media and industry publications and share the news via your company’s social media platforms.
- MWBE certification can also help boost your company’s branding efforts. Upon getting certified, you’ll be able to add a certification logo or notation to your website, email signature, business cards, and any other collateral materials as needed.
Who Qualifies as an MWBE?
Again, exact qualifications may vary by state and/or program. One common requirement to qualify for MWBE certification is that at least 51% of the company’s ownership has to be held by one or more members of a group considered to be economically or socially disadvantaged.
Some programs have additional qualification requirements. For example, Arizona’s DBE program has a cap on the personal net worth of the owners of the business. Requirements like these make it important to carefully review the requirements of any program you are considering before submitting your application.
How to Find State MWBE Programs
When you’re ready to explore MWBE certification, do your research to find out how many state-level programs your company might qualify for. A great place to begin is to contact the office or agency in your state or city that oversees the programs specific to women- and minority-owned businesses.
Visit the Minority Business Development Agency’s website for a state-by-state list of agencies offering programs that are affiliated with the United States Department of Commerce.
Justworks also published a helpful roundup of state-level programs you can reference to identify the certification program in your state.
You might also want to reach out to the local Small Business Administration in your area to see if they have information about state-level — or even federal — programs that your company might qualify for.
To further explore options, you can also reach out to the Chamber of Commerce in your area and ask to speak to their small business liaison. That person may have information on additional opportunities for your business.
A Path to Small Business Success
For many small businesses, getting certified as an MWBE is an important step along the path to success. The certification can be one of the many tools you use to better compete in your industry and grow your business. Justworks is another. With Justworks, you get one simple solution for payroll, HR, and compliance — plus access to rich health and wellness benefits your team will love. To learn more about Justworks, fill out the form below.
Sasha Butkovich is Content Manager at Justworks. Justworks offers growing businesses simple software and expert support for payroll, benefits, HR, and compliance. To learn more, visit Justworks.com.